I note on National Review today that President Obama’s “jobs” package is full of bad ideas, including:
- A temporary payroll tax cut. This is not a tax cut at all because the president would “pay for it” with tax hikes later on. And if it’s temporary, it won’t encourage businesses to hire additional workers anyway.
- More federal infrastructure. When the federal government spends on infrastructure, it often misallocates the funds. The list of federal infrastructure boondoggles and cost overruns is endless — in public housing, dam‐building, Corps of Engineers projects, bridges to nowhere, high‐speed rail, etc. Instead, what we need is higher‐quality infrastructure spending financed and built by the private sector. We need private airports, private air‐traffic control, and private toll highways.
- A federal infrastructure bank. Such a financial scheme would reduce transparency in federal spending, which would go directly against a key Obama promise of increased budget transparency.
- Federal jobs training programs. Since the 1960s, federal jobs‐training programs simply haven’t worked.
- New business tax credits. New tax credits for hiring will distort business decisionmaking and, by making the tax code more complicated, such credits would encourage more tax cheating. They would be the exact sort of tax loophole that Obama claims to hate.
- Crony capitalism. When Obama talks about “government and business working side‐by‐side,” it sounds to me like an invitation to corruption.
- Extending unemployment insurance. Such subsidies would help keep the unemployment rate high.
Rather than all this big‐government micromanagement, federal policymakers should pursue a large and clean corporate tax rate cut. Obama did talk vaguely about corporate‐tax reform tonight, but I’ll believe that when I see it.