Does Demand Create Jobs? Well Sorta

[Wiseacre]

I hear the left saying it all the time - tax cuts for the wealthy doesn't create jobs, demand does. Which is fine, except it isn't the whole story. I think more demand is the primary driver, without that nobody hires more people. But then the question becomes how do you create more demand and then how do you create more jobs to satisify it.

The liberal approach is to redistribute the wealth - take money from those who earned it and give it to those who haven't, specifically the lower income folks. Sounds great, they'll spend the money and create demand and we get more jobs. Except for one thing, it doesn't work. Tax rebates have been tried, big stimulus has been tried, but it never works because it's temporary. I remember getting a couple of tax rebates during the Bush years, but IMHO it never moved the needle.

So, what about a tax cut? Now that's more permanent, and it did work for Reagan and also for Bush in 2003. The economy and employment picked up very nicely thank you, until the recession hit in 2008. Some say those tax cuts lead to the recession, which is total nonsense IMHO, there were several reasons why the recession happened, but the Bush tax cuts were not one of them.

So would tax cuts mean we'd get more jobs now? I think that's debateable until and unless our leadership comes up with a bi-partisan plan to deal with the debt and deficits, nobody is going to be overly optimistic about starting new businesses. Which is where about 75% of all new jobs come from. Gonna have to de-regulate somewhat too, it's too damn hard, expensive, and time consuming to startup a business in this country.

And one more point about new jobs - you need capital. Demand is the first priority, but you gotta have some money behind you, and tax cuts make that money more available. Tax hikes on the other hand make that capital less available, and in today's global economy money flows to where it gets the best ROI.

So, demand does create jobs, but not by itself. Oh yeah, the local supermarket or merchant will hire more people when more customers start coming in to spend money. But we need more than that, we need new businesses and expansions to existing businesses. And that means attracting more capital.

 

[xsited1]

True. Here's a great quote to sum it up:

When business lack clarity, they can’t plan ahead — choking expansion, investment and job creation.

That's what the Obama Administration has done. It's a job-killing machine.

 

[expat_panama]

...tax cuts for the wealthy doesn't create jobs, demand does...

Sounds like the leftists are saying demand and tax-cuts are 'either-or', that we can't have both at the same time.

 

[rdean]

Hate to break the news to you guys, but if there is no demand, there are no jobs. Try to figure out why.

 

[Care4all]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown....stimulus is not really a stimulus if it is not all spent and concentrated within a short period....yep, the obama stimulus was definitely not all stimulus....because it was spread out and piece-meal.

*rebate check would be more effective, but tax cuts could work too

 

[expat_panama]

...the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown...

...if there is no demand, there are no jobs...

If anyone cares we can study this for ourselves by looking at how tax-rate cuts have affected demand in the past. That could tell us a lot about how much we want tax-cuts now.

 

[Care4all]

...the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown...

...if there is no demand, there are no jobs...

If anyone cares we can study this for ourselves by looking at how tax-rate cuts have affected demand in the past. That could tell us a lot about how much we want tax-cuts now.

well, I could have spoken too soon....a tax break, if it is an SS tax break of the whole sum of SS taxes for 3 months or 4 months, could possibly work....but it still would not be as fast as the "in your hand tax rebate or stimulus'' that could be spent all at once....IF given to the middle class and below... I presume?

 

[The Rabbi]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown....stimulus is not really a stimulus if it is not all spent and concentrated within a short period....yep, the obama stimulus was definitely not all stimulus....because it was spread out and piece-meal.

*rebate check would be more effective, but tax cuts could work too

This has been explained many times.
Sending people money does nto create demand or jobs. There is no "multiplier effect."
We have just had about 3 years of this experiment (again) and the results are that such thinking is wrong, totally wrong.
The truth is that investment creates jobs. How much demand was there for a Kindle before the first one was sold? Answer: Zero. Same with an iPhone or any other gadget. first there was an idea, then an investment to develop, produce and market. Finally there was demand.
But unless companies perceive a business atmosphere that is favorable to risk taking, they won't do it. And that is what we have right now.

