Making the Wealthy Wealthier Doesn't Create Jobs

[DontBeStupid]

Then give me an example of money in the private sector that does not create economic activity?

That wasn't my point. My point was that public sector money does stimulate and increase economic activity.

However, if you want an example of private sector money not creating economic activity, I'll point to the current $1.9T in cash that businesses are sitting on. In it's current form, that money is doing nothing.

Wrong again. Money never "sits" anywhere. If the money is in the bank it is being lent out to people who build businesses, buy homes and cars, etc. Money always goes to where it does the most good in a free market.

Businessmen will always try to put their money where they will get the biggest return and they will try avoid risk. If they don't want to invest it in their own businesses, that is because the projected return is not worth the projected risk. They may risk bankruptcy and having to lay off all of their employees if they expand their current operation. Ford saved it's business by downsizing, not by expanding.

It's not 1927 any more. People and businesses who want to save or invest their money have more options than just walking down to their local bank and putting it there. They can invest and save overseas. In that case, it is NOT put to use here in our country, as you seem to think it is.

 

[Leweman]

That wasn't my point. My point was that public sector money does stimulate and increase economic activity.

However, if you want an example of private sector money not creating economic activity, I'll point to the current $1.9T in cash that businesses are sitting on. In it's current form, that money is doing nothing.

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Says you ...but that's not necessarily the case in this economic climate and under this current government. Maybe the opposite is true for the time being. If they spend the money and its all for nothing what would that do to the economy?

 

[Sallow]

If you own your business and you employ 10 people. Then you employ 10 people because that's how many people it takes to supply the demand for your product or service. Just because the government hands you money, that doesn't encourage you to hire more people.

The ONLY thing that will prompt you to hire more people is an increase in demand for your product or service that requires you to hire more people in order to meet that bigger demand.

Without an increase in demand for your product or service, you will just pocket the extra money.

That's one of the reason's trickle down economics are idiotic. If you want to stimilute job growth, you have to increase the demand. THAT'S trickle UP economics.

While I will agree with your OP.

That's not the way it works.

Seriously.

 

[garyganu]

That wasn't my point. My point was that public sector money does stimulate and increase economic activity.

However, if you want an example of private sector money not creating economic activity, I'll point to the current $1.9T in cash that businesses are sitting on. In it's current form, that money is doing nothing.

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Why do you liberals always want to "force" people to make bad choices?

Every person and every business know how to spend his money is the wisest way, especially rich people. They wouldn't be rich if they didn't spend money wisely. The government wouldn't be in debt unless it spent its money foolishly.

 

[Sallow]

Henry Ford understood that by paying his workers more, he could expand the marketplace for his products. If no one can afford a new Model T, Mr. Ford would not have been able to expand his business.

If a company does nothing more with their profits than merely keep them (as so many companies do today), there is less capital exchanging hands. The movement of money around the marketplace is what creates growth, and thus jobs. If profits are stashed under the mattress as it were, the flow of capital shrinks as does the economy. Consumer spending is what drives our economy. Consumer demand creates the need among companies to expand operations.

Coddling the rich and consolidating wealth among the very few shrinks the consumer's ability to buy the very goods and services offered. Put more disposable income into as many hands as possible and watch our economy soar. Put more money into fewer and fewer hands and guess what happens?

Wrong. No one stashes their money under the mattress. Everyone invests their extra money. Whether you put it in the bank, in a money market fund, in the stock market or invest in real estate, that money is putting people to work or it is being lent to people who will buy houses, cars and build businesses.

A guy worth a billion bucks has about the same economic stimulus as a guy who stuffs money in a mattress.

True story.

 

[garyganu]

That wasn't my point. My point was that public sector money does stimulate and increase economic activity.

However, if you want an example of private sector money not creating economic activity, I'll point to the current $1.9T in cash that businesses are sitting on. In it's current form, that money is doing nothing.

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Tell that to someone who risked his money and lost it all. Only an individual or an individual business can decide how and when to risk their money.

