Perhaps this weekend the President awakened from his slumber and realized the economy is truly in serious trouble, and that he needs to actually focus on it. No more $850 billion “stimulus” that only stimulates Democrat party special interests and doles out political favors. No more “6 years of healthcare benefits paid for with 10 years of taxes”, and perhaps (perhaps, yet to be seen) even a will to remove some of the uncertainty the business community faces around taxes, healthcare costs, and regulation– which has paralyzed hiring as well as our overall economy.
What did he do? He announced 2 primary initiatives over the weekend, and he went 1 for 2. The first was a huge whiff, a $50 billion “infrastructure” spending plan. Isn’t this what the first $850 billion plan was for, infrastructure projects? The most positive spin I could put on this one is perhaps the President wants this money to actually be allocated to productive projects rather than the cookie-jar $850 billion spent on union favors, projects in Democratic districts, and bridges to nowhere. The fact remains that we were told the $850 billion was primarily for infrastructure, so what’s this next traunch of $50 billion for?
But let’s look at the positive. The President hit a solid single, which if he delivers on it could turn into a double or triple, with his proposed plan to allow businesses to write off 100% of new plants and equipment purchased in 2011. Why do I like this? Well, for those of you on the left you may say “because you are a greedy capitalist”. But this is not true. I like this because it is good– no, great– for our economy. This is an incentive that will clearly encourage businesses to spend, and if it passes spend they will. And when businesses spend, they are buyers. And when there is spending and buying, there is hiring. There is no question that this will “stimulate” the economy like nothing Obama has done since taking office.
The only question I have is, why did this take so long? Because it is antithetical to the Democrat anti-business, anti-profit mindset? (Ah, wouldn’t our economy be great if we didn’t have greedy and exploitative corporations trying to make money? We could all just care for each other, settle for breaking even, shorten our work-weeks and live life like the French?). For 18 months I have been calling for this. An investment tax credit, a simple incentive that clearly drives businesses to spend and invest, and as a result to hire.
I’m totally confident this tax incentive will work. How do I know? I lived it. As a salesman in the 1980’s the tax code had what was called an “investment tax credit”, or ITC. We put the ITC in all of our proposals because it was a true incentive for businesses to buy our products, and buy they did. Without it I am certain several of my sales (all big ticket items) would not have closed. And the products I sold were made by someone, and this clearly stimulated jobs.
No if Obama will deliver it would be great, although such policies make Nancy Pelosi and Harry Reid want to choke. No easy task ahead for our President, but if he delivers he will be batting .500 for the weekend. This would be his best weekend yet.