 

[Care4all]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown....stimulus is not really a stimulus if it is not all spent and concentrated within a short period....yep, the obama stimulus was definitely not all stimulus....because it was spread out and piece-meal.

*rebate check would be more effective, but tax cuts could work too

This has been explained many times.
Sending people money does nto create demand or jobs. There is no "multiplier effect."
We have just had about 3 years of this experiment (again) and the results are that such thinking is wrong, totally wrong.
The truth is that investment creates jobs. How much demand was there for a Kindle before the first one was sold? Answer: Zero. Same with an iPhone or any other gadget. first there was an idea, then an investment to develop, produce and market. Finally there was demand.
But unless companies perceive a business atmosphere that is favorable to risk taking, they won't do it. And that is what we have right now.

Kindle was not created in a vacuum Rabbi....you are just clueless on this and should stay out of these conversations.....

Most all products are not created out of the clear blue....Kindle was an idea that extended from customer demand and use of other products..... kindle improved on what was happening with the demand of computerized reading products and it was TESTED to see what kind of demand it would create BEFORE the company invested in it from here to high heaven.

NO ONE, no one just creates something out of the clear blue, and spends all of their money stocking it, UNLESS they have a pretty good reading on what it's demand will be. It is FOOLISH to do otherwise.

 

[The Rabbi]

You are a total idiot. We will repeat your familiar pattern: I make the arguments and you abandon the discussion.
I'll repeat: There was no demand for Kindle before one was produced. Marketers and engineers might have gotten some indication it would be a good product. But there was no actual demand.
Demand came after investments of time and money in research, production and marketing.
That is certainly clearer than the supposition that if you send people money they'll spend it and save the economy. We have tried that twice and both times it didnt work. It is the most discredited theory of the left's many discredited theories.

 

[expat_panama]

...If anyone cares we can study this for ourselves by looking at how tax-rate cuts have affected demand in the past. That could tell us a lot about how much we want tax-cuts now.

...IF given to the middle class and below... I presume?

Let's get together on what we mean by 'giving' a tax-cut to the 'poor'.

First, taxes take away money that was earned by hard working people. The state is not giving away anything when it decides to suddenly to take less of those earnings. Tax-cuts give nothing to the the rich or the poor.

Second, taxes are paid by people with money, the rich have money and the poor don't. The poor don't pay taxes and the rich do. OK, in real life there are no 'rich' and 'poor', and there are always people who have a little money and pay a little in taxes. Just the same, taxes hurt most those with more money, and tax-cuts mostly reduce harm done to those with more money.

Therefore a tax-cut' isn't something that can be 'given', and a tax-cut mainly affects the upper and middle class. Are we still together?

 

[xsited1]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown....stimulus is not really a stimulus if it is not all spent and concentrated within a short period....yep, the obama stimulus was definitely not all stimulus....because it was spread out and piece-meal.

*rebate check would be more effective, but tax cuts could work too

This has been explained many times.
Sending people money does nto create demand or jobs. There is no "multiplier effect."
We have just had about 3 years of this experiment (again) and the results are that such thinking is wrong, totally wrong.
The truth is that investment creates jobs. How much demand was there for a Kindle before the first one was sold? Answer: Zero. Same with an iPhone or any other gadget. first there was an idea, then an investment to develop, produce and market. Finally there was demand.
But unless companies perceive a business atmosphere that is favorable to risk taking, they won't do it. And that is what we have right now.

Kindle was not created in a vacuum Rabbi....you are just clueless on this and should stay out of these conversations.....

Most all products are not created out of the clear blue....Kindle was an idea that extended from customer demand and use of other products..... kindle improved on what was happening with the demand of computerized reading products and it was TESTED to see what kind of demand it would create BEFORE the company invested in it from here to high heaven.

