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There are a few rules of thumb to keep in mind. First, you can't create a new business, or sustain an existing one, without the seed corn and nourishment of capital investment. Secondly, only businesses create jobs. You can't have a job without a business.
Third, jobs create all incomes, including middle-class incomes. Lastly, incomes create family and consumer spending. Got all that?
This is not complicated. It's common economic sense, but University of Chicago economist Casey Mulligan states this in a simpler way: Growth starts with investment and ends with consumer spending.
Its too bad the left doesn't get this.
even further
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Ironically, history shows that lower capital-gains tax rates produce higher revenue. Think Bill Clinton and George W. Bush. But a higher capital-gains tax produces lower revenue. Think late-Reagan, Bush Sr., and now Obama.
and the only reason Clinton did it was because of a republican controlled congress.
The reason for this is as soon as they begin to understand real world economics, they stop being a lefty.
I've been posting the same economic principles for how many years here, and they still tell tell us how wonderful the Obama stimulus bill is, or how great ACA is because it insures every american free,..
Of course not only are both of these ridiculous at their face, the fact that anyone actually believes it is an embarrassment to the nation.
Look at how many of them believe we can just increase taxes on "the wealthy"...
I don't think you understand. The left-wing politicians are probably pretty well aware of this. They know better even if they feign ignorance. The reason they still claim to believe these things is because they are trying to mask their actual real end goal: more government control.
These are typically people who either work for the state or seek a position of power/control within the state. They know that if the private sector fails then they can use it as a pretext to expand government control over the economy. This is the REAL reason for why the left supports dumb economical practices. They actually want the private sector to go down in flames, because then they can claim that it proves capitalism is a failure and that the state should take over.
Now of course, your typical every day casual lefty probably actually believes left-leaning economics to work, but the actual left-wing politicians and the left's hardcore support base within the state probably knows better even if they act like they don't.
I think that there is probably a mix of true believers who just don't know any better, and disingenuous opportunists who know better but just can't admit it out loud.
Remember the saga of George McGovern. He was a history prof and US Senator who believed in all the usual lefty mantras, but after retirement from politics decided to pursue a longtime dream of opening his own hotel. He sunk a decade's worth of post-Senate speaking fees into the project which survived 2.5 years before it succumbed to a combination of litigation and regulation. What I Know Now: Nibbled to Death, | Inc.com
McGovern was an example of a lefty who genuinely believed, but changed his mind after a dose of reality.
Yes, that liberal . . . .Nobel Prize winner in economics. What's that? Anybody can win Nobel Prize, look at Obama with his Peace prize?! Krugman was also named the second most influential economist in the world by The Economist.
A summa cu m laude graduate of Yale and Ph.D. from MIT. A professor at Princeton. He's got more street cred than anyone you will quote as expert economists.
A May, 2011 Hamilton College analysis of 26 politicians, journalists, and media commentators who made predictions in major newspaper columns or television news shows from September 2007 to December 2008 found that Krugman was the most accurate. Only nine of the prognosticators predicted more accurately than chance, two were significantly less accurate, and the remaining 14 were no better or worse than a coin flip. Krugman was correct in 15 out of 17 predictions, compared to 9 out of 11 for the next most accurate media figure, Maureen Dowd.
Foreign Policy named Krugman one of its 2012 FP Top 100 Global Thinkers "for wielding his acid pen against austerity".
Everyone knows that only one side can be right 100% of the time. Sheesh, that Obama trying stuff and making an effort. He should just give up and go back to his socialist enclave and plot the destruction of the country from afar. Plus he's Muslim.
Besides, as noted above. Krugman is the only economist you have to listen to. The only right one, and look at those accomplishments! You righties need to slink back to your KKK meeting and let your betters run the country.
Actually, I think left wing politicians do get this. I don't think they are ignorant. They just know that real economics will not get them votes. So they talk about government growth and government spending. That WILL get them votes.
I think that there is probably a mix of true believers who just don't know any better, and disingenuous opportunists who know better but just can't admit it out loud.
Remember the saga of George McGovern. He was a history prof and US Senator who believed in all the usual lefty mantras, but after retirement from politics decided to pursue a longtime dream of opening his own hotel. He sunk a decade's worth of post-Senate speaking fees into the project which survived 2.5 years before it succumbed to a combination of litigation and regulation. What I Know Now: Nibbled to Death, | Inc.com
McGovern was an example of a lefty who genuinely believed, but changed his mind after a dose of reality.
That McGovern article is great. Should be must read material for lessons learned.
Here are the main points but the entire article should be read since he goes into some real details.
1- I learned first of all that over the past 20 years America has become the most litigious society in the world. ... Yet lawsuits prompted by such events have spawned a multibillion-dollar industry -- one that drives up the costs of doing business and rendering medical care. Not to mention how it wars against a congenial and humane way of life.
2- The second lesson I learned by owning the Stratford Inn is that legislators and government regulators must more carefully consider the economic and management burdens we have been imposing on U.S. business. ... I'm for protecting the health and well-being of both workers and consumers. I'm for a clean environment and economic justice. But I'm convinced we can pursue those worthy goals and still cut down vastly on the incredible paperwork, the complicated tax forms, the number of minute regulations, and the seemingly endless reporting requirements that afflict American business. Many businesses, especially small independents such as the Stratford Inn, simply can't pass such costs on to their customers and remain competitive or profitable. ... I do know that if I were back in the U.S. Senate or in the White House, I would ask a lot of questions before I voted for any more burdens on the thousands of struggling businesses across the nation.
First capital/investment is necessary for growth, but that should be the last concern on the list now seeing as interest rates are at rock bottom. You can get capital through debt(loans) or equity(investment/stocks). And seeing as now is probably one of the easiest and best times ever to get a loan in the US, raising capital is an issue. Capital gains should be treated no differently than income, which means that they are by and large taxed too lightly.
Second, yes you can create jobs/businesses from government. Look at the military, CCC, Interstate highway crew.... At any time the government could expand in those areas and more REAL jobs and subcontractor businesses would be made. (Although you could say for the military, the additional productivity of one more soldier is very low, because they don't produce anything)
And lastly, if you think consumer spending is in trouble, the most effective way to increase it is a minimum wage. Are you in favor of that?
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