Fat Cat Capital

Moody's Analytics Chief Economist, and former J. McCain advisor, Mark Zandi predicts the President's ($440 billion) Jobs Bill, if passed, would produce 1.9 million jobs, add 2% to GDP and reduce the unemployment rate by 1%... Hmm? 1.9 million - now that's precise!

I suspect Mr. Zandi, having achieved political-advisor status, is a bright fella - I'll therefore assume he's accounted for some number of job losses, or perhaps jobs not created, on behalf of the $467 billion (Jobs Plan payback) of proposed tax increases on $200k+ earners (we'll call them Fat Cats) over the next ten years... That would be folks the Fat Cats let go, and/or won't hire, or folks the suppliers of certain goods/services to the Fat Cats let go, and/or won't hire, or folks the borrowers of capital from the Fat Cats' banks will let go and/or won't hire (and on down the line) - as a result of extracting a $half trillion of Fat Cat Capital...

So will the Plan, for example, create 4.1 million jobs and the tax increase cost 2.2 million? Hmm? I'd love to see the breakdown... Golly, to be that precise, he must have it broken down by industry as well... Pray they're not all infrastructure jobs! Someday the roads will be paved, then what?

"Oh no!" you say... "The workers will spend the money and create jobs"... "Well then" I say... "What happens when the roads are paved and the paychecks stop"... "Can't go there" you say... "By then the economy will be off and running and the workers will find new jobs"... "Hmm?" I say...

So then, we tax the Fat Cats (their employees and/or would-be employees, their vendors, their vendors employeees and/or would-be employees, their banks' borrowers, their banks' borrowers employees and/or would-be employees, and so on)...We take that money and pay the construction workers, then tax it again... They go spend it back into the hands of the 200k+ers, then we tax it again... Hmm?

In other words; government takes capital out of the economy, keeps a chunk, what's left goes back into the economy to do what it otherwise would have (would have, that is, at the evermore effecient direction of the private sector)... And that's going to stimulate growth? "Hmm?" I say...

Well shoot then, if that's gunna work, why the heck are we going so small? Let's do a $880 billion Jobs Plan, take $934 billion of Fat Cat Capital and create 4 (oops, I mean 3.8) million jobs, a 4.0% GDP increase and cut unemployment by 2%? Or better yet, lets go $1.32 trillion, take $1.40 trillion from the Fat Cats and create 5.7 million jobs, a 6% GDP increase and cut unemployment by 3%? Or better yet, let's do $++++++++++++++++++++...

Read the following quote and PLEASE allow Mr. Friedman to disabuse you of a most pernicious myth: