Economists say income gap hurts U.S. economy

[Viren]

I disagree. I believe the rich does more moving money around than the middle class and poor. I believe the middle class and poor will use a larger percentage of their money to pay bills and maybe put a few bucks in the bank. The rich will invest more and that is better for the economy

Oh they'll invest it alright. In the tech bubble, housing bubble, oil bubble, gold bubble, bond bubble. It generally leads to economic chaos.

 

[Ken-1122]

Depending on the stuff, perhaps. Stuff is often cheaper nowadays, because of outsourced manufacturing, which also means less manufacturing jobs for Americans. This results in a net loss for working people.

It also means you can buy more with less money.

Sure, but look at all the money we're saving on buggy whips and bowler hats!

The reason everybody has cell phones and pay $150 per month to watch TV is because they can afford it. If things were as bleak as you say everybody wouldn't have these things.

And less jobs, because very few of those things are made here in the good old USA.

I don't agree there are less jobs in the USA, I believe there are more. You have more women working so there is a higher percentage of the population working today than yesterday and before the recession unemployment was still between 4%-6%. Right now it is around 8% but it's still going down.

True. Cars often do last longer, but more people today own a car than was the case in the 50s and 60s. Back them, my father took the streetcar to work; today, I drive instead. So does my wife. It's a different world.

If the working class had so much money to spend in your father's day, he probably would have been able to afford a car like you and your wife.

I've offered a few suggestions. In the end, the middle and working classes need more of the economic pie,

Don't confuse having a smaller percentage of pie with having less pie.

because without their spending habits fueling the economy, it won't function as well as it could. The simple fact of capitalism is, 20% of the population cannot spend enough money to sustain an entire economy and allow for growth. More people need more money to spend.

I disagree! Weather it be the 20% or the 80%, it doesn't matter who spends the money, as long as it gets spent, the economy will be sustained.

In short, we need more jobs. And throwing money at rich people hoping they'll create jobs because they have money to burn won't cut it. The only thing that will justify more jobs in a capitalist economic is consumer demand. If more consumers have more money to spend, businesses will hire more people to make things and provide services to earn that money, and we'll all sleep better to the constant hum of capitalism.

So where do you suppose most of those jobs are going to come from; thin air?

It was just a couple pages back, post 516:

I don't think your graph makes your point very well. It only shows 3 jobs; construction (illegal aliens have really gotten into that industry and brought down the wages) Manufacturing, and mining. There was a bit of a spike in the mid to late 1970's for about a 5 year period then it went down but appears to be going back up again. But that is just 3 industries.

They can't. Mathematically. There's less of them.

20% of the population is less than 80% of it. That's just basic math. And when only 20% of the population control over 80% of the money, well, they cannot move around as much money as 80% of the population can.

How do you figure? When 1 person invests a billion dollars in various companies, that single person is moving more money around than a million poor people will in a lifetime. The fact that one person does it doesn't matter; as long as the money is moving, the economy is sustaining.

Less in the bank, more in bills and stuff, traditionally. But paying bills and stuff, that's what capitalism is all about!

Paying bills doesn't create as many jobs as investing in corporations.

And you'd be wrong. Allow me to demonstrate: where did the increase of money the rich have gotten over the past 30-40 years come from? And don't say it was "created" somehow, as if from thin air, the money they earn has to come from somewhere.

I thought I explained this to you already! when people invest money it doesn't come out of thin air; it is generated. Example; if I invested a million dollars in your business, and because of my investment you are able to expand your business, hire more people, and serve more customers; and a year after my investment your business is now worth an additional 5 million dollars as a direct result of my investment, where did that additional 4 million dollars come from; thin air? No it was generated.

Why is that a problem, all by itself?

S&P were the ones who mentioned the debt of over 11% as being a reason for the down grade, why don't you ask them?

The share of GDP didn't cause our credit rating to go down. S&P stated their reasons, and it wasn't because of the debt's ratio to the GDP alone.

It may not have been the only reason, but it was one of the reasons. They specifically mentioned the 11% debt as one of the reasons.

But I can hope we, at least, find some degree of common ground. Either way, I'm still enjoying our exchange, it's very illuminating!

-- A2SG, not to mention helping hone my google reflexes!

Yes! I agree.

Ken

 

[Ken-1122]

First of all, let me just say I'm not an ardent supporter of President Obama. That said, you have some slight errors or misconceptions here:



Sure, on cigarettes and tobacco, as well as on indoor tanning as part of the ACA. The ACA does also increase IRS penalties on those who don't have health insurance, $95 bucks per person in 2014, more as time progresses.

Also as part of the ACA, those earning more than $200,000 (or couples that make more than $250,000) a year had to pay an additional 0.9% in medicare taxes, also 3.8% of investment income.

That's it. He didn't raise income taxes at all, or any other taxes beyond those.

But he wanted to. The reason he has not been able to raise taxes as much as he would like is because the republicians kept him from doing it.

The Affordable Care Act is in no way, shape or form anything close to socialized medicine. Period. Full stop.

How is it different?

Oh, I'll agree he talks a good game at being a liberal.

But when you look at his policies and what he's actually done in office as President.....

