Why Don't They Ever Tell The Truth? One Piece of the Rick Perry Cut, Balance, and Growth Plan. [98]

Mr. Cut, Balance, and Grow

Governer Rick Perry
Governer Rick Perry | Source

What Rick Perry Didn't Tell You

I AM PICKING ON GOVERNOR RICK PERRY (who appears interested in running for the 2016 Republican Presidential nomination after failing in the 2012 cycle) for this hub because it so clearly represents my point; it applies, however, to most politicians, both Left and Right, and it frustrates the Hell out of me.

In presenting his Cut, Balance, and Growth tax plan in 2012 and will presumably be dusted off for the 2016 run, Governor Perry made this statement when talking about one part of his plan, repatriating corporate profits residing overseas:

"The U.S. Chamber estimates this one-time tax reduction would bring more than $1 trillion in capital back to the U.S, create up to 2.9 million jobs, and increase economic output by $360 billion.

In other words, it’s the kind of economic stimulus President Obama could have achieved if he wasn't hell-bent on passing big government schemes that have failed American workers."

To begin with, let me say I like this part of his plan; but, for the rest of his plan, not so much. Nevertheless, it is his misuse of information that bugs me starting with the Chamber of Commerce estimate and then what Rick Perry didn't tell you.

I don't know the actual size of the profits that may be repatriated (repatriation is still relevant in 2015, by the way), but let's assume, for the sake of argument, the estimate given is correct; even though there is pretty good reason to suspect its validity*. Having said that, their claim that this profit (capital) would translate into 2.9 million jobs and the increase in economic activity seem like realistic numbers to me. What Perry forgot to bring up, however, is that these claims by the Chamber are all well and good if, and only if, the big corporations are in a mood to spend the money on jobs and not on themselves, or hold it in reserve in American banks; and in 2012 - 2014 they were not in the mood. But, in 2015, that mindset seems to be changing as economic growth seems to have stopped stuttering but is not purring.

President Obama cited the Conservative newspaper Wall Street Journal when he claimed in February 2011, that corporations were sitting on $2 trillion* (the most in percentage terms since 1959) and not hiring. This didn't change in any significant way until 2014.) The Question:

Why would one assume that just because big corporations repatriated another $1 trillion they would be any more willing to go out and start hiring any more than they are with the $2 trillion they are sitting on now?

The answer was, "Businesses aren't hiring because government not because they don't have the money but because they don't know who is going to be in power after every two-year election cycle and what, if any, policies that might get by Congress and the President. Given who is getting today, whether government will be able to govern effectively. If you don't have the Conservatives or the Democrats controlling ALL three branches of government, House, Senate, and Executive, and in the case of the Senate, a super majority, then government will be no different than it is today; ineffective, directly as a result of the "no compromise" strategy of the Conservative and the Tea Party movement. (You can't say the Democrats won't compromise because they haven't been given the chance not to.)

The answer to my question, therefore, is the big corporations didn't necessarily have any incentive to hire if this new found wealth materialized inside the American border; as a result, no tax incentive to bring back the money will be incentive enough to make them want to do it. This is what Governor Perry didn't tell you ... that his 2.9 million jobs and his $380 billion in new economic growth is a pipe-dream and wishful thinking. Even if Perry had won, the Congress that resulted after the 2012 and 2014 elections guarantee there will be no repatriation of those monies. Apparently the American public likes the way things are, even though the polls say otherwise.

As to Perry's false characterization of Obama's stimulus program failing American workers, I guess he is saying keeping or employing 4 (now 10) million American workers, stopping the hemorrhaging of 700,000 jobs a month left over from the Bush administration is , and limiting unemployment to only 10% is tantamount to failing. He doesn't tell you, of course, that his "do nothing" solution would have led to the loss of maybe another 8 million jobs, over and above the 14 million Bush lost in the first place, peak job losses may have hit 1 million jobs a month, unemployment may have gone up to the historic norms of 20 - 25% for these kinds of depressions, and the depression would have lasted the historic average of 3 years before recovery even began to get started (as opposed to Obama's 1.5 years); that is the Conservative solution.

Take your pick.



* President Obama's $2 trillion number is exaggerated as well. Politico.com investigated and after working its way back to the original source of the Wall Street Journal article and talking to some economists, they determined that while the $2 trillion is probably overstated, the direction of his statement is clearly correct.

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Comments 4 comments

Credence2 profile image

Credence2 5 years ago from Florida (Space Coast)

Esoteric, the article is right on. As I have said in previoud hubs, the rub is what makes conservatives think that if we just open the fiscal flood gates to corporations that they are going to create anything outside of lining their own pockets? The only answer is that of increasing demand, that comes from job programs for much of the infrastruture work nationwide. With increased demand and the associated increase in economic activity, there is incentive for those sitting on this money to invest. Otherwise, they will do what they have always done, just wait and see. The President's program is on the right course, the GOP is obstructionist and deflects the true nature of the issue with smoke and mirrors. Cred2


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Thanks Credence, what is so frustrating is that the Conservatives are right in the fundementals. Normally, when we come out of a recession, even a financial one such as this, although the recovery is much slower, when business and industry feel confortable that demand is "pent-up", they will invest in producing supply before demand materializes. It is this investment that creates the jobs that creates the demand, just as the Conservatives (and Democrats) say.

The problem is, in this instance, business and industry is not confortable because they see government in turmoil with the Conservatives nixing any Democratic attempt at governing; so they don't invest. That leaves only one entity large enough to invest in such away to create enough demand to increase supply and therefor employment; that, of course, is the government.

Conservatives don't want to do this either. Consequently, one can only surmise they want another five or more years of economic stagnation since they know it will take that long for their plan to work; just like it has in the past; darn that history, lol.


onuigbos profile image

onuigbos 5 years ago from Southfield, MI

The President and CEO of US Chamber of Commerce, Thomas J Donohue is one tape touting the efficacy of outsourcing of American jobs. That is the direction the corporations are going, and not repatriating profit stashed overseas. Perry knows that the conservatives are not for anything that will uplift the middleclass. The governor and other politicians get away with such lies because most Americans are too busy working three jobs with little time to read.


My Esoteric profile image

My Esoteric 5 years ago from Keystone Heights, FL Author

Thanks for reading and commenting on my hub, onuigbos. I am working on a hub, in partial response to the "Occupy Wallstreet" movement that addresses exactly your point about the lack of participation of 95% of society in the bounty of America since 1947, the data I found is absolutly amazing!

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