My response to Binve's recent blog
For some odd reason I simply could not add a reply to Binve's recent blog:
Everytime I hit post, it wouldn't. Maybe there is a conspiracy or maybe not so, but because I really liked my response I am setting it forth here.
From a practical point of view I suppose Roche is correct, without a consumer the producer pretty much goes belly up. But the debate really has been about who is that entreperenuer.
The Kudlowites always claim it is the rich so they need the tax breaks. On the other hand the bulk of the jobs created are created through the visions of individuals, who oftentimes are not rich. His Alexander Bell is a clear example. Same with Gates. Same with Jobs.
Oftentimes someone with an idea takes out a loan on his/her house for startup money in the hopes of building a profitable company off that idea. Actually Bernanke, before Congress, even mentioned how the housing crisis might have negatively impacted this as a possible reason for slow job creation.
In the end, that entrepreneur will need nore and more capital, through venture capitalists, banks, BDCs, stock market, etc. But that will happen regardless of the taxes the rich pay.
So the real debate is do we shower the rich with lower taxes in the hopes they will create jobs or do we start giving better tax breaks on small cap companies or start up companies in the hopes they will.
I am a believer in the latter. But that is just my opinion.