No.

Not by a long shot.

The reason he talks a good game being a liberal is because that is what he believes. He is only president; it's not like he can go in there and do whatever he wants! He has other people he has to work with.

Ken

 

[Ken-1122]

Also, I'd strongly discourage outsourcing of American jobs. I'd impose a prohibitive tariff on any US company that manufactures overseas for import to the US. Let them manufacture overseas for overseas sale all they want to, but if the goods are to be sold here, let them be made here, by American workers. Or let the company pay for the privilege of cheap, slave labor in third world countries.

Now that I agree!

Ken

 

[A2SG]

No other ideas from me.
It is laughable though to see how easily that the same advocates of the rebuilding of the infrastructure and the shovel ready jobs shoot down even their own ideas so reflexively.

Sorry, what ideas are we shooting down reflexively, exactly? You mentioned one idea, I mentioned a legitimate issue with it, potentially devastating environmental damage, and suggested we check it out more first. For example, make sure the companies who are pumping the tar sands can clean it up if and when there's a spill. Considering how difficult that is, and the fact that many companies are not doing that where they should be, it seemed a legitimate concern.

Surely there are other ideas, other projects that we can come up with that could employ Americans? Is that truly all you can think of?

Shovel ready jobs and building the infrastructure were the promises of six years ago.

Yup. And we should have done a better job of doing it. We still need to.

There is nothing that doesn't hurt the environment.

Maybe, but some things are worse than others. We need to be sure we can clean up a devastating mess before it happens. Well, happens more. There have already been quite a few spills, and in many cases, they're still wreaking havoc.

Let's invest a little time in making sure we can deal with these messes before me make a lot more of them!

You want to close the income gap it takes jobs to do that, especially the blue collar jobs that are being shipped to China.

Agreed. So, I've offered a few ideas already, can you offer a second one?

As if the environment was not even more global than the economy.

Exactly why we need to be we know what we're doing, and can fix the problems we create, before we work with something as risky to the environment as tar sands oil can be.

-- A2SG, really, that's all I'm asking for.....

 

[A2SG]

Jobs hurt the environment. Jobs close the income gap.
Your choice.

Not an either/or question. We can create jobs without damaging the environment irreparably, and making it impossible to live in it.

-- A2SG, it is possible, you know....

 

[Jeffwhosoever]

Not an either/or question. We can create jobs without damaging the environment irreparably, and making it impossible to live in it.

-- A2SG, it is possible, you know....

I agree, leave it to the environment to close the income gap! Problem solved, case closed!

 

[Jeffwhosoever]

On a more serious note, is lifting 900,000 people out of poverty with a $10/hr minimum wage worth 500,000 losing their jobs? How does one make such a tradeoff?

http://www.usatoday.com/story/news/politics/2014/02/18/cbo-minimum-wage-jobs/5582779/

 

[A2SG]

It also means you can buy more with less money.

It also means less money to pay bills, which don't necessarily go down along with the price of cheap manufactured goods.

It all adds up.

The reason everybody has cell phones and pay $150 per month to watch TV is because they can afford it. If things were as bleak as you say everybody wouldn't have these things.

Who said things were bleak? People can be affected by the recession and not be homeless, you know.

The fact of the matter is, and remains: when the middle and working classes have less money to spend, less money moves around; and that's bad for the economy.

It's pretty simple, really.

I don't agree there are less jobs in the USA, I believe there are more.

You got facts to back that up?

The fact of the matter is, even if the job numbers are comparable, they still pay less, on average, than a generation or so ago. Which means less money for working people.

Which is, again, bad for the economy.

You have more women working so there is a higher percentage of the population working today than yesterday and before the recession unemployment was still between 4%-6%. Right now it is around 8% but it's still going down.

And....

None of that disproves my point.

If the working class had so much money to spend in your father's day, he probably would have been able to afford a car like you and your wife.

As I recall, he had a car when I was a kid, but he must not have taken it to work every day. Perhaps he took public transportation because streetcars were more reliable back then, and he lived and worked where they were accessible. Not so with us, today.

Don't confuse having a smaller percentage of pie with having less pie.

It works out the same. See, the problem with most of the people having a smaller percentage of the economic pie is that there's less movement of money through the system, and the movement of money is what drives capitalism. Less movement is bad for the economy.

I disagree! Weather it be the 20% or the 80%, it doesn't matter who spends the money, as long as it gets spent, the economy will be sustained.

More spending is better, less spending isn't. More people spend more money, less people spend less.

How simple does it need to be?

So where do you suppose most of those jobs are going to come from; thin air?

I told you, increased consumer demand. If more people have more money to spend, that clearly means there's a market for the things they buy. When there's a market, a smart businessman fills it by hiring people to make or sell a wanted product or service.

Again, capitalism.

I don't think your graph makes your point very well. It only shows 3 jobs; construction (illegal aliens have really gotten into that industry and brought down the wages) Manufacturing, and mining. There was a bit of a spike in the mid to late 1970's for about a 5 year period then it went down but appears to be going back up again. But that is just 3 industries.

Any increases are slight, and the trend isn't upward, it's stagnant. And the current is level nowhere near where it was 40 years ago.

