Sunday, August 14, 2011

Cutting means cutting ... there's no demanding the DEMAND for new jobs!


The answers coming from Washington are completely off the mark. The problems are both simple and very, very obvious. Technology has vastly decreased the amount of employees necessary to provide goods and services (irreversibly) & the demand for goods/services is very low because the middle class (U/L) are pinching pennies.

Let's be honest. No one is going to hire a new employee simply because they have more money due to a lower tax rate. Furthermore, no business that can afford to hire a needed new employee will chose not to do so because they fear the government is over spending on Medicare (as an example). Businesses large and small will hire a new employee only when there is a job that would not get done without doing so - the cost factor comes in second. If there is reduced demand for goods and services, there is a reduced demand for employees regardless of how much the employer has to spend. This is virtually scientific.

Yet we continue to buy the Republican talking point that reduced Federal spending will create jobs? Cutting spending means CUTTING jobs. Period. When the government cuts back it does so via layoffs. Notwithstanding one's preference for private vs public sector jobs, the balloon-like consequences are enormous. When a government employee loses their job they cannot support the businesses in their community & the result is the loss of private sector jobs. Likewise, when the government scraps a 'project' then the private businesses in that community suffer terribly.

A fair tax code, where profits (translation: the money bred of a successful transaction) are taxed at a rate ample enough to be redistributed throughout the economy via new business loans/support, AND government spending on infrastructure, defense, health care, transportation, safety regulation, emergency response &  the care of those who simply cannot care for themselves is simply the only way an economy as large as the United States' can function properly.

-GSW 7/8/11

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