NO ONE, no one just creates something out of the clear blue, and spends all of their money stocking it, UNLESS they have a pretty good reading on what it's demand will be. It is FOOLISH to do otherwise.

You missed the point entirely. There was no demand for the Kindle before it hit the market. Period. End of story.

 

[rdean]

...the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown...

...if there is no demand, there are no jobs...

If anyone cares we can study this for ourselves by looking at how tax-rate cuts have affected demand in the past. That could tell us a lot about how much we want tax-cuts now.

If one doesn't have a job, all the tax cuts in the world don't mean a thing.

In fact, the latest report I read said American businesses are sitting on over two trillion in capital. Many are using that money to make acquisition's and then shipping THOSE jobs overseas.

There are several reasons why they are sitting on so much money. For one, so many Americans are out of work, there is no demand because no one has any money except the companies. Another is the huge tax breaks and tax write offs already given by Republicans during the Bush Administration. Another is they can pay a Chinese worker 51 cents an hour. Now they are sitting on piles of money trying to figure out how to spend it to make more money but Republicans keep saying, "Rich people make jobs". And they do, in a way, "IN CHINA".

It's a vicious circle. The only thing Republicans know is "cut taxes and hate government". Now that their policies have failed, they don't have anything else to do. It's probably why their leaders are creating diversions with abortion and gay rights. Besides "cut taxes and hate government", what else do they have? Seriously, WHAT.....ELSE....DO....THEY....HAVE?

 

[Norman]

Demand does create jobs...

The same jobs that were purged by the market before the recession.

 

[JBeukema]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

Rebate checks don't work because people put them away as savings. Cutting income/ss tax for the lower class puts more money in their pocket every payday- and that money gets spent.

the poor and middle class SPEND their 'stimulus' tax savings the fastest, is what all the studies have shown....stimulus is not really a stimulus if it is not all spent and concentrated within a short period....yep, the obama stimulus was definitely not all stimulus....because it was spread out and piece-meal.

Wait, what?

*rebate check would be more effective, but tax cuts could work too

See above.

 

[The Rabbi]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

Rebate checks don't work because people put them away as savings. Cutting income/ss tax for the lower class puts more money in their pocket every payday- and that money gets spent.

BUt the money has to come from somewhere first. So it is taxed or borrowed elsewhere and no new wealth is created because there is no incentive to change behavior.
Cut taxes at the margin and you create more incentive to work and create more economic activity.
This is Econ 101 btw.

 

[JBeukema]

a tax cut on SS taxes would work as well as a rebate check for a demand stimulus etc.....

Rebate checks don't work because people put them away as savings. Cutting income/ss tax for the lower class puts more money in their pocket every payday- and that money gets spent.

But the money has to come from somewhere first. So it is taxed or borrowed elsewhere

No, it doesn't, you stupid fucking ****. It's just not taken from their check in the first place.

This is Econ 101 btw.

 

[The Rabbi]

Rebate checks don't work because people put them away as savings. Cutting income/ss tax for the lower class puts more money in their pocket every payday- and that money gets spent.

But the money has to come from somewhere first. So it is taxed or borrowed elsewhere

No, it doesn't, you stupid fucking ****. It's just not taken from their check in the first place.

This is Econ 101 btw.

It is Econ 101, you goose-stepping fucktool. And you don't understand word one. So go back to getting your ass reamed by your little SS buddies.

 

[rdean]

Supply and Demand.

Investment.

Those are the foundation of capitalism.

If you have no job, you don't pay taxes. So a tax cut means nothing.

If you have no money, there is no demand and that means, "no jobs".

I've discovered two important things:

1. Republicans don't know what capitalism is.

2. Republicans have no ideas on how to help the economy that suffered from their ruinous policies.

How is it possible to debate these people? They don't know enough to debate.

 

[JBeukema]

Not taking money from your check isn't giving you anyone else's money- it's not taking money that's already yours.


It's not that fucking complicated, you illiterate fucking retard.


Why do we let you vote?