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I'm less than enthusiastic about Romney, but he can't do any worse than our current disaster of a POTUS and since they are the only pitiful choices we have...
They are not. The Libertarian candidate Gary Johnson will be on the ballot in all fifty states as of now. There aren't any foreseen ballot access problems but at the least people in 48 states will be able to vote for him, and in the electoral college as well.
Yes. Mitt Romney understands what businesses need to succeed. He knows what is good for them and what obstacles they face.
He understands that the US Corporate tax rate is too high, so we can't compete with other developed countries. The effective tax rate on new investments in the US is 30%, while the average of OECD countries is 22.5%. People who are looking to invest in an economy or business on the international level are taking into consideration the extra 7.5% taxes in America(let alone the fact that some individual countries have a tax rate that is 17% lower than America's).
If we remove the obstacles to businesses, they will do the hiring. Unemployment will fall, and tax revenues will increase again.
Romney supports the War on Drugs, which creates poverty and increases the size of a class of people who are environmentally forced to be dependent on the government. Increasing the size of government, ere go how much it spends, ere go how much we pay/waste on a problem the government is creating itself.
As the Depression of 1921 shows, the best economic policies when the economy is in need of recovery are laissez faire policies. Mitt Romney definitely is not the president for this department, and as such should be overlooked in favor of someone along the lines of Ron Paul or Gary Johnson.
Gary Johnson would be the best choice for president if what you want is economic recovery.
He plans to cut spending across the board, hoping to reduce Federal spending by over a trillion dollars. This is practically the exact opposite of Obama and Romney, whom have both shown economic plans that would only increase spending.
His plan is to balance the budget immediately after taking office, and to veto any bills that admit spending dollars that go beyond what the government takes in.
He wishes to audit the fed and start up Federal approaches to reducing fiat currency and inflation. As well, he would demand that the Federal Reserve maintain a high level of transparency so that it can be scrutinized in any way it could possibly do something wrong before it does it.
He's for eliminating tariffs and allowing free trade over seas.
What he wishes to cut spending in not only includes Social Security, medicaid, and medicare, but government employee wages, the military, and allowing a more Free Market system where small business would be able to thrive without unnecessary and harmful government regulations.
I highly support most of his economic positions and feel that he is the best choice to get the States out of where it is now.
So the Congressional Budget Office tells you that Congress has to spend as much money as they want or there will be another recession, and you're just going to take their word for it? all of the recessions we've had recently were caused by government created scenarios.
While I generally agree that spending needs to be cut, and I support doing this by ending the wars in we are currently involved in in the Middle East, I have to disagree about a couple of his positions regarding what will and what will not help the economy.
First off, contrary to popular opinion, our deficit is not the main cause of our economic troubles, nor will balancing the budget be a cure all for fixing the economy. Certainly I agree that we should almost certainly reduce the current deficit, but doing so as quickly and drastically as Gary Johnson plans to do, while well intentioned, will almost certainly cause more harm than good. Allow me to explain:
Small business owners have not been suffering from burdensome taxes or government regulations. They've suffered because unemployment is high, which means that demand is down, and when demand is down people are less likely to spend money on shit (by definition). Now we could argue about what initially caused the economic recession that led to the decrease in demand, you'd say it had something to do with excessive government regulations, and I would say it had to do in part with the fact that the Glass-Steagal Act (that was intended to separate commercial and investment banks)became more and more impotent proceding its passage up until its eventual repeal in 1999; or to put it more simply, a lack of government regulation. This argument would likely get us nowhere and what's the point of arguing about who is to blame for sinking the Titanic when we're still on the boat. My point is, we need to look at what will improve the current low demand situation and the best chance of doing this is to decrease unemployment (people without jobs buy less shit).
So what will decrease unemployment? Ironically enough, it's increasing demand! If people are more willing to buy shit then people will be able to sell more shit so they will need to higher more workers to make and sell the shit (and also services: for the sake of this argument assume shit is an amalgamation of goods and services). So we need to decrease unemployment to increase demand, and increase demand to decrease unemployment. Well this sucks. What can we do?