Like I've been saying, wages are down.

You asked about specific industries, those are the ones I found. If you want to provide contrary evidence that shows a different trend, by all means, go ahead.

I haven't found any such evidence, but of course, you're free to try yourself.

How do you figure? When 1 person invests a billion dollars in various companies, that single person is moving more money around than a million poor people will in a lifetime.

Not if that money doesn't create a lot of jobs. And, let's not forget, corporate profits are higher than ever, while wages and jobs aren't. Clearly, it's not working nearly as well as it's supposed to.

The fact that one person does it doesn't matter; as long as the money is moving, the economy is sustaining.

If that money doesn't create jobs, it isn't moving much at all. It just stays at the top, very little of it trickles down. Which is why the top 1% of the population control over a third of the money in the system all by themselves.

Paying bills doesn't create as many jobs as investing in corporations.

Depends. Utilities and services need people to provide those services, maintain them, sell them, bill them, etc.

Jobs are jobs. We need all of them, corporations as well as utilities and other service providers.

I thought I explained this to you already! when people invest money it doesn't come out of thin air; it is generated. Example; if I invested a million dollars in your business, and because of my investment you are able to expand your business, hire more people, and serve more customers; and a year after my investment your business is now worth an additional 5 million dollars as a direct result of my investment, where did that additional 4 million dollars come from; thin air? No it was generated.

The money came from customers who bought your product or service. The only money "generated" that doesn't come from someone else is either made by the US Mint or a counterfeiter.

So, if a company sells a product to the working or middle class and keeps the profits, the money travels up and stays there. If, on the other hand, the money is used to create jobs, then some goes up while some goes back out again. The latter is better for the economy.

S&P were the ones who mentioned the debt of over 11% as being a reason for the down grade, why don't you ask them?

I don't have to, they gave their reasons. And the percentage of GDP wasn't the sole reason. The major reason was, as I quoted before, "political brinksmanship."

It may not have been the only reason, but it was one of the reasons. They specifically mentioned the 11% debt as one of the reasons.

But not that alone. Without the political brinksmanship, it's doubtful there'd be any problem, or any need to lower our credit rating.

Yes! I agree.

Thanks!

That's it. He didn't raise income taxes at all, or any other taxes beyond those.

But he wanted to. The reason he has not been able to raise taxes as much as he would like is because the republicians kept him from doing it.

It doesn't matter whether he wanted to raise taxes or wanted a pony, the fact remains: he didn't get either one, so you can't claim he did.

How is it different?

How ISN'T it? Socialized medicine looks nothing like the ACA.

Under a socialized medicine system, the government owns and controls all health care facilities. In the US, health care facilities are privately owned, and patients pay for care through insurance they pay for, or get through their employer as a benefit.

The reason he talks a good game being a liberal is because that is what he believes. He is only president; it's not like he can go in there and do whatever he wants! He has other people he has to work with.

Let me ask you a question: if I told you that I was a duck, what would you say if I went moo, gave milk and then birthed a calf?

Talk is cheap, actions tell the real story. President Obama is about as liberal as George W. Bush.

-- A2SG, the only difference is Obama didn't start a war under false pretenses, but other than that, not much difference really....

 

[SolomonVII]

Not an either/or question. We can create jobs without damaging the environment irreparably, and making it impossible to live in it.

-- A2SG, it is possible, you know....

It is a question of priorities.
People's instincts are either toward cutting down the income gap through bringing jobs to America, or there priorities are for shutting down those jobs, and shipping off any potential environmental problems to China, along with the resulting jobs.

The income gap will not be closed as long as this trajectory is continued.
Sorry. Putting more people on government largess, or cutting off businesses from that largess, will do nothing to narrow that gap.
Real work, and real money is the only way.

Shovel ready jobs are possible, but six years later, it is not for lack of shovels that the infrastructure isn't being built. Even after the studies are done, and even after the recommendations are made, even after the green light; even when the mode of transport becomes the less safe, and less environmentally friendly rail transport of oil, the priorities are not with actually freeing up the blue collar jobs. Lip service is all that we can expect. 6 years turn into 12,16....
Dung beetles have the higher priority over blue collar jobs that will get men working again. Without work, it is not possible to close the income gap. Saying it is possible does not mean that it is.

 

[A2SG]

It is a question of priorities.
People's instincts are either toward cutting down the income gap through bringing jobs to America, or there priorities are for shutting down those jobs, and shipping off any potential environmental problems to China, along with the resulting jobs.

Or something else. There are other possibilities, such as jobs that don't run the risk of potential environmental disaster. Say, fixing old bridges or improving roads. Just a couple of suggestions.

The income gap will not be closed as long as this trajectory is continued.

I agree we need more manufacturing jobs in the US. I favor prohibitive tariffs on US companies who outsource manufacturing to other countries for sale in the US. If these companies want to hire third world workers at slave wages, let them pay for the privilege and level the playing field for American companies who hire American workers.

Sorry. Putting more people on government largess, or cutting off businesses from that largess, will do nothing to narrow that gap.
Real work, and real money is the only way.

