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Where's the stimulus?
On Sun, 20 Feb 2011 03:32:06 -0500, "Eisboch" wrote:
wrote in message ... On Sat, 19 Feb 2011 14:20:50 -0500, BAR wrote: In article , says... On Sat, 19 Feb 2011 08:11:53 -0800, wrote: Unemployment benefits are one of the MOST stimulative things around. I don't think there's any evidence for that. A lot of smart people would argue that new infrastructure projects, as long as they're really needed, not only create jobs but also leave behind something of long term value. More importantly they increase the velocity of money flow which is a basic economic principle. Look I have money in my left hand. Close your eyes. No open your eyes. No the money is in my right hand. It is the same money it has just been moved from one hand to the other. There has been no wealth creation. There is no new money. There is no increase in the amount of money. It is all just slight of hand. No idiot... most if not all of the money from an unemployed person who receives benefits is SPENT IMMEDIATELY. That is stimulative. Giving rich people a few $1000 does next to nothing. They put it in savings and maybe a little of it ends up as stim. You are leaving out the real purpose of a true "stimulus" package. Economic growth. Extending unemployment benefits may be a necessary thing to do to prevent people from falling off a cliff but it does nothing to generate growth in the economy. The families of people who have lost jobs are getting by on a percentage of their former income. For them it's a time of belt tightening and controlled spending. The problem (as I see it) is the ramifications of a global economy and competitive manufacturing. It's convenient to simply blame business for outsourcing jobs but in reality they *have* to in order to stay in business. Here's what is going on ... and it ain't pretty folks. With the emergence of China as a major global manufacturer (along with Mexico and a few other nations) the USA can no longer compete. Our pay scales and benefit packages, established over decades, are simply too high to compete with those of places like China. Many point fingers of blame at China citing worker abuse and slave labor, etc., but the fact is that the Chinese worker never had it so good. 20 years ago he and his family pedaled around on bicycles. They have traded them in for their first car. People tend to compare working conditions, pay and benefits relative to what would be expected here in the USA. That's a mistake. Factory workers in China are making more money now and are enjoying a standard of living that they never dreamed of 20-25 years ago. In time Chinese workers may follow the same path as those here in the USA and start demanding higher pay, better working conditions and benefit packages and the cost of Chinese produced goods will begin to rise. But that's a long way off. Meanwhile, the Chinese government is financing the USA in order to maintain a market for their manufactured goods. The USA is the largest importer of their products .... for now. Once the Chinese establish significant markets elsewhere in the world, the financing of the US economy will end. That's when the **** will hit the fan big time. And it's not 5 or 10 years away. It's happening right now. The whole relative pay scale and benefit expectations in the USA is going to have to be completely revamped. This will affect the values of homes, property and everything else that makes up an economy and standard of living. Those who are living in the past, with expectations of payscales and benefits of the 80's 90's and early 2000's are living in a dreamland. Stand by for heavy rolls. (boating content) Eisboch Nice argument, but poor conclusions... there's no crisis on the scale you're arguing for. It's just fear-based. Most of China is very, very poor. They will remain that way for a very long time. |
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