Tell me...What would YOU do about this economic mess?

I agree that in the long term, private enterprise in the engine of growth.

But right now, private enterprise is not even using the resources it has, and we have millions of people and trillions of dollars sitting around not being utilized to create demand.

 

Nice talking point. So please explain is Govt laying off a couple million more workers going to help the economy in your learned analysis.

 

Good question, ELOrocks17.

Here are the solutions that will work best.

James Cessna

 

I agree. There is a delicate balancing act that must take place, but there are few who are willing to participate in the same; hopefully that will change soon.

 

Number employed by all governments:

May 2010: 23396
Jun 2011: 20858

The number increased significantly over last month, it is now 2.5 million fewer government employees.

The seasonally adjusted number is closer to a million, so there is apparently a seasonal factor involved.

But clearly, a decrease in government employment has been a drag (anti-stimulus) on the job creation picture.

Both Reagan and Bush saw major increases in government employment in their recoveries which helped the employment situation. We are seeing instead an "anti-stimulus" of more government layoffs.

 

You are absolutely correct, Truth Detector.

Especially when you say, "The fallacy of this latest Democrat talking point about focusing on jobs is that Government cannot create jobs and turn around an economy; but it can get out of the way and remove roadblocks and idiot legislation that prevents it".

The bank bailouts and expanding the size and power of the federal government were both big mistakes.

A policy of increasing employment in the public sector produces an endless spiral which then leads to a significant increase in our national unemployment rate.

Also, what most people don't realize is, for every Government job that is "created" the private sector must create at least NINE jobs to pay for it.

Here is how the math works. Taxes from each private sector worker go to pay at most 11% of the Government worker's salary and benefits. Therefore, it will take NINE private sector workers (100% divided by 11%) to pay for the salary and benefits of each NEW government worker.

The solution to this problem is obvious; we need to employ as few government workers as is economically and reasonably possible.

 

Exactly. More tax cuts just puts more money into those idle accounts. It would be nice just to keep up stimulus spending but we have been bequeathed with a gigantic debt that precludes that.

The only way to get some demand going without further deficits is to tax some of that idle money and get it out into the economy, creating demand.

 

Do you have a link? Not doubting you at this time, I would just like to see the context your data is in, because it is not consistent with the US Office of Personnel Management that says there were 4.443 million Federal Government Employees at the end of 2010.

 

Good catch, Nunya D.

The liberals in this group like to play fast and loose with their statistics.

This is why they seldom give us a source for their statistics when they quote them!

 

You've touched upon a major aspect of the overall solution.

 

The government was not and is not suppose to be a job creator in the first place. They run at such low productivity levels to begin with and very little money actually gets to the source as it is eaten up by so many government workers along the way.

The government is not suppose to be the place to get a job.

Is your argument that we should tax the people so the government can give out more government jobs?

 

So my father, a retired public school teacher, invested and saved his money. He has about $1 million in his retirement/investment account. Most of which owns bonds and stocks.

Are you suggesting we tax my father again on his idle money?

You just want to burn up the American Dream for those that SAVED and made money.

 

Question:

How does taxing anything create demand?

How are you going to tax” idle” money? How do you determine or test what money is “idle” and what money is not?

Perhaps the person who has “idle” money parked it into an account so he can do some analysis come to a good decision and invest it later. If you tax that money now, you reduce the amount that investor has available to invest as investment start-up capital.

You can easily see by this example this practice will work to reduce economic growth; not stimulate it.

James Cessna

 

Excellent question, Prohobo.

By the way, when it comes to our savings, here is what most liberals believe and how they think.

^


"My name is Representative Maxine Waters and I am a flaming liberal. And as a flaming liberal and a Democratic Socialist I must tell you the money in your savings and checking accounts does not actually belong to you. Instead, your money, the money you have worked so hard for, collectively, belongs to the federal government! This is why I support increasing our income tax rate to 70 percent like it was in the good old days before the Republicans were in charge of tax policy!”

 

Sorry, the board froze on me before I could add the link:

http://www.bls.gov/webapps/legacy/cesbtab1.htm "Government" adjusted and unadjusted options.

The US Office of Personnel would only include Federal Government employees.

 

It doesn't. It provides revenues which reduces deficits.

Tax the individuals and entities that are most likely sitting on the cash.

that doesn't help the economy now.

To the contrary. The money sitting idle is reducing economic growth.

 

But compared to idle resources with a productivity of zero, it is very productive.

Even Government workers spend money.

Is it better to have millions sitting around collecting unemployment?

Only in a recessionary environment.

