At Mises.org, Thedo inquires about how one of Obama’s tax proposals will create jobs:
This is my primary question about Barack Obama’s proposed tax policy, which involves tax credits for businesses that create jobs. How do they do that? Do they just hire more people and receive a check?
Strictly speaking, a business doesn’t really “create” jobs, at least, not any moreso than the government. A business, the firm/company/organization/co-operative/corporation, is simply a place where the production of goods and/or services happens. Businesses allocate and combine scarce economic goods, transforming them in to products that consumers want to purchase.
With that in mind, I think Thedo is making some syntactical errors. I would be very surprised to learn that Obama’s policy is going to give money to businesses after those businesses demonstrate they’ve “created” more jobs. What is more likely, is the generally accepted idea that tax cuts will stimulate businesses, that is, by reducing a businesses tax burden, policy may cause businesses to add more jobs.
I agree whole heartedly. Tax cuts do not create jobs alone; however, if a company is on the edge of needing/wanting additional positions or are thinking about making an investment in growth and can not make a decision of the cost effectiveness, it may be enough to teeter the scale to hire that additional person.
Off that comment, its hard to really say whether these jobs have been created since the thought was already there pre-tax cut. Which came first, the chicken or the egg?
[...] For the record, I’m not voting. That doesn’t change the fact that Obama is either willing to sell you out to the highest bidder, or otherwise completely ignorant of economics. [...]