Have you ever had a bronchial infection? Man, can that be rough: a hacking, coughing up of greenish phlegm that only gets worse and worse. Finally you visit a doctor who prescribes Amoxicillin with the stern admonition to continue to take the entire week's worth of the antibiotic, even after you begin to feel better. "Don't want to leave a remnant of the bacteria to survive, now strengthened and immune to the medication."
"But Doc," you argue, "I don't have much money and that stuff costs a lot, and I'd have to put it on my credit card. Can't you just gimme a couple days worth?"
"Being hospitalized with pneumonia is a whole lot more expensive, and the outcome is far less certain" the physician replies.
A severe recession can be like that: requiring a heavy dose of government intervention. The "Great Recession" we experienced in the last years of the Bush administration required, but did not get from either the Bush or the Obama administrations, an adequately heavy dose of government intervention in the form of federal economic stimulus. What we got was too weak to do much good, and for too brief a period, which is why the country continues to linger near the edge of the abyss.
Start with a few fundamentals at least most can likely agree on.
One fundamental is that it's economically better to have folks who are gainfully employed and paying taxes than it is to have folks who are unemployed, and drawing benefits from various government coffers.
One is building the pot, the other is taking from the pot. One is buying goods and services from the business community, the other is hunkering down, buying little. As the consumer pool shrinks, the businesses that would ordinarily employ workers to serve customers are now forced to lay workers off, thus further exacerbating the downward spiral. As more and more are drawing more and more from the government, and as fewer and fewer are contributing, the fewer resources a government has with which to provide those services.
And never forget that even when no large contracts are involved, the governments at all levels are also customers for the various business communities. Their employees buy coffee on the way to their jobs, they purchase gasoline for their cars, in order to get to their jobs, they purchase lunches, and on and on and on.
The reverse also occurs when the economy is growing, rather than shrinking. And this is where the GOP has gotten it all wrong, and why the Obama administration errs grievously when it buys into the Republican orthodoxy of hunkering down; worrying more about an increase in the budget deficit and national debt than unemployment.
Save for taxation that strangles, businesses hire in order to meet current or anticipated demand. Perhaps an example will help.
Say you have a house that is badly in need of general repair and updating; a new roof, some foundation work, replacement of the water heater and furnace, and a new kitchen. You've reached agreement on price and terms with a reliable general contractor to have the work done. The general cannot do all the work himself. He's going to have to rely to a great extent on others; suppliers, sub-contractors, and their employees. If, because of the economic downturn they are presently without the requisite workers, they'll have to go out and hire them. Regardless of whatever the tax structure is, save for that strangling scenario, your demand for their services will compose the underlying demand for a workforce. Reducing their tax rate to zero will not encourage them to hire even one more person than is needed.
Essentially it's as simple and basic as that. Nor does it matter much whether the business is a mom-and-pop venture or something much (even WAY much) larger. If the demand is either present or anticipated for a product or service, the supplying business will make the investments in labor and equipment that are necessary.
With the surfeit of documenting data available, further amplification of the above, concerning the terrible and unaffordable waste wrought by them, wasn't needed by HuffPost's ""Patriotic Millionaires' Describe What They've Done With Their Bush Tax Cuts" article.
As to the profligate waste, " The tax cuts enacted in 2001 and 2003 overwhelmingly benefited the richest 1 percent of taxpayers, according to the nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute. The progressive Center on Budget and Policy Priorities estimated in 2009 that the tax cuts "added about $1.7 trillion to deficits between 2001 and 2008.'" That's between 2001 and 2008! According to Citizens for Tax Justice president Bob McIntyre, "If they are fully extended, they will cost five-and-a-half trillion dollars over the coming decade ." (Emphasis mine)
But the article asked what the beneficiaries of the tax cuts were doing with their tax bonuses? Paul Egerman, founder of eScription, a medical transcription company, claims he's likely saved several million dollars because of the tax cuts, but that he's "not done anything with that money." He's "kept it."
Dennis Meheil, chairman of U.S. corrugated, Inc., a cardboard box company, said he "got a bigger boat." Unfortunately, the building of the 150-foot sloop didn't add a single American job, as it was built in Italy.
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