According to Gary Johnson it's cut spending by cutting wages of government employees and benefits to citizens, stop inflation and to cut corporate taxes (which he claims are the real job killer on his website). Now giving people lower wages is not easy. If you don't believe me, imagine you've been working a job for a while and someone tells you that even though you will be doing the same amount of work as you always have, you will have to accept less pay for that work. People usually don't respond well. In economics this concept is known as "sticky wages" and can create a bunch of issues when markets try and correct themselves. Now there are two ways employers can get around this problem: a) change human nature b) rather than lower wages by x% just fire x% of your workers and have the remaining workers just pick up the slack. Which do you think most choose? This also means that since they are firing workers they are obviously not hiring new ones which is not a good thing for unemployment. Here's an interesting fact though: let's say you need to reduce the cost of labor by 3%, and so you have the choice of either firing 3% of your workforce or cutting salaries by 3%. For the reasons given above you will choose the former option because the latter will be unacceptable to your workers, and impractical because of their contracts.
Now up until this point we have sort of implicitly assumed no inflation, and if humans are completely rational then really inflation shouldn't play a part. Cutting someone's salary by 3% with 0% inflation should be the same as giving them a 2% raise when inflation is 5%. However, study after study has shown that people don't think rationally like this. It is much more acceptable for employers to offer wage increases at 3 percentage points less than inflation, rather than cutting their pay by 3% with no inflation. Therefore if there exists a relatively low, steady (a.k.a. predictable level of inflation) then the employer actually has a choice now and can in fact decrease there real wages because their nominal wages haven't gone down. Given GJ's position on inflation, we would be stuck with sticky wages meaning that employers would have to result to firing employees and not hiring new ones keeping unemployment at levels that depress economic development and keep demand too low for businesses (small or otherwise) from thriving.
Hopefully you now see why major cuts on government spending would exacerbate the current problem as opposed to solve it. Furthermore, pushing inflation down to zero would also lead to increased unemployment further harming our current recovery.
The real way to solve the current economic situation is to deal with the inequality in the country that has been increasing since 1979. There are a number of factors that have contributed to it (many of which are still unknown by economists), but cutting corporate taxes as well as benefits for the less well off is almost certainly not the right approach since that will lead to the opposite effect, further eroding the purchasing power of America's middle class which is the main driver of our economy.
I actually really want to like GJ a lot, partly because of his stance on social issues, but more so because he is willing to stand up for unpopular positions when popular candidates like Romney and Obama seem too afraid to act contrary to popular opinion. As much as I would like to agree with him, however, I can't fail to see the huge blemish that is his economic approach which would cause more harm to the American economy than any good it would do.
Hah. Oh man. There's a lot of stuff there I want to get to but I need to start at the last part that I read. The phenomenon you cite. Starting in 1979 the inequality in this country has been rising steadily, as you said. The reason for this is mostly the creation of the Federal Department of Education by Jimmy Carter. Just think about it. Since 1979 the average test scores of students in public schools have remained the same, or within a margin so small it might as well be. Before then the average was slowly rising. School is a business. No one would pay money for a school that didn't improve your child's test scores and intelligence... unless it's in their taxes. As a result of the failing stagnant education system that simply acts as a guaranteed jobs program to keep humans addicted to government, people who don't have the benefit of living in a good school district are screwed. People have been arrested for trying to send their kids to a better school. Why this staunch resistance to school choice? A system that has worked in every country it has been implemented? The government needs stupid, weak, easily manipulated people that need the government to justify its existence. Same drill with the Drug War. These things create poverty, and if they were eliminated the need for the kind of aid people talk about would be gone. Drastically reducing the cost of government. Gary Johnson is talking about ending the Drug War and the Federal Department of Education, in addition to advocating school choice. We spend more money on education than any other country and we're still failing, I think our methods need to be changed. I just want to point this out as an example of the kind of waste Johnson is talking about cutting.
