unemployment 8.3%Follow

Edit: Damn it Locke. That'll teach me not to check recent posts first.

Edited, Dec 7th 2012 9:42am by BrownDuck

You'd think they like this? Less people who are classified as unemployed = less unemployment benefits doled out = smaller government!
(Am I doing this right?)

Damned anchor babies!

Can I play too?

So their own internal tests of running on sub 30 hour a week part timers showed that the overhead involved with shaving off those 10 hours from each person wasn't worth the actual savings from not having to insure the individuals.

Meaning: Full timers with health insurance are more likely to stick with their schedule and come in to work when expected, be happy to come to work (as they're more likely to not be worried about paying rent when they're working 40 hours guaranteed), and have less to hate about their job and their life in general. Additionally, for every three full time employees you drop down to 30 hours a week, you have to hire a 4th person to cover those hours, and pay all the associated payroll taxes that come with having a 33% greater workforce in numbers, even if you don't have to provide health insurance for them.

Edited, Dec 7th 2012 3:21pm by catwho

Umm...




You're trying way way way too hard.

Edited, Dec 7th 2012 3:11pm by gbaji

Wait. I see you! No fooling me (much)!


Seriously though, we should be creating 250k jobs a month just to break even in normal economic times. During a "recovery" we should be generating 300-400k jobs per month. This should have started happening back in 2010, but hasn't. We can debate and argue about why the economy acted more like a lead weight hitting the economic floor rather than a basketball (ie: no bounce back), but that is what happened. Jumping on any glimmer of economic good news in a fog of bad is just avoiding the main issue. The economy is not recovering, not because the government isn't spending enough money, but because the private markets are not spending enough money (on the right things) to make it happen.

As long as the Dems continue to pursue higher taxes as the means to increase revenue, we will continue to have poor job creation rates and poor economic outcomes. We've made the floor of the recession the new normal. That's not good at all.

But Clinton was riding on the awesomeness that was Bush Sr. and shafted Bush Jr with his poor democratic choices. The only reason things aren't getting better for Obama is because he screwed over the economy so badly that it will effect him and the next president (if said president is republican and has a poor economic record).

After all, it's so obvious!

"kanipshin"?

So you're arguing we should raise taxes on everyone, not just the top 2%? I'm just curious because everyone talks about the Clinton tax rates and how they must have been a key cause of the great economy we had back in the 90s, but then they insist that they only want to raise taxes on one group of people. It's an interesting bit of self delusion that goes on here. If you truly believed that it was the Clinton tax rates that created economic prosperity in the 90s, then you'd be arguing for the full set of Clinton tax rates to be re-established. But I'm assuming that if someone asked if you wanted on increase taxes on the working class by half again, you'd say "Of course not! We're just trying to make the rich pay their fair share".


Which is why your claimed reason is clearly just BS. You've accepted the idea that somehow by just taxing "the rich" more it'll create economic prosperity. But since there's no actual evidence of this, you are willing to kinda ignore all the other tax rate differences between today and when Clinton was in office. Not because it's an honest way of assessing things, but because it would be inconvenient with regard to implementing something you believe should be implemented.

Of course, that begs the question of why you think we should raise taxes on the top 2% in the first place, but that's a whole other set of self delusion and denial.

Mildly amusing, don't know about interesting though.

Follow the logic though. How does demand increase job creation? Assuming you mean demand for products and services provided by working people, then that demand will only result in increased job creation if the resulting profits from the employer fulfilling that demand is greater if he hires more people than if he doesn't. It's an easy concept to test. If a million people demand $5 widgets, but the cost to build a widget (which includes labor cost) is $6, that demand will never be met. Demand only results in increased product creation (and the labor to do so) if meeting the demand results in more profit for the employer. If there's demand for 500,000 widgets at $10, then the employer will hire enough people to fill that demand, making a $4/widget profit. Since that will generate $2M in total profit, while meeting the 1 million unit demand would result in a loss of $1M, he's going to employ enough to build 500k instead of 1M. Simple economic theory at this point, right?

Now, while you can correctly argue that tax rate changes wont affect hiring decisions with regard to widget production, it *will* affect external choices like whether to invest in a widget factory or a business generating intellectual property, or in commodities, or bonds, or even foreign markets. Imagine you are the owner of that widget factory. Let's imagine that you're currently building 500k widgets a year, but think that the demand has increased for widgets and you could now sell 1M units at $8 per widget. That's not a good choice because your current costs are $6/widget, so you make the same profit of $2M whether you sell 500k at $10 ($4/widget profit) or 1M at $8 ($2/widget profit). But what if, as you suggest, demand just straight up increases? What if now there's demand for 700k widgets at $10/widget? Hmmmm... But you currently only employ enough to product 500k. You'd need to hire more workers. You'd also need to expand your factory to meet this new demand. Here's the problem. It'll cost you $4M dollars to build the new facilities. This means that the increased $400k per year in profit from the increased demand will pay you back in 10 years. After that, you're golden. So that's a possible choice. But what if you could just toss that $4M into some other investment that'll earn you some interest rate back each year. Let's also imagine that you're not sure how much labor costs may increase over the next 10 years. You might not want to commit to a venture that will require that long to get a return. It's not as simple as assuming that increased demand will always result in increased jobs. It only creates the potential for increased jobs. That potential has to be filled, and the choice to fill it is absolutely based on relative profits. And guess what? Tax rates absolutely can affect those choices.


There's also a more direct way it affects job creation. I've mentioned this in the past, but I'll repeat it here. There's also a matter of the rate at which a business can grow in the first place. Let's assume that in the last example, the factors are such that the widget factory owner does decide to spend $4M in profits to fill that increased demand (and hire more people). But he has to have $4M to spend. Assuming his $2M profit rate, it should take him 2 years to save up the money, right (24 months)? But if he's paying a 30% tax rate, then he only actually has $1.4M in profit each year. Thus, it'll take him 34 months to save up the money. Similarly, if we raise his taxes to $50, it'll take him 48 months to save up enough to expand his business and hire those employees.

Thus, assuming that employers don't normally have idle money sitting around doing nothing at all, the rate at which they can create new jobs to meet new demand for their products is directly affected by the tax rate on past and present profits. It's in direct relation. Tax half the profit, and it'll take twice as long to hire X number of workers as if you didn't tax at all. Tax rates directly affects the amount of profit retained, thus it directly affects the rate at which those profits can be spent expanding the business and hiring new workers. Obviously, this is a simplification of the process (cause we have things like loans), but future profits after tax affects the rate at which a business can pay back those loans. No matter how we manipulate the dollars, the tax rate on profits ends out directly affecting the rate at which anything can be done with those profits. Assuming some ratio of profits to job creation, it will therefore directly affect job creation.


Demand affects the potential for labor creation. But profits off past (and future) labor affects how quickly the economy actually reacts to that demand. That's particularly relevant right now where businesses aren't sure what their future profits will be from labor, thus are hesitant to invest in ventures which may require many years to earn a return off said labor. They're much more likely to put that money somewhere where they can earn some profit right now and is flexible enough that they can shift that money somewhere else later if they need to. Once you've spent the money on a new widget factory, you're kinda stuck with hiring enough people to make enough widgets to earn back the money you spent. And if something happens to upset your apple cart, you may go out of business as a result of that choice. You can't just move the money you spent somewhere else. You're stuck.