I don't think we need the governments to actually create more jobs right now. But governments are doing the opposite -- they are terminating jobs by the hundreds of thousands and millions, adding to the idle, zero productivity pool of unused resources, and decreasing demand.

 

Your father may not be representative for the group as a whole.

But your father, the millionaire, is paying 15% or less on income from his assets, which is a lower rate than people who make less and work pay. Increasing the rate of tax on investment income is just one way to increase revenues and thus reduce the deficits while maintain spending and thus employment.

 

So let me get this straight.

My father (as I mentioned), a public school teacher, used his TAXED money to buy a few homes back in the 1970s. He sold those homes in 2000 and AGAIN paid taxes on capital gains. (taxed twice on his money).

Now he has over $1 million, a big chunk in cash the rest in bonds and stocks. Some of it is qualified.

As you put it - this money is sitting "idle" - and you WANT TO TAX IT A THIRD TIME?


While I would NOT say my dad is wealthy by any stretch of the imaginenation, frugal and a savings hound - sure. However, I know many people (including myself) that have SAVED their after-tax money - for my "American Dream".

I paid my taxes, several times over, on that money (income, sales, capital gains). Now it sits - in my bank account or the market. I try to EARN money investing - much of it "non-realized" and have a "cash account".

You want all these people that have SAVED their money, the responsible people, to bailout the poor, the government, and the losers that went on a spending spree?


What happened to the American Dream?

It's like you want to tax the people that have pursued the American Dream - have finally gotten there and now they have to pay for everyone else.

This is ABSURD!

 

My father does NOT have any income or investment income.

He does NOT sell his stocks or holdings.
He has about $1,000 to $2,000 per year in interest income.

What are you going to tax, non-realized gains?

 

When did your father pay taxes on it twice?

But no I don't want to tax his million.

Just the income he derives from it.

What happened to the American Dream? For most of the last three decades pandering politicians mortgaged it with tax cuts we didn't match with spending cuts and no we have a huge ass debt. That's what happened. Sorry.

 

Then he doesn't have anything to worry about.

 

Assuming we're jumping back to before this debt deal was struck, I would've cut government spending by a quarter with substantial cuts in SS and Medicare, raises in the retirement age planned with each passing year, withdrawing from Afghanistan and Iraq over a 6-month period, and cutting the military budget in half overall.

I wouldn't raise taxes or lower them. I'd just close up all of the loopholes.

I would raise the debt ceiling only the very minimum needed to keep things running while getting the Fed to raise interest rates to realistic levels.

 

I do not see anything to support your claim of 1.4 mil government jobs loss.

From May to May (June 2011 is preliminary) there is only a loss of 888 thousand for all Government...including Federal, State and Local.

Since we are talking about the Federal budget, we should only be looking at Federal job loses.

From May 2010 to May 2011 there was a loss of 588 thousand, however, in May of 2010, there was a increase of 427 thousand where there was never an influx like that in previous years. So, a better comparison would be from April 2010 to April 2011 where there was only a loss of 137,000 Federal Government jobs.

 

What defines idle resources for you?
Unrealized gains
Savings
Hard assets that have not been used as equity against a loan


What you think of as idle is another person's savings and future.

Justifying handing out government jobs (which tax payers pay for), so that government worker can spend money - is crazy.

Let me sum it up:

Tax person A to pay person B so that person B has money to spend.

I really don't see how that makes sense.

If person B can add productivity to a company or society he is paid that should reflect some level of productivity. However just to pay him with taxed money so he can spend seems - well - crazy.

This is a different debate, we continue to extend the benefits and now have emergency benefits as well. However, the government help fuel the bubble by driving down interest rates and allowing the GSE's to leverage 100:1 and let every nimrod use their home as an ATM to get themselves into debt.

If someone bother to SAVE their money and PAY their debts the unemployment picture would not look as significant as it is.

Not to mention people dont' want to swing a hammer anymore. That's why we hire all those south of the boarder people willing to make an honest living.

However - this is a different debate.

They should be laying off all the fat middle management and getting more productive.

Ironically that is just what many companies did during the recession. They realized the math in the equation, if revenue falls you better start cutting costs. Amazing how businesses where able to get more productive and survive, yet our government went on a spending spree with no budget and are now complaining.

Makes no sense at all.

The government can't hire people for the sake of hiring. It therefore can't keep people on the payrolls for the sake of keeping them on the payrolls.

Workers (public or private) have to be productive. If not they need to get fired.

I don't like it - it might not seem fair - but at the end of the day you can't tax part of the population to pay for another part of the population. That is plunder.