Wonder Gem rdmcandie wrote:
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But those jobs aren't guaranteed to generate productive output in excess of their cost, are they?
Are any jobs no, be they via public or private investment.
Of course they are. Because in the private sector, if your labor doesn't benefit me, I'll lay you off. In the absence of the government stepping in and forcing employers to hire and pay people, we can pretty safely assume that the overwhelming majority of people who are currently employee in the private market are employed at a cost that is less than what their employer gains from their labor. If it wasn't, the employer would lose money on them and quickly get rid of them.
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There is no garuntee that one job will be productive. Which is why the jobs are coming back so slowly. There is no garuntee that people will buy products, or said products will be relevant tomorrow, next month, next year. It is always a gamble enterprising a product.
But at a macro-economic level, you absolutely can say that "employment" must be productive in excess to its cost in the private market. I suspect you are missing the point I'm trying to get across.
The government's revenue is not dependent on the jobs it creates being productive, thus there's no requirement that said jobs be productive relative to their cost. The total labor an employer hires absolutely has to cost less than it produces, otherwise he'll go bankrupt. He can't pay his workers more money than his business makes, right? It's kinda axiomatic.
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The difference that Government can make is through Static Investment. If they were able to take taxes from one area and lower them in another. For example take taxes from the top 10% of earners, and use those taxes to offset a tax decrease on companies, small companies can use that money to staff more people. More people staffed is more tax revenue. If the owners of these companies do not hire more people and in turn just pay themselves than the govt taxes these higher bracket earners and still gets some return on their investment.
How is that by any definition an "investment"? Can we please be honest with the terms we use? What you're describing is a methodology for government to maximize the amount of revenue it can take from the private economy. It has *nothing* to do with investment. Period. I know that politicians like to use the investment label when talking about government spending, but that's really not what's going on.
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No thats not waht I said at all. The majority of foreign investment from private entities in the USA comes from the wealthiest americans. Middle income/Lowincome tend to invest in products they recognize, home grown things like Googles, and Microsofts, and Fords. These people alse spend considerably more (due to population differences) on everyday products in the USA. Products above food/shelter/clothing. Products like Cars, Computers, Video Games, etc etc etc.
This is total BS. People invest their money in whatever will generate the most profit for them. If you want people to invest in domestic companies and domestic products, then you need to make those companies and products more attractive and profitable. Raising taxes and mandating additional employment costs isn't going to do that. Please tell me you can understand this.
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The reason you see Fords and GMs moving to mexico's and China's is because of cheaper labor which means a fatter bottom line for them. They invest in other lower market countries to ensure they get maximum dollar value. It has nothing to do with controlling the money inside a nation, its about keeping that money inside the nation. A new plant in mexico does nothing for the thousands of american auto workers without a job.
But it does allow millions of American consumers to buy a better car for less money. But this is really beside the point. The issue of offshoring is far more complex than what we're talking about here. The question is whether or not profits made by the wealthy and businesses inside a country benefit the people living in said country if the government doesn't intervene.
That's what trickle down is about, right? And it's not just about jobs and wages, and doubly so not in the super-simplistic way you're expressing it. It's also about development of new products, and improvements to existing products, and drops in relative costs of both.
If I double everyone's wage, but triple the cost of everything you buy, I haven't improved your condition, have I? Similarly, we can say that a reduction of the relative cost and/or increase in the quality of consumer goods is equivalent to an increase in wages. Wages alone are only part of the equation. If wages are flat, but the quality and quantity of available goods have increased, and the cost of many of those goods has decreased relatively speaking, then those people's lives have been improved. Even if they did not get a raise, or a better job, their lives are better. Yes, even if the products they're using were made in Taiwan.
You're also losing sight of something. Employment rates dropped the most *after* we passed the stimulus bill, and that was after the companies which lost money from the housing bubble had been bailed out by TARP. Now we can assume that there was some magical and undefined thing which continued to cause employment to drop at a greater rate than during the height of the crisis *or* we can look around for other causes. And when we do the latter, we can look directly at the uncertainty created by the massive borrowing required by the stimulus and the additional uncertainty caused by failing to extend the Bush Tax cuts.
That's perhaps a side issue, but is relevant to a degree. Trickle down assumes that people are benefited by "the rich" having more money. But it's more complicated than that. The rich have to both have money *and* believe that they can gain more by investing their money in expanded domestic business. If you adopt policies which hurt both of those things, you should not be surprised when things get worse for the poor and working classes. They will bear the brunt of those things.
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No I am suggesting the Govt stop being idiots and thinking not taxing the rich is the way to fix the economy.
Are you arguing that taxing the rich *is* the way to fix the economy? Cause I don't think it's that simple.
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Seems like everytime the GOP gets in and flaunts their tax cutting scissors around, people lose jobs. Lots of them. Seems as if their social spending programs do work (that or actually putting money back into companies via tax relief made available by taxes on the rich.)
Um... You're missing the other side of the correlation. It's not just about tax rates, but about how well business is doing. In the late 90s we had a booming economy, and unemployment was good. We also had a booming economy in the 2005 - 2007 time period, but you wouldn't know it from the media coverage. Things did not start to get crappy for the workers until the rich lost a bunch of money on their housing investments.
The correlation is that when the rich make large profits, the working class benefits by having more and better jobs. How we get to the rich making large profits can vary, but as a general rule, taxing the hell out of them isn't a great idea.
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His tax cuts did nothing but lower the amount of revune available. He fought 2 wars and Had nearly 8% less overall in the budget than Clinton. Not to mention losing 3% employment on top of that for a further loss of income.
That's not even relevant math. You may as well just spout random numbers and insist that they support what you are saying. How much is in the budget is irrelevant. All that really matters is how much you are taking from the private economy, and how much debt you have relative to the size of the economy.
What Bush did was drop the percentage of the economy which was being taxed, which did create a deficit. However, after just a few years, the economic growth offset those deficits, allowing us to sustain a consistent debt to GDP ration in the 35-37% range. Contrasted to the Clinton administration, during the last year when the Dems still controlled congress, and that ratio was 50%.
The correlation you are missing is that Congress actually holds the purse strings. It's not all just about the president. And it's not just about tax rates, but overall how friendly the environment is to business. Tax rates are just one aspect of the issue.
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But yes trickle down economics really do work.....
Yes. It really does. Probably not in the strawman ways you've been taught though.
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Soure: http://www.taxfoundation.org/publications/show/151.html.
What do you think this source tells us? I'm always amused when people just post a link to some site and don't bother to provide any explanation as to why said site actually supports what they are arguing.
I'll also give you a hint: Nowhere in any of those tables with tax rates, and employment rates, and revenue and debt, and all those other indications can you find a real measurement of "people's lives are better". That's the problem with the academic economic approach that the left seems to love. They forget that there are people who make up those economic statistics. And people don't tend to like being treated like mere statistics. If your entire policy is based on treating people like either sources of revenue for the government, or targets for funding for government, don't be surprised when they see your policy as dehumanizing. You're so focused on what the numbers say that you lose sight of the people.