If the private sector isn't hiring, then the public sector should. If we paid for more necessary work, like infrastructure or civic improvements, it would not only benefit everyone, but it would put more Americans to work. Even if the government is paying, they pay with real money and those they hire do real work.

Shovel ready jobs are possible, but six years later, it is not for lack of shovels that the infrastructure isn't being built. Even after the studies are done, and even after the recommendations are made, even after the green light; even when the mode of transport becomes the less safe, and less environmentally friendly rail transport of oil, the priorities are not with actually freeing up the blue collar jobs. Lip service is all that we can expect. 6 years turn into 12,16....
Dung beetles have the higher priority over blue collar jobs that will get men working again. Without work, it is not possible to close the income gap. Saying it is possible does not mean that it is.

I wholeheartedly agree we should have, and need to, do a better job in this area.

-- A2SG, we did it once before, in the 1930s, we can do it again....

 

[Ken-1122]

It also means less money to pay bills, which don't necessarily go down along with the price of cheap manufactured goods.

Not with 2 incomes it doesn't; remember the average household has more than one income now; which means more money which is good for the economy.

Who said things were bleak? People can be affected by the recession and not be homeless, you know.

I didn't say anything about homeless, I am saying the fact that everybody is paying for luxuries they didn't pay for yesteryear (like cell phones and better television service) is an indication they have more money to spend which is good for the economy.

You got facts to back that up?

Simple math. Unemployment was around 3%-5% till the mid 1970's which just so happened to be around the time more women began to go to work. It climbed to a high of around 10% in the early to mid 1980's then it gradually began to decline till just before the current recession it got down to a low of around 4%. It is now around 6%. The unemployment rate is almost as low now as it was back when women usually didn't work. Logic and math tells me when you have nearly twice the percentage of people working and the unemployment is the same, that means there are a lot more jobs out there.
US Unemployment Rate by Year

It works out the same. See, the problem with most of the people having a smaller percentage of the economic pie is that there's less movement of money through the system, and the movement of money is what drives capitalism. Less movement is bad for the economy.

No, when the majority has a smaller percentage of the economic pie, the only thing that means is that the majority moves a smaller percentage of the money through the system. Rich people move their money through the system too ya know!

I told you, increased consumer demand. If more people have more money to spend, that clearly means there's a market for the things they buy.

But if people don't have the jobs first, there will be no increase in consumer demand! So again; where do all those jobs come from? Thin air???

Not if that money doesn't create a lot of jobs. And, let's not forget, corporate profits are higher than ever, while wages and jobs aren't. Clearly, it's not working nearly as well as it's supposed to.

But it does create jobs. When a company expands, it creates more jobs. Investing in companies creates jobs.

Depends. Utilities and services need people to provide those services, maintain them, sell them, bill them, etc.

Jobs are jobs. We need all of them, corporations as well as utilities and other service providers.

Again, when you invest large sums of money in a company, that does more to help the company expand and create more jobs than simply being a loyal customer to the company.

The money came from customers who bought your product or service. The only money "generated" that doesn't come from someone else is either made by the US Mint or a counterfeiter.

Appearantly you misunderstood me. I said the company is now worth an additional $4 million dollars. I didni't say anything about selling the company to collect the additional money; so I ask again; where did the additional $4 million come from?

So, if a company sells a product to the working or middle class and keeps the profits, the money travels up and stays there.

If the company has employees, some of the money goes to them as well.

If, on the other hand, the money is used to create jobs, then some goes up while some goes back out again. The latter is better for the economy.

Never in the history of this country has a company sold a product to create jobs. It didn't happen in the past, it doesn't happen now, and it will not happen in the future; so you might as well get that idea out of your head cause it ain't happenin'
The only reason a company creates and sells a product is to make money for the owner. Weather it be 1 person who ownes the company, or a million shareholders who own it; it's sole purpose is to make money for the owners.

I don't have to, they gave their reasons. And the percentage of GDP wasn't the sole reason. The major reason was, as I quoted before, "political brinksmanship."

The reasons they gave was because of the 11% debt and political brinksmenship. The brinksmanship was the result of political reaction to the debt. It all boils down to the debt

 

[A2SG]

Not with 2 incomes it doesn't; remember the average household has more than one income now; which means more money which is good for the economy.

More money than one income, perhaps; but less money overall. Wages are down, let's not forget, so both incomes combined are now needed where one income used to suffice.

I didn't say anything about homeless, I am saying the fact that everybody is paying for luxuries they didn't pay for yesteryear (like cell phones and better television service) is an indication they have more money to spend which is good for the economy.

No, it isn't. 1. those things are cheap because they're all manufactured in third world nations with cheap labor and 2. they have to be cheaper because working class people have less money to spend than they did 30-40 years ago. Working class people in the 1970s may not have had cell phones, but they did buy TV sets (more expensive, comparatively, than they are today) radios and such, all of which took a bigger bite out of their paycheck than comparable items do today. And still, their paychecks went further than today's paychecks do.

Another reason why this cycle isn't good for the economy is debt. Working people accumulate debt today on a level the 1960s-1970s counterparts wouldn't have imagined. A car loan or mortgage was the limit of most families debt back then, credit cards were virtually unheard of.