The Federal government adds thousands of pages of regulations that businesses have to work around every year. State governments add thousands of pages of regulations that businesses have to work around every year. See what I'm saying? It's redundant, not to mention county regulations, and city regulations. There are states where if an Entrepreneur thinks he can provide a better service to customers that get that service from Unionized employees, then he is legally bound not to compete with the price at the customer's benefit. This practice started after slavery ended and Black people along with Immigrants from Mexico and Central America, etc. were entering the work force, asking to work for very little, less than the Unions which were White only at that time. If you want to live in a place where progress and cheaper, better goods & services take a back seat to this impossible safety net illusion Statists have, that's perfectly alright. That's why we have state's rights. At least with the Federal regulations loosened or gone entirely the giant corporations who bought all the politicians writing those regulations won't have such a massive upperhand on small business owners who get none of the tax credits or loopholes that stem from a faulty corruptible Income tax model, when the production and sale of everything you use your income on is already taxed. Oh hey Gary Johnson wants to scrap the current tax system. He's advocating with the fair tax right now, but it's really just a model to face the rigor of diplomacy between the branches of government. It's cool because used goods aren't taxed so there's a lot of initiative to recycle and for producers to make reliable goods. Not bad for the environment.
Some of the policy you're talking about it seems like you're not on the right web site. When Gary was the governor of New Mexico, he reduced the size of state government by over a thousand jobs without firing anyone. His was one of four states with a balanced budget when he left office, term-limited. We all know that if not for the two-term limit he, as the most popular governor of NM in the past several decades at least, would have been re-elected. He took state healthcare and reformed it, delivering better care at a 20% savings, and that's just money saved on the state application of healthcare which isn't the only tax money used on it in every state. This is ludicrous, why is he wrong to say that "There is a better way to take care of people, and its cheaper too."? This has proven true with every industry opened to the free market, why not with some of the stuff we traditionally assume as the government's job? Why can't we introduce elements of the free market into the way our government operates like with School Choice so that we can implement a level of accountability to the people paying for it and maybe see some results from this alleged do-gooder instinct.
You talk an awful lot about jobs but Johnson has done an awful lot about jobs. He has the best record out of any of the candidates on growth and unemployment. The Federal government still twists the facts they put out by things like not including people who have been unemployed over a certain length of time, etc. so it's impossible to tell where Obama really is in regards to his first term. But look at his record before he took office. What kind of success did Obama display in the Executive branch of government that made people think he would be a good president? Oh that's right- NOTHING. Romney's record is... unremarkable. Literally nothing to be mentioned worthy of praise. This alone makes Johnson the only sane choice for reasonable, logical voters. People keep throwing up this wall of Keynesian economics to tell us that we can't possibly spend less money than we are and get a better service for it, even though the price has been rising for years and it still hasn't gotten any better. Something is fundamentally wrong with that picture. Here's Gary Johnson, proven to run executive government to everyone's liking, to everyone's benefit, while lessening the tax burden on everyone, and you're trying to disprove his plan for the rest of the country with theory that has only led us into massive debt that someone someday I guarantee you will come to collect, from us, whether we like it or not. That's why I'm voting for Gary Johnson and why you should too.
The phenomenon you cite. Starting in 1979 the inequality in this country has been rising steadily, as you said. The reason for this is mostly the creation of the Federal Department of Education by Jimmy Carter. Just think about it.
As much as I would like to believe that we can explain wage inequality just by thinking about it, in economics we actually have to have evidence to back up claims. If we want to discuss wage inequality in the U.S. I think the best place to start is by looking at Trends in U.S. Wage Inequality by Autor, Katz and Kearny. If you are unfamiliar with it, then I will summarize some of the main points. The high-school college premium has contributed to a significant portion of the increasing inequality since 1979, but cannot account for all of it. This "residual inequality" as they call it, is signficant not only because it cannot be accounted for by either education nor the demographic composition of the labor force but also because, like the college-highschool premium, it has been increasing. You're explanation fails to account for any of these facts, and frankly is a simplistic partisan explanation for a very complex phenomenon. I do not mean to say that the public schooling our nation is not a serious issue and that it doesn't need to be addressed; it is a serious issue and does need to be dealt with. I'm not even disagreeing with the ways in which GJ wants to go about fixing education; vouchers seem like a promising solution. The issue though is that the problem of inequality cannot be fully explained by education, and by talking about it here you are changing the subject away from what we are actually talking about: economic recovery.
I don't know why you brought up the drug war. I mentioned it nowhere in my argument (although I would list it under the social policies that make me want to like him).
Some of the policy you're talking about it seems like you're not on the right web site. When Gary was the governor of New Mexico, he reduced the size of state government by over a thousand jobs without firing anyone.
