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Well, the problems with the first idea should be obvious. First of all, suddenly announcing that if you are unemployed you will get $3,000 a month from the US government creates all sorts of perverse incentives. Anyone making less than $3,000 a month is now actually better off by quitting their job - but of course, if that happens, then you either need to borrow much more than $15 billion or you need to offer a lot less than $3K per person. So, right out of the gate, you got a serious problem. Second, and perhaps equally important, theres then really no incentive for these people to get a job.
Third, how does this actually stimulate anything? When the $15B runs out, what has materially changed? All you've done is put $15B into the economy. Which I guess is the posters point, but the issues here are numerous - for starters, its highly unlikely that $15B will go towards "job producing" activities as the poster suggests (i.e. buying crap). Its much more likely some substantial portion of that $15B would go towards savings, paying down personal debt, home payments etc. Those are worthwhile things to be sure, but its a pretty shaky thought process to think that will somehow stimulate demand.
Then there's the problem of what happens when the $15B runs out - this supposed increase in demand stops - these unemployed folks who were spending $3,000 a month on crap (or more likely, werent) now suddenly aren't, and so you find yourself with shrinking demand, and increasing unemployment again.
I could go on but why bother
Instead of expanding my point to a thesis the length of a congressional bill to cover every contingency, I just chose 5-million as a rough target, and based the sum on $3,000 a month as an average expected income by recipients of the stimulus, all of whom would have been recently employed people being paid an amount proplortional to their expected and customary earnings. To a reasonable person, that would have been understood from the brevity of the OP.
Your criticism has little credibility, if you start out with the assumed interpretation that every single adult freeloader who has never had a job (or quits a low-pay job) would automatically receive $3,000 ($6,000 for a couple), and then zero in on that specificity to snipe at, instead of the broad philosophical and economic principle, which you are apparently unwilling to "bother" to think through, or try to comprehend in the first place.
Last edited by CowanStern; 06-11-2012 at 10:26 AM..
to mention employers do not rush out and hire more employees because they were busy/more customers/more profit for one week. There a considerable lag time from when an employer / company business picks up to when they actually hire someone. The cost of your program is going to be 180 billion dollars for the first year, to pay 5 million people, you be lucky to see any hiring results within 3 months of the start of your program.
It is true, there is no guarantee any of that spending would amount to any jobs. I would actually argue that most of the money would actually end up as corporate profits (like most of our current bloated government spending), while employers would just squeeze additional productivity out of existing workers, which is why Im more of a fan of plan B, which is sort of like happened in the depression with the public works programs. The government needs to directly hire workers, no middle men government contractors. The last time most of the federal infrastrure was updated was the 1950's any how, so Im sure there is plenty of work that needs to be done.
We can pay for this by raising taxes to levels they were during the depression as well.
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Originally Posted by TechGromit
Also I don't see the difference between your program and unemployment. If a worker gets laid off and goes on unemployment, they are spending the unemployment money they are receiving from the government you would think there spending would create jobs and allow them to get rehired somewhere else.
The unemployment money is significantly less than $3000 a month, and, is for a set duration of time.
Why not ask the people that you may know that are on unemployment. Ask what they would do with an extra $3,000. Do you think for one minute that they are going to head on over to the local store and buy made in America stuff with that money? How many of those people that have been doing without are going to do that? Very few. Lets say that they do go to the store and spend it on Made in America stuff. What would they buy? It is cheeper to buy made in China stuff. I also have no problem buying something made in China. Most of the stuff that is made there we don't make here anymore anyway. Besides when it comes down to a $300 flat screen at Wal-Mart that is made in China against a, well do they even make flat screens in the USA anymore or did they ever? Get my point. Oh wait you want to build factories here in the USA to sell them stuff. Can you compete on price? Guess what I will still be looking for a value and if you can't compete on price why should I buy from the USA made companies?
The market always fixes itself. That is how it has always been and how it will always be. We make lots of stuff here, but consumer goods are easier to make somewhere else. Why even spend time making a toaster or big screen TV? Let someone else make that and we will sell other things. Old school manufacturing is not where the money is. Even those American cars you are buying are not always made in the USA. To be made in America means just that, anywhere in North America. North America has a couple other countries attatched to it, one being Canada and the other being Mexico. The new Dodge Challenger is made in Canada, USA, and Mexico. Each nation produces a part of the car. If you are driving a Ford F150 their is a good chance it was built in Mexico, Still North America.
And don't tell me about how business fail. That is not the case. Business plans or better yet the lack of a plan, fail all the time. You can take any business idea and run it out on paper, developing a plan and figure out within a day or two if that business will fail or not. You could even be lucky like my friend Shaun. He owns a company called Neff Headwear and in a 10 year period has build the #3 youth segment outdoor sporting goods closeline in the nation.
Get my point. Oh wait you want to build factories here in the USA to sell them stuff. Can you compete on price? Guess what I will still be looking for a value and if you can't compete on price why should I buy from the USA made companies?
Which is why Im in favor of leveraging our extreme consumer demand, and enacting tariffs. So, if you want a flat screen TV, you can pay for one built in the USA, or you can pay more for one built in China, have fun with that.
If the businesses themselves dont like it, , they can sell their crap to Indonesian kids. I wonder how many $300 pair of shoes theyll push there.
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Originally Posted by SOON2BNSURPRISE
The market always fixes itself. That is how it has always been and how it will always be.