It all adds up.

Simple math. Unemployment was around 3%-5% till the mid 1970's which just so happened to be around the time more women began to go to work. It climbed to a high of around 10% in the early to mid 1980's then it gradually began to decline till just before the current recession it got down to a low of around 4%. It is now around 6%. The unemployment rate is almost as low now as it was back when women usually didn't work. Logic and math tells me when you have nearly twice the percentage of people working and the unemployment is the same, that means there are a lot more jobs out there.
US Unemployment Rate by Year

The unemployment rate doesn't indicate how many jobs exist.

No, when the majority has a smaller percentage of the economic pie, the only thing that means is that the majority moves a smaller percentage of the money through the system. Rich people move their money through the system too ya know!

Yup. But not as much as working class people do. Mostly because there are far, far more of them around to do it. Also, spending habits need to be considered, as middle and working class people tend to spend more of their income (bills, stuff, etc.) while the rich tend to use it to accumulate wealth. Thus, money in middle/working class hands moves around more, money in rich hands tends to stay there. So less money means less movement.

Which is bad for the economy.

But if people don't have the jobs first, there will be no increase in consumer demand! So again; where do all those jobs come from? Thin air???

Again, putting more money in the hands of working class people so they can use it to spend, pay bills, etc. I've suggested a few ways to do this, including government investment in infrastructure and civic improvements, high, prohibitive tariffs on US companies that manufacture overseas for sale here, etc.

But it does create jobs. When a company expands, it creates more jobs. Investing in companies creates jobs.

It's supposed to work that way, but these days, not so much. Corporate profits are way up, but jobs aren't.

Again, when you invest large sums of money in a company, that does more to help the company expand and create more jobs than simply being a loyal customer to the company.

Sure, in theory. But the reality is, today, the profits are up, but the jobs simply aren't appearing much at all. Not anywhere near commensurate with profits.

So it's not working like it's supposed to.

Appearantly you misunderstood me. I said the company is now worth an additional $4 million dollars. I didni't say anything about selling the company to collect the additional money; so I ask again; where did the additional $4 million come from?

Until the company is sold, it only exists on paper. It's like, I can say my car is worth $3 million dollars, but until someone agrees to pay it, that worth is purely theoretical.

Say, do you have a spare $3 million to spend on a used 2008 Ford Fusion?

If the company has employees, some of the money goes to them as well.

Sure. But less these days (wages are down) and to less people (jobs are down).

So, overall, less. Meanwhile, profits are through the roof.

Never in the history of this country has a company sold a product to create jobs. It didn't happen in the past, it doesn't happen now, and it will not happen in the future; so you might as well get that idea out of your head cause it ain't happenin'

And yet, unless you sell every product by yourself, you probably hire people to run your store and sell your product for you. So selling products does create jobs, and not quite by accident.

The only reason a company creates and sells a product is to make money for the owner. Weather it be 1 person who ownes the company, or a million shareholders who own it; it's sole purpose is to make money for the owners.

Yup, no question. But, unless that owner plans to make and sell every single product by himself, he'll need help. That's where jobs come from, the need to make more products and sell more of them than you can do all by yourself.

As I've pointed out in the past, Ray Kroc himself didn't cook every one of those billions of hamburgers he sold.

The reasons they gave was because of the 11% debt and political brinksmenship. The brinksmanship was the result of political reaction to the debt. It all boils down to the debt

Nope, because the debt alone didn't cause S&P to downgrade our credit rating. The GOP playing games with the debt ceiling did.

But let's check. This page lists S&P's credit ratings with debt to GDP ratios of various nations. Look at the US, the ration was 99.5 in 2011 when S&P downgraded our credit rating. Turkey, by comparison, had a ratio of 39.4 with a positive outlook, and their credit rating is below ours.

Obviously, S&P doesn't consider ratio to GDP as the sole arbiter of what credit rating a nation has.

-- A2SG, also, they cited "political brinksmanship" as a large part of the reason, so let's take their word for it, shall we?

 

[Ken-1122]

More money than one income, perhaps; but less money overall.

What are you talking about? How is 2 incomes more money than 1 income but less money overall? Please explain.

No, it isn't. 1. those things are cheap because they're all manufactured in third world nations with cheap labor and 2. they have to be cheaper because working class people have less money to spend than they did 30-40 years ago.

$200 per month just to watch TV is not cheap! Especially when it used to be free. $100 per month for cell phone service is not cheap especially when every member of the family has to have their own. These things are expensive and the middle income and the poor are buying them because they can afford them; something they didn't do years ago.

Working class people in the 1970s may not have had cell phones, but they did buy TV sets (more expensive, comparatively, than they are today) radios and such, all of which took a bigger bite out of their paycheck than comparable items do today. And still, their paychecks went further than today's paychecks do.

That's just another example of being able to buy more today with less money than yesterday. We already discussed that.

Another reason why this cycle isn't good for the economy is debt. Working people accumulate debt today on a level the 1960s-1970s counterparts wouldn't have imagined. A car loan or mortgage was the limit of most families debt back then, credit cards were virtually unheard of.