Even if you are right and his spending cuts not costing a significant amount of government jobs (which seems doubtful), it is almost certainly the case that he will be cutting money from government contracts which will force private businesses to lay off employees. The main point of this, of course, is that it will continue to depress consumer demand which in turn will lead to less investment slowing economic recovery.
Feel free to rant about libertarian ideology, but I will not respond. I prefer to stick to the facts. When you decide that you want to stop changing the subject and actually stick to discussing economic recovery then we can have a real discussion.
You also appear to fundamentally misunderstand what is meant by Keynsian economics (and economics in general). People don't argue that it is impossible to pay less and get more, they say that if you want to stimulate economic recovery in a recession you need to increase demand. One way in which this can be accomplished is through government spending: the quality of service you get out of this spending is actually irrelevant to the Keynsian argument (although clearly relevant for other reasons not having to do with this debate).
The Drug War and public education are just two examples of problems the government creates which have detrimental effects to society. This is wasted money, and I like to use the Federal Department of Education as an example of the worst case scenario with these things. I isolated them with respect to their relevance to Gov. Johnson's platform, as contributing factors to income inequality, as Vice laws force millions of dollars of legitimate business underground, and essentially wasting tax money that could be doing something useful or be back in the hands of the tax payer. I guess there is an argument that these government created jobs are completely superfluous and when the government stops performing them the demand will disappear, leaving those employees with skills they couldn't possibly use anywhere else. Even so the amount of opportunities opening up in the states under a Johnson presidency would offset anything lost by the government. With no corporate, business-to-business, income, or capital gains tax, entrepreneurs would be scrambling to open up shop in our borders. There would be plenty of investment, especially since we would be paying back our debt, things wouldn't look so risky on an international level. Who would invest in something when they know they're not going to get their money back? What I'm hearing from this Keynesian thing is that you believe that the Government can increase demand? This seems strange to me... People's demand for goods and services will be there and whatever it is with or without the government. If anything Government, in forming monopolies on certain goods and services, reduces demand by taking potential jobs from competitors off the table.... Maybe I just don't get it. Even so you admitted that the quality of the service we're getting from this administration or that we would get from the Romney administration is poor, not in so many words, but you seem to agree on most of the issues that really create disparity in this country. So we should be trusting it to someone we know has already improved an economy? Like Gary Johnson? I mean, he has proof. It's literally the best record. You can hold them up next to each other. Can we count on your vote? If not you should admit to yourself at some point that you're knowingly not voting for the best odds at recovery.
Wow, it really is fun running into a libertarian who doesn’t understand economics or finance.
So let’s start with economics since that appears to be where the most glaring ignorance is. You claim that government cannot change demand and it merely is what it is, as if it were some universal constant that was unaffected by other factors. This is simply not true. If I gave you $1,000,000 do you think your spending habits would be affected? What if I took away 70% of what you earn (assuming you have a job)? Do you think that this may change your weekly spending? Consumer demand is affected by a number of variables, and one of the most important is income. If there is a town where the government employs a number of people, or where there is a company that relies on government contracts and government funding is cut then the people who rely on it will have less money to spend. This shifts their demand curves downward meaning at every price they will purchase less of any normal good. Therefore, even the guy who owns a business in this town that has no affiliation with the government will be effected by cutting government funds because his customers will have less money to spend therefore decreasing their demand. Get it?
The fact that you think you are in any position to critique Keynsian counter-cyclical policies when you don’t understand the underlying fundamentals on which the theory is based…on which all of economics is based actually, is absurd. If I, for example, burst into the office of an astronomer and started arguing that the earth is flat because people in Australia don’t fall off, I would be laughed at. Trying to say something intelligent about economics without understanding demand is like trying to say something smart about astronomy without understanding gravity.
About your continuing insistence on discussing education: show me proof. Just because the U.S. department of education was founded in 1979 does not prove that it has anything to do with inequality. You have shown that it may be plausible that there is some connection, but plausible is not enough. Plenty of plausible explanations for phenomenon are simply wrong, and therefore we must actually look at the data and see what the cause is. Allow me to give you an example:
Plausible argument: Technology has led to an increase in inequality because it has made certain skills more profitable and others obsolete causing skilled workers who perform complex tasks to be more productive, semi-skilled workers who perform routine tasks to be replaceable and unskilled workers who perform manual tasks to be unaffected. This has led to an erosion of certain middle class jobs, such as bank tellers or typists who, because of technological shifts, are obsolete professionally. This has led to a polarization of earnings and therefore increased inequality.
