What I don't get about former CBO head and McCain campaign economics adviser Douglas Holtz-Eakin is that of course he lies and says that President Obama's stimulus plan "failed" America, but then he:
- A) admits that the stimulus worked by CBO standards, that
- B) the "private sector stimulus plan" he's pushing for a repatriated profit tax holiday wouldn't go towards job creation with anywhere near the level of efficiency as the either the ARRA or the proposed new jobs bill,
- C) that the exact same strategy was tried in 2004 and according to his own criteria that he holds the ARRA to, it too "failed" America as only 23 percent of repatriated tax funds went to job creation, then
- D) says if we "double down on the same failed strategy" (as he calls the American Jobs Act), and repatriate again it will count as a $1.4 trillion stimulus and create almost 3 million new jobs.
What I don't get is that American corporations have record profits on hand right now in order to create jobs, and are simply choosing to create them overseas because that's where the growing demand for their products and services are. Repatriation would make sense if the issue was somehow that businesses were strapped for capital to invest in payrolls. They're not. They're making record profits quarter after quarter, most sectors. Not banks, currently.
And banks are suffering all kinds of losses right now and they are shedding jobs by the tens of thousands. Repatriation wouldn't fix any of that. They'd just keep the money. All repatriation would do is give corporations even more profits. Maybe they would invest them here. In 2004, when times were good, they only invested 23% in new jobs. Why would that rate increase?
OK, the Senate McCain-Hagan plan would offer a better tax rate if businesses added to payroll. But how much do they need to add to get the lower tax rate? At best that would change that 23% by a few points. And worst case scenario, those repatriated profits went straight to the bubble economy in Bush's second term.
No matter how you look at it, Holtz-Eakin's own numbers wreck his own theories. Hell, Eakin's own math cited is that repatriation is $482,000 per job created ($1.4 trillion, 2.9 million jobs.) Obama's stimulus was a "failure" at $278,000 per job created, remember? What happened to the efficiency of the free market over government waste?
Sure would be good for CEOs however.
