By John Ballard
We have heard about jobs, jobs, jobs until my ears are hurting. Everyone in politics and the media wants to talk about jobs and job creation and few, if any (and I include myself among them) have a clue how to turn the economy around. One proposal getting traction in this, the revival of Randian worship, is called by the joyful term "repatriation holiday." Rather than rant, I'm linking a report, including commentary, than came out yesterday.
Congressional Budget Office Director Douglas W. Elmendorf told the Senate Budget Committee yesterday that, of 13 policy options for creating jobs, increased unemployment benefits ranks first in terms of jobs created per dollars of federal cost. That�s not surprising, given that jobless people are severely cash constrained and would quickly spend most of any incremental increase in cash and that, in turn, would lead to higher demand and job creation.
By sharp contrast, CBO ranks a repatriation holiday last for job creation of the 13 options analyzed. CBO notes that U.S.-based multinational corporations are flush with cash and, even though a holiday would make shareholders richer (leading to some additional spending), �CBO expects that the effect on output would probably be positive but much smaller than the net cost to the government.�
I am indebted for this to David M. F. Schankula whose blog, Barefoot and Progressive, I have been following for a while. (Having been born in Kentucky I love this tagline from Mark Twain: I want to be in Kentucky when the end of the world comes, because it's always 20 years behind.)
There are a couple �repatriation� plans out there, one coming from Tea Partier Mike Lee and that one is co-sponsored by Kentucky�s gift to America, Mr. Rand Paul.... When those two team up, it�s pretty obvious what�s going to happen and even the conservative Heritage Institute could tell you about it:
This sequel to a similar 2004 holiday would, like its predecessor, have a minuscule effect on domestic investment and thus have a minuscule effect on the U.S. economy and job creation.
It�s important to point out that Rand Paul and Mike Lee aren�t the only ones trying to give billion dollar corporations a trillion dollar gift at a time when they least need it. The other proposal introduced by Sen. John McCain has gained the vocal support of the Blue Dog Democrat House coalition and while Ben Chandler hasn�t made his position clear, his buddies are all lined up.
(That last link is to the Blue Dog Coalition in case any readers are wont to tramp around in that swamp.)