The market does not "always fix itself". That is proposterous, especially in cases when all the capital is highly concentrated in the hands of a few. Usually only revolutions "fix" that.
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Originally Posted by SOON2BNSURPRISE
And don't tell me about how business fail. That is not the case. Business plans or better yet the lack of a plan, fail all the time. You can take any business idea and run it out on paper, developing a plan and figure out within a day or two if that business will fail or not. You could even be lucky like my friend Shaun. He owns a company called Neff Headwear and in a 10 year period has build the #3 youth segment outdoor sporting goods closeline in the nation.
Wow, so, you can accurately tell consumer demand, which is the biggest variable in the success of any business, by making a business plan? Thats amazing. You should bottle that skill up, and go on a speaking tour. You could make millions.
Why not ask the people that you may know that are on unemployment. Ask what they would do with an extra $3,000.
It's not a single extra payment. It's a continuation of their usual paycheck, month after month. with some element of assured expectation, until there is sufficient demand for productivity that an employer rehires them.
It's not a single extra payment. It's a continuation of their usual paycheck, month after month. with some element of assured expectation, until there is sufficient demand for productivity that an employer rehires them.
The OP's plan was to offer people a single $3,000 payment to get the economy going. So what you are suggesting is to give the people $3,000 a month untill the economy is going? Where does all that money come from?
And don't tell me about how business fail. That is not the case. Business plans or better yet the lack of a plan, fail all the time. You can take any business idea and run it out on paper, developing a plan and figure out within a day or two if that business will fail or not. You could even be lucky like my friend Shaun. He owns a company called Neff Headwear and in a 10 year period has build the #3 youth segment outdoor sporting goods closeline in the nation.
Let me add to this, as I was interupted at work and could not continue. My friend Shaun who from the start had a plan to build his company into the #1 brand in his segment did expand part of his business without a plan. They decided to sell watches and before they could put a plan together for the watch side of the brand, sold 600,000 of them without any kind of plan.
Which is why Im in favor of leveraging our extreme consumer demand, and enacting tariffs. So, if you want a flat screen TV, you can pay for one built in the USA, or you can pay more for one built in China, have fun with that. If you build good products you don't need a tarriff to sell it. If you are a good business man or woman you don't spend money building a factory to build a product that can be built cheeper somewhere else.
If the businesses themselves dont like it, , they can sell their crap to Indonesian kids. I wonder how many $300 pair of shoes theyll push there.
The market does not "always fix itself". That is proposterous, especially in cases when all the capital is highly concentrated in the hands of a few. Usually only revolutions "fix" that.
Tell me a case of when the market did not fix itself? The Government has had little effect on ever fixing the market. Those people that have the capital want to fix the market. They want to make even more money so the liberal establishment and all those that propose to eliminate capitalism can have even more to complain about.
Wow, so, you can accurately tell consumer demand, which is the biggest variable in the success of any business, by making a business plan? Thats amazing. You should bottle that skill up, and go on a speaking tour. You could make millions.
How do you plan to guage demand without a plan? Part of finding out what the consumer wants is in having a business plan. What do you think is in a business plan anyway?
If you build good products you don't need a tarriff to sell it. If you are a good business man or woman you don't spend money building a factory to build a product that can be built cheeper somewhere else.
Depends on how you define "good business man". If "selling out your countrymen for a buck" is part of being a good businessman, then I guess youre right.
Unfortunately, most businessmen are of this ilk, and thats exactly why, since they lack the moral fortitude on their own, they must be made to do it by laws.
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Tell me a case of when the market did not fix itself? The Government has had little effect on ever fixing the market.
The Great Depression, for one. World History is full of examples.
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Those people that have the capital want to fix the market. They want to make even more money so the liberal establishment and all those that propose to eliminate capitalism can have even more to complain about.
Are you kidding me? The people with the capital want nothing more than the economy to be hopelessly broken, led by an oligarchic plutocracy controlled government, making laws to keep their death grip intact.
Microsoft, Exxon, and Walmart do not want free market capitalism. They want to control barriers to entry to completely eliminate any threat of competition at all.
In the 1920's, there were dozens, hundreds, or even thousands of local and regional department stores, and very small chains.
In the 2000's, when do you see anything but a Walmart or Target going up.
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How do you plan to guage demand without a plan? Part of finding out what the consumer wants is in having a business plan. What do you think is in a business plan anyway?
It is impossible to "guage demand", especially for a new product. If you have the resources, you might be able to construct focus groups, but even they swing and miss badly (Arch Deluxe, New Coke, etc).
Most "demand" from a business plan sense, is projected figures, based on sometimes available statistics bent for their purposes, but usually just the business owners "guesstimate" (most often little more than wishful thinking).
The OP's plan was to offer people a single $3,000 payment to get the economy going. So what you are suggesting is to give the people $3,000 a month untill the economy is going? Where does all that money come from?
When chicagotode asked that the OP submit a detailed accounting, accurate to the penny, the OP clarified that $3K was to be an approximate average, with the payments to represent roughly the expected earnings of the unemployed as if they had their old jobs back.
The OP, seemingly, wanted users to consider the merit of the idea in principle, and not pick apart the details, and should nave included the word "average" in the line about the $3K. And, yes, it is monthly payments, gradually diminishing as hiring kicks in. I had no trouble seeing the OP's proposal in that light, and I'm not even overly bright or knowledgeable about economics.
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, they can sell their crap to Indonesian kids. I wonder how many $300 pair of shoes theyll push there.