If I were to stop here and provide no evidence then we would be stuck. You have your argument, I have mine, and neither one of us has evidence to support it, just arguments that may or may not be plausible. Admittedly my argument is neither partisan, nor based on ideological principles like yours is, but let’s assume that the arguments are equally valid. So what would either of us have to do to get out of this stalemate? One way would be if we found a study from a reputable source that supported one argument of the other. For example if I provided an article called Computing Inequality: Have Computers Changed the Labor Market? from The Quarterly Journal of Economics I would have actually provided support for the plausible argument showing that it is more than plausible, but actually fits as a theory with the real world. Please provide evidentiary support for your claims or I will simply ignore/mock them.
Your actual claims about the department of education are mostly unfounded as well. In spite of the existence of a national organization, most decisions regarding schools are made at the national level. Once exception to this is the “No Child Left Behind Act” which does impose federally mandated testing and grants federal funding based on the results. I’m in favor of repealing the act, but once again that is not relevant. You claim that people are arrested for going to schools other than the ones in their district…do you think the federal government is responsible for this? No, it’s determined at a state level. Maine and Vermont both have Voucher based programs that allow parents to choose where to send their kids, and there are other similar programs in a number of other states. Some use tax credits, some use Charter school systems and there are a variety of other approaches. The important thing to note here is that it is not decided at the federal level, so you trying to blame the federal government for this problem is absurd and really just reveals your juvenile partisan attitude against the federal government. I bet you’d find a way to blame them if you wet the bed.
Another reason your department of education argument fails is that inequality began to increase in 1979 and the U.S. department of education was founded in 1979. This may not seem like a problem at first, until you consider the fact that children in schools don’t immediately enter the workforce. Most of the effects should have taken place later, when those people who would have actually been affected by the change made up a significant portion of the labor force. In the decade following the creation of the U.S. department of education, we should have seen only mild increases in inequality with the 1990’s and early 2000’s showing the greatest inequality increase. Is this what the data shows? Turns out no! Look back at the article I posted about wage inequality in the U.S. in my previous argument and you will see that the 80’s actually showed the greatest increase in inequality which would have been too soon for any changes to education made in 1979 to matter. Furthermore a large portion of the increase in inequality is among highly experienced workers who would have been to old to be affected by the changes as they would no longer be in schools. Once again, your argument fails. You can see this by looking at the Autor, Katz and Kearny article (a must read for anyone who is interested in U.S. wage inequality and doesn’t want to be mocked online by a stranger for not knowing what the hell they are talking about).
Just to sum up for you: your argument for the department of education being responsible for the increased inequality in the U.S. not only lacks evidence but isn’t even plausible for myriad reasons. You are now just embarrassing yourself.
Let’s move on to finance, since that seems to be another area that you do not understand. You argue that our current deficit/debt situation is an issue because people are going to stop lending to the Federal government because they believe we will not pay them back. Currently the U.S. has a AAA rating (as determined by independent ratings agencies), which means that according to investors, we are as safe as it gets – there is no rating higher than AAA. If you were right and people really were worried about us not being able to repay them, this rating would be lowered and we would begin to have serious problems because borrowing would become more expensive (interest rates would increase). As it stands, however, lending money to the U.S. government is still the safest possible investment an investor can make. The only people who think otherwise are people like you who do not understand the situation but instead listen to partisan rhetoric and media fear mongering.
