Taxes on “small business” have absolutely nothing to do with high unemployment. If anything, it’s cheaper today to hire new employees than it was ten years ago. Interest rates are ridiculously low, and there are a whole bunch of underemployed or unemployed smart college graduates willing to work for a lot less money than they would have been willing to work ten years ago.
The reasons for high unemployment have been talked about on my blog repeatedly:
(1) Automation, robotics and other technological advancement are replacing human workers, or in other words making workers more “productive” which means you need fewer workers for the same amount of output.
(2) Instantaneous communication and improved transportation make it feasible to replace expensive American workers with super-cheap workers in China and other places. During the Great Depression, increased demand meant that American workers had to be hired. But today, increased demand for iPhones means that Apple just hires more people in China who work under slave-labor-like conditions.
(3) Our immigration policy just keeps letting more people into the country at a time when there aren’t enough jobs to go around for Americans.
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It’s also worth repeating what Douglas Rushkoff said (see my post about paying people to play WoW ):
America disposes of thousands of tons of crop and dairy just to keep market prices high. Meanwhile, American banks overloaded with foreclosed properties are demolishing vacant dwellings to get the empty houses off their books.
Our problem is not that we don't have enough stuff -- it's that we don't have enough ways for people to work and prove that they deserve this stuff.