John Kerry on the Issues: The Economy

From John Kerry’s site:

John Kerry will save jobs by ending the unpatriotic practice of U.S. corporations moving offshore simply to avoid paying their fair share of our nationís tax burden. To create new manufacturing jobs Kerry will provide new tax breaks to manufacturers who produce goods and create jobs in the United States.

Companies outsource because it improves their bottomline. The cash that is freed up is usually invested into other growth oppurtunities. If they are forced to employ in a way that is not competitive, they go out of business. Companies that are out of business don’t employ anybody, and don’t produce anything.

Will said tax cuts be big enough to compensate a company's losses if it hires locally? Where will the money for these tax breaks come from? The taxpayers. Essentially, the taxpayers will pay to keep a few non-competitive people employed, at non-competitive wages, while probably also paying higher prices (which companies will charge to defray their costs).

But Kerry misses the fundamental point. Companies don't exist to employ people. They exist to make a profit. People cannot expect a job to be created for them. They have to be competitive enough to deserve them.

Posted by Vivek at February 18, 2004 11:41 PM