We should look for ways for the government to save money, but the extreme cuts proposed by GJ are both unnecessary and potentially detrimental to economic recovery. Once our nation has managed to pull itself out of the current economic situation and unemployment is back to natural rates then we can start making budget cuts. What’s nice, however, is that as the economy improves spending automatically decreases because less people are eligible for entitlement programs such as unemployment benefits, and revenue increases because more people are working. Hence, one should not only not worry about a budget deficit during economic recessions, one should expect it to occur.
nor will balancing the budget be a cure all for fixing the economy
It won't "fix" the economy, mainly because efforts to "fix" the economy often come short. It's about encouraging a very fiscal responsibility so that we don't expand our debt, especially in a time when spending vs. GDP is becoming critical and talks on "raising the debt ceiling" is becoming more acceptable. Balancing the budget doesn't work when you do it in one year (Clinton did it for two years, still didn't do much), but it keeps things from getting worse. When you spend money that you don't have and haven't had for a very long time, one of the first steps is to just stop doing that. Like gamblers. It's a problem when they think that they can find a way to get out of their debt. The Universe isn't magic. If something is putting you into a hole, stop doing that. THEN find your way out of that hole that exists so far.
They've suffered because unemployment is high, which means that demand is down, and when demand is down people are less likely to spend money on shit (by definition).
Everyone suffers when unemployment is high for various reasons. But what people try to do when unemployment is high is find jobs. When businesses can not afford to hire new people, they won't do it. Some people, when they don't have a job but maybe have a small amount of money to invest, will try to create a business. However, if it is too expensive to start a business, they will either get a loan or not start a business at all. The ones who get a loan are already in debt, and if they can't afford to hire people (for various reasons, regulations and taxes being the main ones), their business will go under and job opportunities will be lost. As well, they are in debt.
Starting a business is a major risk, and being so expensive from taxes and regulations is a major incentive to not make the risk.
The free market isn't magic. It is simply realizing that maybe the best thing to do is to either get the best and brightest people to run government (which we can only dream of) or to allow the free people to trade and invest with each other without such burdens. The efforts of government may be noble, but if we want small business to thrive and to hire new people, we need to make it less expensive.
So we need to decrease unemployment to increase demand, and increase demand to decrease unemployment. Well this sucks. What can we do?
Remove government restrictions and regulations that get in the way of hiring new people and making prices cheaper.
According to Gary Johnson it's cut spending by cutting wages of government employees and benefits to citizens, stop inflation and to cut corporate taxes
Cutting wages is more about cutting spending. Inflation is a bubble. i'd say that corporate taxes (or any business taxes) are what really hurt business and their ability to hire new people.
Now there are two ways employers can get around this problem: a) change human nature b) rather than lower wages by x% just fire x% of your workers and have the remaining workers just pick up the slack.
All depends on the job. If someone's job was truly so expendable, I'd say that the third option would be to not raise their wages for a long time and to hire new people for less money. People are paid based on how much the business thinks they need them. A small business, like a banana stand, may want to expand and also sell fish. they'd need to hire fishermen. With not so much money, they can't pay the fishermen that much money.
It's less about current businesses that are well set in what they do. They often make enough money to constantly hire new people. It's more about the smaller businesses or corporations that are constantly having to make very careful decisions on how they should invest their profits. If hiring people won't make them a lot of money, or may even cost them money, they won't do it.
While I agree with a lot of what you said, you ignored my main point and about half of the fundamentals of accounting. Let's go back to the guy who has a little extra money and wants to start a small business. Since you brought up a banana stand let's say that's what he wants to open up. He will only open up the banana stand if it will be profitable to do so. Now you bring up a good point that a part of this calculation will involve how much opening up this banana stand will cost. If the government has excessive restrictions on small businesses then clearly this may outweigh any profit that he will earn. The same goes for any other costs associated with starting a business. For this example we will say that government posed restrictions (in the form of a license) has a cost of L and non governmental costs are C.
The part that I was discussing in my argument that you completely ignore in your discussion is his revenue. The amount he will earn selling his bananas is some function of consumer demand, or in other words R(d) where d stands for consumer demand. As demand increases so does the function R(d). Therefore his total profits can be expressed as: P = R(d) - (C+L). From this expression we know that our entrepreneurial friend will only invest when P is positive, which is whenever R(d) is greater than (C+L).
Let's now imagine two situations and determine if there really is money in the banana stand. We shall assume that there is some government building that employs a decent amount of the citizens of the town where the banana stand will be opened up. In the first scenario there are no major budgetary cutbacks to the organization housed in the government building. Because of this demand is relatively high and will be represented as d1. In the other scenario a politician like GJ steps in and makes budgetary cuts that either fore the organization to decrease wages or fire some people. For the sake of this example it doesn't matter if it's just the former, just the latter or a combination of both; the important thing to note is that the average income of the citizens decreases meaning less money to spend on bananas. In this scenario demand is d2 and we should note that d2 < d1. In the first scenario our friend who is owns the banana stand will make a larger profit than the man in the second scenario even though costs have remained constant in both.