 

[DontBeStupid]

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Tell that to someone who risked his money and lost it all. Only an individual or an individual business can decide how and when to risk their money.

You missed the point. If the business doesn't want to risk the money now, that's fine. The government would then tax it and distribute to some business that will risk it now. You assume the business not taking risks is doing so for perfectly right reasons. They might just be scared or greedy.

 

[Sallow]

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Tell that to someone who risked his money and lost it all. Only an individual or an individual business can decide how and when to risk their money.

Cool..list the second and third generation super rich guys that "risked" their own capital on a business..and lost it all.

There are probably a hand full of outliers..but most rich guys don't "get high on their own supply.."

 

[GWV5903]

If you own your business and you employ 10 people. Then you employ 10 people because that's how many people it takes to supply the demand for your product or service. Just because the government hands you money, that doesn't encourage you to hire more people.

The ONLY thing that will prompt you to hire more people is an increase in demand for your product or service that requires you to hire more people in order to meet that bigger demand.

Without an increase in demand for your product or service, you will just pocket the extra money.

That's one of the reason's trickle down economics are idiotic. If you want to stimilute job growth, you have to increase the demand. THAT'S trickle UP economics.

If it was only that simple...

Stick to dog fighting or whatever it is you do...

 

[garyganu]

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Tell that to someone who risked his money and lost it all. Only an individual or an individual business can decide how and when to risk their money.

You missed the point. If the business doesn't want to risk the money now, that's fine. The government would then tax it and distribute to some business that will risk it now. You assume the business not taking risks is doing so for perfectly right reasons. They might just be scared or greedy.

The government will likely invest in in losing propositions like Solyndra or the hundreds of billions of dollars of waste in the yearly budget.

If the company doesn't spend the money, they will put the money in the bank or investments where it will be loaned out to where it can do the most good. The government will ALWAYS spend it foolishly. Businesses and banks will usually make better financial decisions than the government.

 

[DontBeStupid]

Tell that to someone who risked his money and lost it all. Only an individual or an individual business can decide how and when to risk their money.

You missed the point. If the business doesn't want to risk the money now, that's fine. The government would then tax it and distribute to some business that will risk it now. You assume the business not taking risks is doing so for perfectly right reasons. They might just be scared or greedy.

The government will likely invest in in losing propositions like Solyndra or the hundreds of billions of dollars of waste in the yearly budget.

If the company doesn't spend the money, they will put the money in the bank or investments where it will be loaned out to where it can do the most good. The government will ALWAYS spend it foolishly.

Now you're just being overly emotional. Businesses are not perfectly right all the time just like the Government is not perfectly wrong all the time.

 

[nodoginnafight]

How about creating more demand because prices come down because the company creating the product is more profitable because it keeps more of the money it earned. (is that the basis of this thread by the way?, its getting kind of muddled)

Yes, it is getting muddled but I think what you're saying is worth reflecting on. if a lower tax spurs a lower price and If that lower price increases demand and if that increased demand prompts a bigger workforce to fill that greater demand ... then yes, I think that's very possible. It's a lot of ifs and a lot of potential choke points ... but yeah I think it's possible.

The above post suggests that it's a good theory - but it doesn't often work out that way in reality.

Every scenario creates a lot of ifs. What if a bunch of "lower class" people get a bunch a money and choose to save it in the short term to send to their kids to college later on?

Yep, what is more profitable (imho) is to deal with what is most likely.

 

[garyganu]

You missed the point. If the business doesn't want to risk the money now, that's fine. The government would then tax it and distribute to some business that will risk it now. You assume the business not taking risks is doing so for perfectly right reasons. They might just be scared or greedy.

The government will likely invest in in losing propositions like Solyndra or the hundreds of billions of dollars of waste in the yearly budget.

If the company doesn't spend the money, they will put the money in the bank or investments where it will be loaned out to where it can do the most good. The government will ALWAYS spend it foolishly.

