To the editor of THE EAGLE:
High progressive taxes followed closely by the high cost of government regulations are the major causes of America’s economic problems. In the last 100 years, enormous economic prosperity followed steep reductions, rather than increases, in tax rates. Those periods are Harding-Coolidge, Kennedy with a GOP congressional majority in both houses, Ronald Reagan, and George W. Bush’s temporary reform in 2003. But what about Obama’s tax plans? Have they helped or hindered economic growth and job creation? A simple example follows.
A financial and business investor recently commented in a major financial publication that, several years ago, he built, as part of his investments, a restaurant in Ohio with a $1.2 million investment which created 65 permanent jobs in the restaurant at a cost of $18,000 per job. The restaurant now thrives with 65 jobs created.
Contrast this business success story from private investment with a Congressional Budget Office estimate on the cost of job creation with the crafty 2009 Obama administration’s stimulus a la John Maynard Keynes. The CBO accurately records that each stimulus job cost between $500,000 and $4 million. Comparing the job creation cost of the 2009 Obama administration’s stimulus with our financier’s $1.2 million restaurant investment leaves the financier with only enough money to create maybe one, possibly two jobs, rather than 65. Which investment was the more successful in terms of creating jobs?
This financial investor is also a CEO of a major semiconductor manufacturer and he further reports that, between 1983 and 2003, his total investment in his principal business totaled $797 million which led to the creation of 4,033 permanent jobs at an investment cost of 198K per job created.
By way of summary, the cost creation for each job for this businessman and investor, based on his own experience, ranged from $18,000 to $198,000 compared to $500,000 to $4 million per job created by the Obama 2009 stimulus program. Is this a successful investment? If President Obama was your financial advisor or investment wizard starting in January, 2009, would he still be your wizard today? EDWARD J. SPENCE, III