Didn't you say the more money moving around the better it is for the economy? Well more money is being moved.

The unemployment rate doesn't indicate how many jobs exist.

But it shows how many people are looking for work. Currently you have twice the people who want jobs yet the unemployment rate is the same. That tells me there are more people employed out there.

Yup. But not as much as working class people do. Mostly because there are far, far more of them around to do it.

How does the number of people spending money make a difference? Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain

Also, spending habits need to be considered, as middle and working class people tend to spend more of their income (bills, stuff, etc.) while the rich tend to use it to accumulate wealth.

So what does the rich spend their money on to accumulate wealth?

Thus, money in middle/working class hands moves around more, money in rich hands tends to stay there.

Explain how the money the rich spend stays in rich hands but the money the middle class spends somehow stays out of rich hands. Please explain

Again, putting more money in the hands of working class people so they can use it to spend, pay bills, etc. I've suggested a few ways to do this, including government investment in infrastructure and civic improvements,

We just gave the government a trillion dollar stimulus package to do this and they wasted it! Now you want to give them more?

It's supposed to work that way, but these days, not so much. Corporate profits are way up, but jobs aren't.

I've already explained how there are more jobs out there than ever before, we just a higher percentage of the population working. But if you expect corporations to work like "clockwork", nothing works like clockwork especially the government but for some reason you seem to trust them with your money.

Until the company is sold, it only exists on paper. It's like, I can say my car is worth $3 million dollars, but until someone agrees to pay it, that worth is purely theoretical.

Did the government apraise your car and say because it is worth $3 million dollars you now have to pay taxes on your car at the tax rate of $3 million dollars? If not your argument fails
When you increase the value of your property, you don't need to sell it in order for it to be worth more; an apraisal is all you need.

Again I ask; where did the additional $4 million come from?

Say, do you have a spare $3 million to spend on a used 2008 Ford Fusion?

Get it appraised first then we will talk.

And yet, unless you sell every product by yourself, you probably hire people to run your store and sell your product for you. So selling products does create jobs, and not quite by accident.
Yup, no question. But, unless that owner plans to make and sell every single product by himself, he'll need help. That's where jobs come from, the need to make more products and sell more of them than you can do all by yourself.

As I've pointed out in the past, Ray Kroc himself didn't cook every one of those billions of hamburgers he sold.

Creating jobs is a "side affect" of starting and running a business; not the incentive.

Nope, because the debt alone didn't cause S&P to downgrade our credit rating.

I never said it was the only reason

The GOP playing games with the debt ceiling did.

And what was the reason the GOP gave for playing games with the debt ceiling? (hint: the debt)

Ken

 

[JoyJuice]

What are you talking about? How is 2 incomes more money than 1 income but less money overall? Please explain.


$200 per month just to watch TV is not cheap! Especially when it used to be free. $100 per month for cell phone service is not cheap especially when every member of the family has to have their own. These things are expensive and the middle income and the poor are buying them because they can afford them; something they didn't do years ago.


That's just another example of being able to buy more today with less money than yesterday. We already discussed that.


Didn't you say the more money moving around the better it is for the economy? Well more money is being moved.


But it shows how many people are looking for work. Currently you have twice the people who want jobs yet the unemployment rate is the same. That tells me there are more people employed out there.

How does the number of people spending money make a difference? Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain

So what does the rich spend their money on to accumulate wealth?

Explain how the money the rich spend stays in rich hands but the money the middle class spends somehow stays out of rich hands. Please explain


We just gave the government a trillion dollar stimulus package to do this and they wasted it! Now you want to give them more?

I've already explained how there are more jobs out there than ever before, we just a higher percentage of the population working. But if you expect corporations to work like "clockwork", nothing works like clockwork especially the government but for some reason you seem to trust them with your money.

Did the government apraise your car and say because it is worth $3 million dollars you now have to pay taxes on your car at the tax rate of $3 million dollars? If not your argument fails
When you increase the value of your property, you don't need to sell it in order for it to be worth more; an apraisal is all you need.

Again I ask; where did the additional $4 million come from?


Get it appraised first then we will talk.


Creating jobs is a "side affect" of starting and running a business; not the incentive.


I never said it was the only reason

And what was the reason the GOP gave for playing games with the debt ceiling? (hint: the debt)
"How does the number of people spending money make a difference? Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain"


Ken

Hi Ken, I found this question interesting and would like to take a stab at it.

"How does the number of people spending money make a difference? Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain"


I think if a million people had a billion dollars it would have more a a mulitplier effect in economic growth. When one person spends a billion dollars, they aren't going to spend that money the number of times it would take to exhaust that billion. Moreover, the millon people would tend to spread that billon in many more facets of businessess then the one person spending a billion.

I hope that made sense.

 

[Ken-1122]

Hi Ken, I found this question interesting and would like to take a stab at it.

"How does the number of people spending money make a difference? Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain"


I think if a million people had a billion dollars it would have more a a mulitplier effect in economic growth. When one person spends a billion dollars, they aren't going to spend that money the number of times it would take to exhaust that billion. Moreover, the millon people would tend to spread that billon in many more facets of businessess then the one person spending a billion.

