You may remember that the President said yesterday that getting the deficit “off the table” (as if that is ever a possibility) will allow the Administration to renew their focus on job creation, which voters agree is the most important issue facing the country. The President is more circumspect when addressing what “focusing on job creation” would actually mean, though I suspect it has something to do with an infrastructure bank. Infrastructure is definitely a good thing to keep hammering; it has support from both business and labor, a high bang-for-the-buck in terms of economic multipliers, and would potentially put people back to work immediately. The infrastructure bank idea would leverage private money into this as well, and ensure a steady flow of funding for necessary projects.

So it’s not surprising to see Obama’s new “jobs czar,” GE CEO Jeffrey Immelt, look to the infrastructure bank as a possible job creation idea. It’s also not surprising to see how Immelt wants to pay for it.

The head of General Electric Co. said Monday he could support using a tax break for bringing back U.S. companies’ overseas profits to fund infrastructure projects.

Using a repatriation tax holiday — a tax break for companies bringing back overseas profits to the U.S. — to help fund an ‘infrastructure bank,’ would be a good idea, GE Chief Executive Jeffrey Immelt said at the U.S. Chamber of Commerce on Monday. Lawmakers have proposed starting a national infrastructure bank to provide low-interest loans and loan guarantees to build highways, energy projects and water infrastructure.

“We favor repatriation of our foreign cash back into the U.S., where it can do some good,” Immelt said. “I believe Senator Schumer has a good idea: taxes from repatriation could go toward creating the infrastructure bank that in turn creates jobs.”

Indeed, Chuck Schumer has talked about funding infrastructure with money from a dramatically reduced repatriation tax. One thing though: it’s a terrible idea.

I like the infrastructure bank idea—it’s a cool way to make smarter investment decisions. But here’s why this is the wrong way to go about funding it.

• There is no “money that comes back from abroad.” [...] The Treasury collects some money up front and then starts losing big time. Why?

• Because if companies with “overseas earnings” (these quotes are important, as I’ll explain next) learn that they can depend on a big tax break every few years, they’ll shift more and more earnings and jobs and investments abroad. To amplify this incentive has to be one of the craziest things we could in an economy that desperately needs those earnings, jobs, and investments here at home.

Precisely. And this has played out in the real world. The so-called overseas earnings aren’t even overseas earnings, they are domestic earnings stashed overseas. So we would reward tax avoidance by using the pittance corporations allow to be taxed in order to fund infrastructure projects that will benefit the corporations contracted to do the work and the corporations who will prosper from having solid infrastructure.

This is both absolutely insane and the considered opinion of the chair of the Obama Jobs and Competitiveness Council of the best way to get jobs moving in America again. CEO jobs, perhaps.

UPDATE: One of the companies touting a repatriation tax holiday, Cisco, is also planning to lay off 10,000 workers to conserve cash. Seems like they really need that tax cut so they can create jobs!