The present debate between Representative Ryan and the Democrats over the budget deserves our attention. The Republicans continue to ignore the need for tax on the wealthiest Americans who have received trillions in tax cuts since Reagan, but more since Bush. The debt we face now is a direct result of this as well as the benefits reaped by these same people from the TARP program and other support for bank investors. The idea that these tax cuts have driven job formation in America is absurd and is supported only by distorted economic data. Most of this money has been off shored in investments in developing economies or speculative practices like Forex. Most of the job formation in the USA since Reagan has been fueled by debt, either direct borrowing by consumers on credit cards or by the inflation of housing and borrowing on equity.
More tax cuts will only make things worse and given stagnant wages for workers since the 1970s we can expect inflation to be a serious force driving down living standards for most Americans. Presently, US home sales are the lowest they have been since 1963 and there is no end in sight (see Financial Times, March 27, 2011). Ryan's plan is a disaster, it will produce no jobs, only impoverish more Americans and shift more of the cost of services to states and local governments and eventually onto sales taxes.
We have to ask, if the Bush tax cuts are job creators then where are the jobs. Since 2008 we should have seen these cuts to have offset the banking crisis, but they did not instead more of the highest earners off shored more of their income into developing economies. Without government job creation like CETA or WPA we will only see a worsening economic state.