I hope that made sense.

If over a 1 year period, a million middle income and poor people spent a billion dollars; how do you think they would spend it?
If over a 1 year period, 1 person spent a billion dollars, how do you think he would spend it?

Ken

 

[A2SG]

What are you talking about? How is 2 incomes more money than 1 income but less money overall? Please explain.

I already did, over and over again.

WAGES ARE DOWN!!

The average working class job pays less today, comparatively, than it did 30 so years ago. Which means a paycheck doesn't go as far as it used to. Which means two incomes are needed where one used to suffice.

$200 per month just to watch TV is not cheap! Especially when it used to be free. $100 per month for cell phone service is not cheap especially when every member of the family has to have their own. These things are expensive and the middle income and the poor are buying them because they can afford them; something they didn't do years ago.

1. Imagine all that expense on less pay, comparatively, than a generation ago. 2. Much of that cost is aided by credit cards, and credit card debt. All of which adds up to less money for the middle class to move around, which is bad for the economy. Exactly as I've been saying all along.

That's just another example of being able to buy more today with less money than yesterday. We already discussed that.

Which means less money moving around overall, which is, again, bad for the economy.

Didn't you say the more money moving around the better it is for the economy? Well more money is being moved.

Not when that debt results in default and bankruptcy. Which happens more and more often these days.

But it shows how many people are looking for work. Currently you have twice the people who want jobs yet the unemployment rate is the same. That tells me there are more people employed out there.

Nope. You can't guess and assume that job growth is good based on unemployment figures alone.

Check this out:

Job growth peaked in the 90s, and has been down ever since. There was some growth just after the recession hit, but not anywhere near previous levels. And the trend is going down.

Why aren't unemployment figures worse, you ask? Partly because many of the jobs out there pay less than they used to, and quite a few of them are part time (75% of new jobs in some areas) so people are employed, but not enough to make ends meet.

How does the number of people spending money make a difference?

Because the economy is healthier when more money is moving around, less healthy with less movement.

Capitalism 101.

Example; How is a million people spending a total of a billion dollars better for the economy than just one person spending a billion dollars? Please explain

Depends on what he's spending that money on. If he's spending it on employee salary, for example, that money moves around the system, making it better for the economy overall. If, say, he spends it on a single yacht, well, there's less money movement. If he puts it into a corporation that, in turn, uses it to pay a billion dollar bonus to the CEO, again, less movement.

So what does the rich spend their money on to accumulate wealth?

Property, expensive things like cars, art, stuff like that I guess.

Explain how the money the rich spend stays in rich hands but the money the middle class spends somehow stays out of rich hands. Please explain

It doesn't stay out of rich hands.

Look, it's not that hard to understand: if a billionaire invests, say, a million dollars in a corporation, and that corporation in turn pays a million dollar bonus to its already rich CEO, that money stays with the rich.

When the middle class gets paid, they pay bills and buy stuff; if the places that provide those services or things are owned by rich people, they get a cut, and the rest goes to paying employees of the companies that provide those services and things, etc.

Sure, some of the money the rich invest moves around the same way, but a lot of it doesn't. This is proven by the fact that corporate profits are through the roof, but jobs and wages are not.

None of this is news, I've been saying it for weeks now.

We just gave the government a trillion dollar stimulus package to do this and they wasted it! Now you want to give them more?

No, I want them to do a better job with the money, and not waste it!

Thing is, we need the government to employ people, because the private sector isn't doing enough of it. And the things I describe, infrastructure improvements and the like, are necessary and need to be done. The private sector won't do it, the public sector HAS to.

I've already explained how there are more jobs out there than ever before,

You didn't explain, you assumed. I have provided facts that say otherwise.

we just a higher percentage of the population working. But if you expect corporations to work like "clockwork", nothing works like clockwork especially the government but for some reason you seem to trust them with your money.

I don't trust them, I fully believe in oversight. We, the people need to do a better job policing the elected officials who work for us. But too many people are either too lazy to do it, or are reaping the rewards because of those who are.

Did the government apraise your car and say because it is worth $3 million dollars you now have to pay taxes on your car at the tax rate of $3 million dollars? If not your argument fails

No, because in both cases, there is no actual $3 million dollars. It only exists on paper.

When you increase the value of your property, you don't need to sell it in order for it to be worth more; an apraisal is all you need.

But you don't have the actual cash, do you? And, if no one wants to buy it for that price, appraisal or not, you still don't have it.

Again I ask; where did the additional $4 million come from?

It's still just a number on paper.

Get it appraised first then we will talk.

My friend Jonah just appraised it for $4 million! Price is going up, better buy it quick!

Creating jobs is a "side affect" of starting and running a business; not the incentive.

So? The economy don't care why someone starts a business and hires people, it improves regardless if enough people do it and pay their employees enough.

I never said it was the only reason

You dismissed the main stated reason, political brinksmanship, in favor of only that criteria.

And what was the reason the GOP gave for playing games with the debt ceiling? (hint: the debt)

Nope. Politics. I highly doubt the GOP cares one whit about the debt, they sure didn't care during the Bush administration. It's an excuse to win political points off President Obama, nothing more or less.

