It seems to me that money has become lost in it's own success. Money was just a way to facilitate the exchange of goods and services. "Making money" has overshadowed production and the phrase "Don't work for your money, make your money work for you" is an example. The treasury of a country is not making wealth, its value is in that provides a measure of wealth and facilitates transactions.
The concept of business "owner" seems overly simplistic. Do wealthy people like Ben and Jerry, Bill Gates, Warren Buffet, and Paris Hilton really compare as far as a money/jobs ratio? How about Wealthy people like Tiger Woods, Beyoncé, and Christy Walton? I am sure that all of them have employed at least one accountant...
Then we have the concept of jobs. The word is thrown out as if it is some unquestionable power for good. Are people with three jobs triply blessed? What kind of jobs and what quality of jobs are being produced? Mechanization has eliminated many jobs in farming, but I doubt that there would be a willingness to outlaw combines to open up some jobs picking corn.
Taxes and "job creators"...
-
I.D.10-t
- Posts: 7660
- Joined: Wed Dec 17, 2003 9:57 am
- antispam: No
- Location: Minneapolis, MN, USA, Earth
Re: Taxes and "job creators"...
"Be not deceived by the sweet words of proverbial philosophy. Sugar of lead is a poison."
-
jileha
- Posts: 79
- Joined: Fri Mar 02, 2007 2:56 pm
- Please enter the next number in sequence: 1
- Location: California
Re: Taxes and "job creators"...
Doesn't it boil down to the two opposite schools of thought - a demand-driven vs. a supply-driven economy?
For those favoring a supply-driven economy, it make sense to give more money to those who can use the extra money to manufacture more products, which needs more employees to do so. Thus, more jobs are created. "If you build it, they will come" translates into "If you produce it, they will buy it", which will boost the economy. One good example that seems to prove it works is Apple. They release a new version of the iPhone, and people do everything to get their hands on it. Do they really need the latest version? Does it really offer that much innovation in comparison with the previous model to justify this expenditure? Probably not. So Apple needs to hire more people, most of them in China, but they also need more sales staff in the US.
The other school argues that if there is no customer base to buy products, it doesn't make sense for the manufacturers to produce more. On the contrary, in order not to waste money by overproducing, they have to down-scale their production and lay off people. So giving those people more money doesn't make any sense because it also wouldn't make any sense for them to invest this moneyinto their business. What does make sense is giving the money to the consumer base to increase their buying power. Particularly people with lower incomes or trying to make a living on unemployed benefits have no choice but to spend this money immediately on essential things such food, clothing, transportation, etc. A higher demand for products requires a larger workforce to satisfy that demand. Manufacturers need to hire more people. Less unemployed, more people with yet more money to spend. The economy improves.
In a world where most people have enough money to save a good chunk each month, these two approaches are probably much less of an issue and can balance each other out to some extent. However, in a world where more and more people are considered poor and the buying power of most people has considerably shrunk, the different effects of these two schools of thought become much more important.
For those favoring a supply-driven economy, it make sense to give more money to those who can use the extra money to manufacture more products, which needs more employees to do so. Thus, more jobs are created. "If you build it, they will come" translates into "If you produce it, they will buy it", which will boost the economy. One good example that seems to prove it works is Apple. They release a new version of the iPhone, and people do everything to get their hands on it. Do they really need the latest version? Does it really offer that much innovation in comparison with the previous model to justify this expenditure? Probably not. So Apple needs to hire more people, most of them in China, but they also need more sales staff in the US.
The other school argues that if there is no customer base to buy products, it doesn't make sense for the manufacturers to produce more. On the contrary, in order not to waste money by overproducing, they have to down-scale their production and lay off people. So giving those people more money doesn't make any sense because it also wouldn't make any sense for them to invest this moneyinto their business. What does make sense is giving the money to the consumer base to increase their buying power. Particularly people with lower incomes or trying to make a living on unemployed benefits have no choice but to spend this money immediately on essential things such food, clothing, transportation, etc. A higher demand for products requires a larger workforce to satisfy that demand. Manufacturers need to hire more people. Less unemployed, more people with yet more money to spend. The economy improves.
In a world where most people have enough money to save a good chunk each month, these two approaches are probably much less of an issue and can balance each other out to some extent. However, in a world where more and more people are considered poor and the buying power of most people has considerably shrunk, the different effects of these two schools of thought become much more important.