Do you see why I have accused you of ignoring the main point of my argument now? I was discussing how demand affects people's incentives and yet you bring up cost. Certainly cost is important but even if the cost of starting a new business is almost zero people will still consider it a bad investment if no one is willing to buy bananas (even if those bananas are dipped in chocolate and covered in nuts). High demand makes all businesses more profitable, and during economic boom times we can do what Clinton did during the dot com boom and balance the budget. During recessions where demand is low, however, cutting spending only helps to reduce demand which in turn leads to less investment, higher unemployment and, ironically enough, less government revenue. The loss in revenue may be outweighed by the costs to the government, but the societal cost will likely be greater thanks to what macro-economists call the "multiplier effect" (which to express briefly, is the idea that when you take $1 out of the economy, you are in effect taking out more than $1 because dollars are spent over and over again).
In your argument you discuss how expensive it is to start a business from excessive regulations and taxes, and yet you fail to provide any evidence to support this proposition. The U.S. is extremely pro-business when compared to other nations of similar wealth. Many European nations have absurd labor laws that hinder growth. In Italy for example it is next to impossible to fire a person, and therefore businesses choose not to hire people, which in turn leads to high unemployment, especially for young people in Italy. Libertarian hyperbole aside, those kind of laws do not actually exist in the U.S. In fact, with current technology, small business costs have never been lower...unfortunately so is demand which, like I said earlier, is the real problem that plagues the economy during times of recession.
As far as balancing the budget: we are not nearing critical deficit levels and "raising the debt ceiling" is not some emergency catastrophic event: it has occurred 17 times since 1993...in other words almost once a year! I would really appreciate it if in the future you would base your claims on fact and not assertion. I cannot blame you for having the impression that raising the debt ceiling is a big deal, this is in large part the fault of the media, but I can blame you for not checking your facts before putting them into the argument. Furthermore, my original point still stands that while our deficit may be a problem it is not pertinent to the issue we are discussing which is economic recovery.
We shall assume that there is some government building that employs a decent amount of the citizens of the town where the banana stand will be opened up.
Extreme assumption, of course. You're suggesting that employment comes from government... and? Are you saying that if government cuts down its size employment will just reach a halt?
Are you aware that the existence of the public sector is competition towards the private sector?
Rick Scott and Chris Christie both increased job growth while cutting back government. Now, their claims may have gone overboard (in that, their states did not have such a high percentage), but their statements still hold true that they have increased jobs, all in the private sector. You do not need government to employ people. The people can do it themselves. Relying on government to create jobs misses a major point: Why is government the job creator? Can they properly meet demand or efficiently supply the consumers? Very unlikely. When an employer is investing his own money and assets, he has much more at stake than a government with tax payer dollars. Allow the tax payers to spend their own money. I didn't really ignore your statement, I just didn't think you'd make such an assumption about how employment works...
I would really appreciate it if in the future you would base your claims on fact and not assertion. I cannot blame you for having the impression that raising the debt ceiling is a big deal, this is in large part the fault of the media, but I can blame you for not checking your facts before putting them into the argument.
Ignoring your condescending language, I am well aware of the debt ceiling increases. That wasn't my point... I am against the idea that it is a mainstream acceptance to raise the debt ceiling where people can loosely talk about it. When people say "hey, we do it all the time, so it's okay."
Just because something is done doesn't make it right. I am against the Patriot Act even though we've doing it for almost a decade. I'm against most aspects of the FCC even though it's been around since the 30s.
My problem is that government continues to believe that it can borrow more and more money with little consideration for how the spending and deficit are outweighing our GDP. This idea that raising the debt ceiling is fine is my problem, under any president.
Honestly, I think we have tried most of Romney's bulllshit under W. I didn't work. Sure, cutting taxes for the wealthy is great for the wealthy. They like it a lot. It's not so great for the overall economy, especially if you raise taxes on everyone else.