-- A2SG, and those political games are why S&P considered the US more of a financial risk than it used to be.....

 

[JoyJuice]

If over a 1 year period, a million middle income and poor people spent a billion dollars; how do you think they would spend it?
If over a 1 year period, 1 person spent a billion dollars, how do you think he would spend it?

Ken

If you're talking spending trends, then this is not discretionary income for the 1 million people. They would spend it on daily survivial essentials. For the millionaire it probably isn't. If an millionaire had a billion to spend, then just by trend a lot of that would be invested and have really no multiplier effect.

 

[Ken-1122]

I already did, over and over again.

WAGES ARE DOWN!!

The average working class job pays less today, comparatively, than it did 30 so years ago. Which means a paycheck doesn't go as far as it used to.

It does when you have 2 paychecks instead of one!

1. Imagine all that expense on less pay, comparatively, than a generation ago. 2. Much of that cost is aided by credit cards, and credit card debt. All of which adds up to less money for the middle class to move around, which is bad for the economy. Exactly as I've been saying all along.

1. With 2 paychecks it is more pay; and if they couldn't afford it they wouldn't be buying it.
2. How does buying more stuff add up to less money moving around? You've got it backwards my friend!

Which means less money moving around overall, which is, again, bad for the economy.

No, being able to buy more with less money means the money is more valuable. That is good for the economy.

Not when that debt results in default and bankruptcy. Which happens more and more often these days.

Actually bankruptcies and defaulting on loans are going down because of stricter standards than just a few years ago.

Nope. You can't guess and assume that job growth is good based on unemployment figures alone.

Check this out:

Job growth peaked in the 90s, and has been down ever since. There was some growth just after the recession hit, but not anywhere near previous levels. And the trend is going down.

I was talking about the number of jobs that exist; comparing today with the 1960's and 1970's. Your chart starts in 1990.

Because the economy is healthier when more money is moving around, less healthy with less movement.

You misunderstood me. I said why does the number of PEOPLE spending money make a difference if the same amount of money is spent?

Depends on what he's spending that money on. If he's spending it on employee salary, for example, that money moves around the system, making it better for the economy overall. If, say, he spends it on a single yacht, well, there's less money movement. If he puts it into a corporation that, in turn, uses it to pay a billion dollar bonus to the CEO, again, less movement.

Well since nobody has ever spent a billion dollars on a single Yacht, and a CEO has never gotten a billion dollar bonus, sounds to me like you are admitting the money is spent on employees salery and moves the money around the system; am I understanding you correctly?

Property, expensive things like cars, art, stuff like that I guess.

maybe that's our problem, you don't know what rich people spend their money on. Bill Gates drives an Audi, Warren Buffet drives a Cadillac; some of the richest people don't feel a need to burn their money, they invest it which is good for the economy.

It doesn't stay out of rich hands.

Look, it's not that hard to understand: if a billionaire invests, say, a million dollars in a corporation, and that corporation in turn pays a million dollar bonus to its already rich CEO, that money stays with the rich.

When the middle class gets paid, they pay bills and buy stuff; if the places that provide those services or things are owned by rich people, they get a cut, and the rest goes to paying employees of the companies that provide those services and things, etc.

Are you kidding me??? Do you seriously believe companies separate the money rich people spend from the money the poor spend and spend the pools differently? Are you jokin' or jus making stuff up as you go along.... Okay squash that; let's assume you are correct with your claims; and the money is kept separate. how do you know the money the poor people spend isn't going to the rich CEO bonus and the money the rich spend isn't going to research and development, payroll, and expanding the business to create more jobs?

No, I want them to do a better job with the money, and not waste it!

You would have more luck trying to sell your Ford Focus for $4 million dollars.

I don't trust them, I fully believe in oversight. We, the people need to do a better job policing the elected officials who work for us.

I agree! That's why I say until we the people do a better job policing, we should quit throwing money at the government expecting it to fix the problems

No, because in both cases, there is no actual $3 million dollars. It only exists on paper.
But you don't have the actual cash, do you? And, if no one wants to buy it for that price, appraisal or not, you still don't have it.

Do you really think Bill Gates has $80 billion in a bank somewhere? Few rich of the rich carry a lot of cash on themselves; that's why I used the term "creating wealth" instead of "creating US currency"

It's still just a number on paper.

Using your logic, all those rich CEO's never even got a bonus, all they got was a bunch of numbers on paper; so what are you complaining about?

My friend Jonah just appraised it for $4 million! Price is going up, better buy it quick!

I will buy it when the Government quits wasting our money. (I wouldn't hold my breath if I were you)

So? The economy don't care why someone starts a business and hires people, it improves regardless if enough people do it and pay their employees enough.

My point was, people start busines to make money; not to create jobs.

 

[Ken-1122]

If you're talking spending trends, then this is not discretionary income for the 1 million people. They would spend it on daily survivial essentials. For the millionaire it probably isn't. If an millionaire had a billion to spend, then just by trend a lot of that would be invested and have really no multiplier effect.

What do you mean by "multiplier effect"?

Ken