Smoke and mirrors. An art form practiced by many larger businesses to bolster public perception of their market share or financial liability, this “art” is absolutely perfected by Washington D.C. politicians.
Which would be perfectly fine, if it weren’t for the fact that D.C.’s source of revenue is you, the taxpayer.
During the 2008 Democrat presidential primary campaign, when pressed for a comment about health care reform, then Sen. Hillary Clinton famously opined that she felt that 3 different entities were needed to bring health care under control: employer, employee, and the government. This sounds reasonable, until one begins to question exactly who pays for the government’s portion. Unlike employer or employee, the government simply extracts money and redistributes it. And someone has to pay for their expenditures. Again, that someone is you, the taxpayer. Painting the government as an equal partner, instead of the taxing, non-producing entity that it is.
Smoke and mirrors.
To be fair, the smoke-and-mirrors game is played by almost ALL politicians, Republicans and Democrats alike. We just hear more about the Democrats right now because one of their ranks happens to be our president.
So now that we have President Obama proposing “The American Jobs Act” that purports to create jobs and do so many other positive things, it begs the question of how it will affect each taxpayer. Here are 3 smoke-and-mirror reasons each taxpayer should watch his back:
- The plan will cost $200,000 per job. This obvious mathematical fact was made famous in the last few days by Martin Feldstein, economist at Harvard University. The math is fairly simple: $447 billion in expenses, up to 2 million jobs created. And how many unemployed would love a job that paid $200,000 per year? Why not, then, just pay 2 million people $200,000 in 2012? Perhaps the math is not the only key here. The “smoke and mirrors” is hidden in the “up to”. As usual, a politician leaves himself just enough sunshine in his argument to make the claim it wasn’t completely dark …
- The plan will reinforce infrastructure. In a rather impassioned plea in defense of President Obama’s jobs plan, Christine Romer, President Obama’s chair of the White House Council of Economic Advisors, wrote a “guest commentary” published in the Kansas City Star. Among her defenses was specifically that these taxes would go to “roads, bridges, school repair and teachers. Jobs are, in a sense, a side benefit. What we’re really getting is better infrastructure and more education for our children.” This is perhaps plausible, almost even believable … if we could trust it. The two stimulus plans in 2009 cost taxpayers about $1 trillion, with the express purpose to “create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.” Results? By almost universal declaration, these stimuli were a dismal failure, creating no jobs, and making no significant improvements in our infrastructure. And we’re supposed to believe that now, they’re serious? President Obama’s jobs plan presents absolutely no reason to accept the notion that the government would do anything different than it did when it had the same exact goal in 2009, and fell completely short of reaching it. So you, the taxpayer, run the risk of once again paying additional taxes, and getting nothing for it. No jobs, no new roads, no repaired bridges.
- The plan requires the government to “print more money”. Actually, it requires Congress to raise the debt ceiling again, authorizing the government to continue borrowing at least 40% of its expenditures. And keep in mind that when the government “borrows” money, it sells shares of its worth (called bonds) to anyone willing to pay now for a “guaranteed” return 10, 20, even 30 years down the road … with interest. This means that $447 billion now may turn out to be in excess of $1 trillion years down the road. But our politicians won’t say that. The gamble is that something magical will happen that will stimulate the economy … and if that doesn’t happen, simply to leave it for our children and grandchildren to pay for. Remember, as it stands right now, the price each person living in the United States needs to pay is $50,000 to retire the public debt. $50,000, and rising. Assessed to every single person. $50,000, and rising.
We all want, and desperately need, job creation. But like many people desperate to hear what they want to hear, we sometimes find it difficult to look past the vague, sound-byte-worthy promises and projections.
Word to the wise American taxpayer: Look for the smoke and mirrors. And if this gets implemented, watch your back.