As I have been saying for a couple of years now, most of the attempts at job creation by our federal government have been completely misguided. Now the talk is about job creation through tax reductions. While reducing taxes and labor burdens can be an encouragement for a company to hire, there is no real incentive to do so unless overall sales increase. Why would any employer hire a new employee if their current staff is handling the current level of business. Without a need to hire companies will simply put these new savings in their bank accounts. This point is driven home today in an article by the Washington Times:
So as you listen to the “Job Creation Plans” that are about to be rolled out by President Obama, Mitt Romney, and various other candidates. See if they answer the most important question, “How are sales going to increase in order to spur job creation?” Any plan that fails to address this fundamental issue will fail to create jobs in any significant numbers.