And why Congress will choose it.

Tax cuts the most costly way to boost economic growth

To clear the way to tackle more ingrained economic problems in the coming decade, we need to get this recession behind us. I’ve been hoping the new Congressional crew will do this for us?

Their leader, John Boehner, says he wants to “show Americans asking ‘where are the jobs?’ that Washington is finally on the job.”

How is he going create Jobs, Jobs, Jobs?  “Stop job-killing tax increases” by extending the current tax cuts. Even President Obama is now leaning toward extending the tax cuts.

But many economists see better ways. They think businesses will hire not when we give their owners money but when consumer spending goes up. And the best way to do this is to get money to those who are sure to spend it. Congress’s internal non-partisan think tank says

“Compared with the options for extending the expiring tax cuts, various other options for temporarily reducing taxes or increasing government spending would provide a bigger boost to the economy per dollar of cost to the federal government.”

They go on to estimate how many “years of full-time-equivalent employment” the country gains by taking different measures. For each “million dollars of total budgetary cost,” we create

8 – 19 employees from increasing Aid to the Unemployed
5 – 13 employees from Reducing Payroll Taxes
2 – 9   employees from allowing  full or partial Expensing of Business Investment
3 – 7   employees from sending Money to the States (non-infrastructure)
2 – 4   employees from investing in Infrastructure

Compare that to

1 – 3  employees from Reducing Income Taxes in 2011.

The political mantra may be “JOBS! JOBS! JOBS!”  The legislative aim seems to be “job, job, job.”

I’m not encouraged that we’ll get past the quest for jobs in time to set out on the quests for all the other stuff my family needs: cleaner energy, improved education, cheaper health, safer budgets, etc. Can you cheer me up?