One of the constants throughout conversations on how to improve the economy is the spending vs. tax cuts debate.  I think this guy makes some really interesting and valid points about the whole tax cut idea.  I just don’t see people taking whatever little chunk of tax break money they get back and spending it right now.  Chances are really good that they’re going to save it.  

The current banking system is a perfect example.  We done some stuff to help out banks in trouble giving them a ton of money to get the credit market started again, but they’re still not loaning out money.  I’m definitely not a big fan of our government spending a bunch of money when we have a ridiculous amount of debt and deficit like we have, but people have to buy things to bolster companies, which will in turn cause those companies to hire people, which will improve the buying power of the general public and things spiral up.

That’s a problem I’ve always had with trickle down economics.  There’s a basic assumption that if you give a company a tax break they’re going to hire more workers.  From what I’ve seen the last year plus, I think they’re more inclined to either sock the money away or give their executives a fat bonus.  I think companies are only going to increase investment in their companies when people start buying their products again.  Example: American auto companies are going to keep cutting workers until people start buying their cars again.  No amount of tax break is going to change that trend.