Cheaper housing. With cheaper housing, people could afford to work for less pay, and businesses could get more profit out of productivity. Businesses could compete more, bringing inflation down. Unemployment would go down as a result, food stamp numbers would go down, requiring fewer taxes. The economy would prosper.
Unemployment extension still undecided as over a million lose benefits!!!
- Thread starter S2007S
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The unemployed and homeless can live in tent cities. Give them food stamps, they can survive, just like they do overseas in poor countries. These handouts have to stop.
Learn from the illegal alien who risks his life crossing the border, coming here, finding a job. He even has enough money to send home to Mexico.
That's not the only factor, here are the main problems:
1. It takes money from taxpayers who would otherwise have spent or invested it, thus damaging businesses who would have received that spending.
2. There is a deadweight loss from the administrative overhead cost of taxing it and then redistributing it. This is totally unproductive and creates nothing of use.
3. It reduces the incentive of the unemployed to find work. The longer people are out of work, the more their skills and motivation deteriorate.
4. It keeps wages artificially high by reducing the available labour pool and lowering the supply of labour.
5. It reduces the incentive of employees to save up a sufficient emergency cash fund to protect against unemployment.
In return, it provides a cushion for people who have lost their jobs. However, people can already have their own cushion by saving privately. So, it's only really a true benefit for people who were too poor or young to save anything meaningful.
That's the lump of labour fallacy. There are always more jobs available than their are people available to work, it's simply a matter of what price those jobs are offered at. Outsourcing lowers wages temporarily but those lower wages result in higher profits for corporations which have to go back into the economy, which they do in the form of greater business spending and investment, which in turn creates more jobs again. If outsourcing is profitable (and if it wasn't, no one would do it), then for each $1 worth that goes out, more than $1 is saved, and thus companies have *more* money to spend and invest than they did before, and thus will on balance hire *more* employees (or the same number but higher wages). Outsourcing therefore increases employment and/or wages for domestic employees, the exact opposite of what its opponents claim.
The argument against outsourcing is exactly the same as the argument against technological progress. People used to destroy weaving looms because they allegedly "destroyed jobs". If it was true that each efficiency-improving piece of technology destroyed jobs, then by now after 200 years of technological progress since the industrial revolution, the west would have 90%+ unemployment. Whereas in fact it has no more unemployment over the cycle than it did 200 years ago. Thus, technology - or anything else which improves profits and efficiency of production by replacing cost-ineffective jobs - does not increase unemployment over the long-run.
You are committing a basic economic error, looking at what is seen (the loss of the job to a cheaper outsourced alternative) and ignoring what is not seen (the increased efficiency of production and thus higher profits, which must get reinvested and thus leader to *more* or *higher paid* jobs). Considering both the unseen as well as the seen consequences, outsourcing - just like technology - improves wages, living standards, corporate profits, and productivity in the delivery of goods and services.
So, you should only be against outsourcing if you want lower wages, lower living standards, less profitable companies, and less output per man hour worked or dollar invested. I.e. if you want to return the world to the dark ages.
Good point. The way to lower those prices is simply to eliminate all government subsidies and incentives for funding college degrees and housing, both of which grossly inflate the natural demand for those things. They would then fall to what people can naturally afford without having to take on crippling debt loads.
I agree, infrastructure spending is best done in recessions. Instead, the western governments have subsidized money-losing mismanaged banks and insurance companies, and have artificially kept homes too expensive. The latter two are actually harmful to the economy and society, rather than beneficial. Society would be better off if all homes cost 1 dollar or 1 euro etc, and would be better off it only well-managed conservatively-run bank and insurance companies existed.
1. Because they are dumb
2. Because people would protest about "forced labour"
Imagine some fired accountant moaning and bleating about having to learn to weld or carry bricks while building something. Or some "diversity counsellor" having to dig a ditch. Lol, actually that sounds like a great idea!
The house gets sold at the market clearing price, which will go significantly lower because of increased supply. Houses will finally go to what normal people can actually afford to pay without getting into hock for 30 years.
Ditto with wages. Wages will collapse and so the unemployed will get hired by the millions, and will be put to work creating valuable products and services, allowing businesses to grow, make money, and invest, which will in turn quickly pull the economy out of recession.
If your logic was correct, then if you stuck 10 million people in a new country, they would be permanently unemployed because they would have no purchasing power to buy any goods, and thus there would be no "aggregate demand", they wouldn't get hired etc. Whereas in fact what always happens in those situations is that people start working self-employed to survive, some earn a surplus and start spending or hiring others, entrepreneurs spot opportunities and start providing desired things for a profit, an economy builds up and economic growth takes place, and eventually everyone who wants to work gets work. That lasts until geniuses start thinking the system isn't good enough and it needs some government oversight to fuck it up.
There is always a job, it's just a matter of what you will work for. I will hire you for $1 per hour, for example. I am pretty sure someone else will hire you for more than that.
Also, there is always self-employment. Go to Wal-Mart, buy a bucket, ladder, mop, and some cleaning fluids, and go knock on doors offering to clean windows. Or get a mower and do people's lawns etc. Or offer your services looking for cheap repossessed homes for sale. I'm quite interested in bargains in places like Vegas and Detroit, but there is a shortage of people willing to be buyer's agents for a cheap price. If you spent the last 12 months learning about real estate and offering buying agent services for 0.5-1% of property value, you'd be able to make 50k+ easily for vulture investors.
As always, effort and initiative are reward, sitting on your ass and whining are not.