The first-time home buyer tax credit of up to $8,000 also created false demand. Once the tax break expired, sales tanked.
Government programs of this sort create un-natural market cycles.
Now, Obama wants to implement more temporary tax breaks for "small" business. Why is it that liberals keep trying shit that doesn't work? According to the AP:
President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of showing action on the economy ahead of the November elections.These are temporary. This and new infrastructure spending is only temporary. And it's spending more money that we don't have. It's like we're back in the 1930s. Will this recession last 9 years?
If he would actually listen to business leaders, he could find out what they really need to start expanding again.
Tax reform -- for both business and individuals -- needs to be immediate and permanent. Of the OECD countries, only Japan taxes their business more than the U.S. Our companies are keeping a lot of their cash overseas, because to bring it home would cost too much in taxes. See this story about that in the San Fran Gate: U.S. tech firms shop abroad to avoid taxes.
Let's hope after November we can get some real reform, not just more of the same crap.