Republicans Should Pass the 'Jobs Bill': Opinion

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- The parallels shouldn't be lost on anyone. And they certainly weren't lost on the market Friday, with major indices down 2.6%.

What happened?
  1. Greece fell yet one step further in the direction of default. Look at the one-year interest rate on Greek government debt, now at 100%. This means that the expectation of default within a one-year time-frame is essentially 100%.
  2. President Obama delivered the latest version of his class-warfare speech, in which he proposed some near-term gimmicks to run up the budget deficit even more.

This would be laughable and comical if it weren't so serious. With Greece collapsing under its own big-government weight, one would think that Obama would take a hint, and recognize that the salvation for the U.S. economy would be to run as fast as possible away from the Greek big-government spending model.

But no. When faced with the evidence of the failure of socialist spending policies, what does Obama do? He gives a big speech with stern marching orders to sail right into the storm of a Greek bankruptcy tragedy.

What is the essence of Obama's proposal?
  1. Cut the payroll tax.
  2. Increase government spending.
  3. Tax the job creators.

Republicans really should support this plan, passing it immediately. Why? Because it will accelerate Obama's quest to make the U.S. look like Greece. In turn, this will set the U.S. economy into a major tailspin that will ensure that Obama is kicked out of office in 2012.

Why will Obama's plan be so harmful to the economy? It's pretty easy to understand, actually.

Let's say you're walking down the street and a cop stops you and says "I'm going to give you this car for free. Start driving it down the street. At the next red light, I will stop you and give you a $1,000 fine and a six-month license suspension for speeding, no matter what."

Would you take that offer? Of course you wouldn't. Yet, this is the kind of incentive Obama proposes in his plan. He tells us to hire more people because he will cut the payroll tax for a year or two.

But if this causes us to make money, he will take it back -- and more -- with a tax on "the rich." He's basically telling America's job creators to dig their own graves, economically speaking.

Most of America's job creators pay their de facto corporate tax in the form of income tax, because they are sole proprietorships or sub-chapter-S corporations. That means that the President keeps threatening them with huge tax hikes because they are "rich" and makemore than $200,000 per year. Any remotely successful business that's above the lemonade-stand level is going to be above that level.

But then again, Obama doesn't have even the lemonade stand experience, does he?

If the President wanted to encourage job growth, he would cut the top marginal income tax rate, which is what job creators pay. The payroll tax matters only for people who are making so little money that there are no tax incentives against work anyway, because they don't pay the income tax to begin with, making less than $40,000 or so. Their behavior won't change much if their 6% payroll tax goes to 3% or even to zero.

If the President wanted to maximize economic growth, he would go so far as to simply abolish the federal income tax. It could be paid for by firing 2 million government bureaucrats, who do nothing useful all day and instead create obstacles in free people's lives.

The reason Obama will never propose this simple fix to the U.S. economy is because he is a lifelong believer in a socialist world view. Yes, it's as simple as that, and we need to be able to tell the truth as it is obvious to most people who have lived in a socialist country.

Obama's proposal to cut the payroll tax will of course create a funding hole for Medicare and Social Security, giving further credence to Texas Gov. Rick Perry's claim that these programs are Ponzi Schemes. We are deep in debt, so what should we do? Let's borrow some more, just like Greece!

The hope of the Obama administration is, of course, that the payroll tax cut will be "financed" by the "rich" employing more people. But why would they bother employing more people? So that they could have the pleasure of getting taxed more?

Job creation basically came to a halt when Obamacare was passed in April 2010, because businesses started suspecting that they were going to be on the hook for this new multitrillion dollar bureaucracy.

Just like in Ayn Rand's Atlas Shrugged, almost all the capitalists have gone on strike against a government that is gunning for their property.

And now this. Granted, $447 billion isn't as much money as it once was, thanks to the rapid growth in government spending in the last three years, combined with trillions of dollars of inflation, courtesy of the Federal Reserve.

Republicans will oppose the President's plan, once it arrives on their desks in another week or so. Given how terrible a plan it is, they have every right to resist this attempt to drive our country into a Greek-style bankruptcy.

But perhaps they shouldn't. The orgy of government spending and regulation over the last three years is already so big that this incremental $447 billion waste isn't going to make much of a difference. It will just be one more push toward the bankruptcy cliff. It will not create any societal wealth. As a result, with the election only 14 months ahead, the major loser from passing this "jobs bill" will be Obama himself.

Pass it as proposed and Obama will own it, and his last excuse will be out the window. Let Obama fall into his own trap.

In fact, the jobs bill feels just like one of those "get tough" moments we used to hear from Mikhail Gorbachev in the late 1980s. Amid talk about Glasnost and Perestroika, he made a few last attempts to purify the socialist "perfection" of the U.S.S.R. Little did Gorbachev know that the last hurrah was just around the corner.

In those days, my Russian friends would say, "In America, they have Ronald Reagan, Johnny Cash and Bob Hope. Here, we have Gorbachev, no cash and no hope." These days, Obama has his Greek-style "jobs bill" that will destroy jobs and blow up the deficit. He should have called Gorbachev first.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Anton Wahlman was a sell-side equity research analyst covering the communications technology industries from 1996 to 2008: UBS 1996-2002, Needham & Company 2002-2006, and ThinkEquity 2006-2008.

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