Now you're just being overly emotional. Businesses are not perfectly right all the time just like the Government is not perfectly wrong all the time.

You're right, businesses are not perfect, but it is their money and they will carefully weigh the risk before they invest it. The government is not careful at all. It doesn't matter to the politicians because it is not their money. They are more concerned with the percieved intentions rather than the actual results.

 

[The Rabbi]

Well played! Rather than a truthful answer, you drag out the lame-ass response you have dragged out now for years.

You really aren't that bright at all, are you? Smoke in the boys room too much or just plain skip school every other day? I guess by now you would have learned that they we trying to educate your sorry ass back then and you were just wasting time.

Funny coming from a gov't tit-sucker like you.
You never answered what you know about how and why businesses make the decisions they do.

My family's business since 1923 has been a print shop. I know how they make decisions. They calculate how many customers will buy their services.

Thus endeth the lesson. Go listen to Rush or sign up for some adult education classes. Stop wasting my time the way you wasted your shot at a free education.

<giggle>
Really? That's it? Your family has a print business, which is probably going under because of desk top publishing. And that's how you know so much about it.
Geddoudahere!

 

[Katzndogz]

If you own your business and you employ 10 people. Then you employ 10 people because that's how many people it takes to supply the demand for your product or service. Just because the government hands you money, that doesn't encourage you to hire more people.

The ONLY thing that will prompt you to hire more people is an increase in demand for your product or service that requires you to hire more people in order to meet that bigger demand.

Without an increase in demand for your product or service, you will just pocket the extra money.

That's one of the reason's trickle down economics are idiotic. If you want to stimilute job growth, you have to increase the demand. THAT'S trickle UP economics.

Wow, your simplistic model of how the market works isn't flawed at all.

You are correct; no flaws in that at all. Without demand, there is no investment. There has to at least be potential demand. This is why Henry Ford decided it was so important to pay his workers well. He understood that if he didn't pay his workers enough to purchase what they were producing, then there would not be enough demand for his product and the whole business would collapse.

People can't start businesses when there is no demand for their product or service, and if regular people don't have the money, you can forget about any new business startups becoming successful.

Nonsense. People start businesses and services all the time with no demand. The product or service creates the demand. Was there a demand for the home computer before it was invented? Who was it clamoring for Facebook? Was there some public outcry for the cell phone, or the microwave? Demands can be created out of nothing, as was proved by the Pet Rock craze.

There is an idea, someone thinks there could be a demand for it. Then there is an investment, then comes the product. The demand comes last.

 

[garyganu]

Yes, it is getting muddled but I think what you're saying is worth reflecting on. if a lower tax spurs a lower price and If that lower price increases demand and if that increased demand prompts a bigger workforce to fill that greater demand ... then yes, I think that's very possible. It's a lot of ifs and a lot of potential choke points ... but yeah I think it's possible.

The above post suggests that it's a good theory - but it doesn't often work out that way in reality.

Every scenario creates a lot of ifs. What if a bunch of "lower class" people get a bunch a money and choose to save it in the short term to send to their kids to college later on?

Yep, what is more profitable (imho) is to deal with what is most likely.

Profit is not a dirty word. Profit is what motivated the most humane discoveries on earth. Profit employs more people than anything else. Profit is a wonderful motivator.

 

[The Rabbi]

A lot of folks on here are drifting off onto different points altogether. Now if you want to argue that the wealthiest and big corporations deserve tax breaks and loopholes just because it's their money and they should be entitled to hold onto more of it.

But just don't try to trot out that stupid argument that it creates jobs. It doesn't.

It terms of overtaxing the wealthy and businesses in the U.S. yes, the U.S. has some high tax rates. But doing business in the U.S. is incredibly profitable too. Why? Isn't it because people in the U.S. have so much purchasing power and THAT makes the priviledge of doing business in the U.S. worth more.

