These last few post have been looking at Marco Rubio's contention that the only out of our (U.S.) current fiscal problems is through growth. When he says "only" he means only. Nothing but growth, so any movement by government to generate revenue to reduce the deficit and pay down our debt is off the table if it has any chance of impacting growth.
According to Rubio, we need to leave the money in the economy (keep taxes where they are) so that it will be invested back in the economy creating growth and thereby creating new and better tax payers which will provide the government the revenue it needs.
I contend that this theory, though sound and plausible, will not work because the money that is not taxed and would be received as revenue is not put back into the economy where it creates these new and better tax payers.
Case in point is how Mitt Romney invests his money.
When I asked the question: How many jobs did Mitt Romney's $5.46 million that he got to keep because he paid 15% and not 39% taxes create, it was not to poke fun at him or paint him in a bad light. It is simply to point out a fact, that is, investment is predominately designed to increase the wealth of the individual, not to create jobs. That's the model used. that's the model Bain Capital uses. That's the reality in play and the reason Rubio's "growth only" model will not work.
It can't work because guys like Romney invest their money in ways that benefit them. Heck, for the most part, we all do it.
So if a fiscal policy advocated by Rubio of "growth only" and no taxes - which is pretty much held in lock-step regard by the Republican party - is dependent on investment by "job creators" like Romney, and guys like Romney are not investing in things that create new and better tax payers, how valid is Rubio's idea?
It's not valid. Not because it's not a sound theory or plausible, but because in reality it is not happening. Rubio's theory is completely dependent on guys like Mitt Romney investing in things that will create more and better tax payers. Romney, on the other hand, invests in things that bring in the highest return for him and his family.
Rubio's "growth only" could work but only if we force that revenue they keep be invested in projects that create American jobs. The reality is this:
The unemployment rate was unchanged at 8.2 percent, the Labor Department said in its report Friday. (1)Reality shows that since the lower taxes put in places by Bush, as well as an environment under a Republican President and Republican Congress, investment by guys like Romney has not generated the necessary jobs needed by the Rubio model to generate the revenue we need to run our government.
If it seems like I am beating a dead horse with this, I am. If a model does not produce the results you need then the model is wrong regardless of the theory or soundness behind it. Reality shows over and over again that the "job creators" are not creating the jobs we need. They are "job creators" only in the sense that the theory of "growth only" makes them so.
In reality, guys like Romney are nothing more than investors. If one thinks they create jobs with their wealth then you are fooling yourself. Their wealth creates jobs only when it benefits them. In a way, it would be like calling yourself a "philanthropist" because once and a while you drop change in the Salvation Army bucket at Christmas.
So why beat this dead horse? Because it is the predominant Republican model for how to achieve the revenue to decrease the deficit and pay down our debt. It is a model that relies on guys like Romney. And we know how guys like Romney behave. They do what is in their best interest, and right now, a 15% tax rate is what benefits them.
Which brings us to this question: Is it Romney and his rich cohorts responsibility to create American jobs with the money they keep because we let them pay lower taxes because we want them to invest?
If it is not Romney's responsibility to take that $5.46 million extra money he got to keep because he is a "job creator" and is taxed at a lower rate than everyone else, to create new and better tax payers, who's job is it?
If the private sector won't do it. And the guy that wants to be our president isn't doing it, then who will produce the revenue we need to run our government and pay down our debt? Where will it come from if it is not going to come from new and better tax payers that Rubio stresses will materialize from a "growth only" model?
Growth only will not work because guys like Romney do not spend their money on projects that create new and better tax payers. It does not work that way even though, in theory, it should. Romney does not spend his money that way and neither does the rest of the "job creators."
If they won't then Rubio's model will not work and a different approach is needed to bridge the gap between what we need in revenue and what we currently bring in. Rubio needs to change his tune because he is the rising star within the Republican Party. As long as he sings the "growth only" song, the others will sing from that same songbook.
If you want "growth only" then guys like Romney need to be punished when their investments do not generate new and better tax payers. Or, we admit that it is not guys like Romney's responsibility to create jobs for Americans and stop calling them "job creators" and tax them at a rate necessary to bring in the revenue we need to run our government and pay down our debt.
"Now, who is going to bake this bread?" asked the little red hen.
"Not I", said the cat.
"Not I", said the duck.
If not Romney, who?
Next Post: How smart is a guy who does not see this reality?