Anyway, you can argue back and forth on some of those points in a reasonable way. But you cannot argue that offering tax breaks and loopholes that are not tied to employment creates any jobs. It doesn't happen.

You've certainly drifted off your original point that businesses need to be regulated.

Anyway, let's see if we can pin you down here so we can have an actual discussion.
What do you mean exactly by "tax breaks and loopholes"? If you mean special breaks for favored businesses I doubt there is a conservative or libertarian here who wants that. I know I don't.
If you mean companies get a tax break because they can expense certain items, that isn't a break at all but an accounting rule. Taxes should be paid on what a company earns in profit, right? Calculating that profit is the issue.
But not all "tax breaks" are equal. If the gov't offers a limited deduction for a new piece of equipment for the next 12 months, not every business will rush out to buy a new piece of equipment. The only ones who will are the ones who were probably going to buy it at a future date anyway. This was the fallacy of cash for clunkers btw.
But if you offer a permanent tax reduction on earnings then companies have an incentive to keep more of their business here in the U.S. vs shipping it to countries with lower rates. If you offer lower rates on income, people have an incentive to work harder because they get to keep more of it. Their working harder generates more profit not just for them but for everyone affiliated with them.
How much money does Carrie Underwood make on every album she produces? How much do all the people affiliated with her, managers, roadies, record company execs, etc, make from her activity? At a certain point tax rates will discourage her from working because most of what she generates will go to the government. So she wont work as much anymore. Or she'll move to Singapore to avoid taxation. But whatever, all the people who earn money by being affiliated with her will lose that money.

 

[The Rabbi]

Don't forget Solyndra... that didn't create any activity either. Why should businesses risk losing their money because you say so, if they don't feel the current economic situation is conducive to them spending that money?

Because it's better for our country, economy and citizens if they risk the money and put it to use. This is why higher tax rates on companies leads to more growth. The companies are forced to either put it to use or pay it to the government, who then spreads it to people who will use it.

Why do you liberals always want to "force" people to make bad choices?

Every person and every business know how to spend his money is the wisest way, especially rich people. They wouldn't be rich if they didn't spend money wisely. The government wouldn't be in debt unless it spent its money foolishly.

I think FDR either actually instituted or proposed a tax on "idle capital." It was one of the things keeping the Depression going on and on.
Another bad idea dredged up from the past.

 

[The Rabbi]

Wow, your simplistic model of how the market works isn't flawed at all.

You are correct; no flaws in that at all. Without demand, there is no investment. There has to at least be potential demand. This is why Henry Ford decided it was so important to pay his workers well. He understood that if he didn't pay his workers enough to purchase what they were producing, then there would not be enough demand for his product and the whole business would collapse.

People can't start businesses when there is no demand for their product or service, and if regular people don't have the money, you can forget about any new business startups becoming successful.

Nonsense. People start businesses and services all the time with no demand. The product or service creates the demand. Was there a demand for the home computer before it was invented? Who was it clamoring for Facebook? Was there some public outcry for the cell phone, or the microwave? Demands can be created out of nothing, as was proved by the Pet Rock craze.

There is an idea, someone thinks there could be a demand for it. Then there is an investment, then comes the product. The demand comes last.

Actually the owner's paycheck comes last.

 

[Rozman]

If you own your business and you employ 10 people. Then you employ 10 people because that's how many people it takes to supply the demand for your product or service. Just because the government hands you money, that doesn't encourage you to hire more people.

The ONLY thing that will prompt you to hire more people is an increase in demand for your product or service that requires you to hire more people in order to meet that bigger demand.

Without an increase in demand for your product or service, you will just pocket the extra money.

That's one of the reason's trickle down economics are idiotic. If you want to stimilute job growth, you have to increase the demand. THAT'S trickle UP economics.

If you want to stimilute job growth, you have to increase the demand. THAT'S trickle UP economics.

You're funny....You create demand for people to buy more products....
Everything is made in China Einstein....The money you took away from the rich and gave to the poor just went out of the country to buy products made in China....