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Whether our government is 10 trillion or 100 trillion in debt, can someone explain to me how that links to job creation by the private sector? You could argue bigger debt means bigger taxes for corporations, but historically that isn't true. Corporate taxes have only gotten lower as our debt increases.
In fact, it seems our debt and the tax burden for the rich don't have any relation at all. The tax burden for the top 1% has been on the decline for the past 70 years.
Since job creation is the number 1 priority, why are we doing it through reducing our debt? It doesn't seem to have anything to do with jobs.
Government taxation and regulation (the tax code) has everything to do with private sector job creation.
Taxes, fees, telling people that if you have more than 4 employees then you are buying everyone health insurance under ObamaCare. It all caused loss of jobs.
How about the new real estate tax next year of nearly 4% if you sell your home? Don't you think every time you move you should just write a check to the government for $15,000 or more?
These all effect the economy and private sector job growth, and in truth, government employment is probably 1500% higher than it was in the 80s and we need to let a lot of people go there as well. That is all a drag on tax dollars.
Debt grew most rapidly under Reagan since WWII, and the cons claim the economy did too.
Debt didn't grow as rapidly under Clinton, and the cons claim that the economy grew better under W Bush under whom debt grew more than before it.
Government taxation and regulation (the tax code) has everything to do with private sector job creation.
Taxes, fees, telling people that if you have more than 4 employees then you are buying everyone health insurance under ObamaCare. It all caused loss of jobs.
Again, what do taxes have to do with government debt? Can you point out some facts linking the two? Taxes on the rich have never done up in response to debt since WWII. And taxes on the rich are currently off the table politically.
And what does regulation or Obamacare have to do with debt? This thread is about the linkage between debt and jobs, not regulation/Obamacare and jobs.
Quote:
Originally Posted by RCCCB
How about the new real estate tax next year of nearly 4% if you sell your home? Don't you think every time you move you should just write a check to the government for $15,000 or more?
Again, you seem to be linking taxes do debt. Where is this link?
Quote:
Originally Posted by RCCCB
These all effect the economy and private sector job growth, and in truth, government employment is probably 1500% higher than it was in the 80s and we need to let a lot of people go there as well. That is all a drag on tax dollars.
What does the government having 1 job or 1 million jobs have to do with the ability of the private sector to create jobs? Government employment has grown but the tax burden on the rich has gone down. I see no link.
The simple answer is that there is absolutely NO connection. We all agree that our debt is a problem that needs to be addressed, but Republicans are tying the two together and focusing solely on the debt simply because they have absolutely no idea on how to get private sector job growth.
Whether our government is 10 trillion or 100 trillion in debt, can someone explain to me how that links to job creation by the private sector? You could argue bigger debt means bigger taxes for corporations, but historically that isn't true. Corporate taxes have only gotten lower as our debt increases.
In fact, it seems our debt and the tax burden for the rich don't have any relation at all. The tax burden for the top 1% has been on the decline for the past 70 years.
Since job creation is the number 1 priority, why are we doing it through reducing our debt? It doesn't seem to have anything to do with jobs.
any time you increase government regulation, you increase government spending. that adds to the debt. that also costs business money to comply with those government regulations, and that is what costs jobs. how you ask? good question. when you increase the cost of doing business, a business has a few options as to how to deal with the increased costs;
1: they can raise prices to cover the costs
2: they can cut expenses to reduce other costs
3: they can cut jobs to reduce payroll
4: they can absorb the cost
5: they can do a combination of the above
for instance, lets say i run a full service hotel, and you as the government make a new regulation that will cost me $20,000 per month to comply with. you are going to have to add people, and thus spending, to make sure i, and other companies comply with the new regulation. i on the other hand have to deal with cutting spending, or raising prices. so i do the following;
1: i raise food and beverage prices 10%
2: i raise room prices 5%
3: i buy less expensive consumables, toilet paper, towels, soap, etc.
but these changes only get me half way to where i need to be, so i start cutting staff, two maids, one full time desk clerk and put another on part time, cut two restaurant severs, a busboy, a cocktail server in the bar, and a dishwasher. i might even cut a maintenance person. had you not made the regulation, and thus increased spending, i wouldnt have had to cut staffing. and while the regulation might add say 1,000 new government jobs, it is going to lose more than 100 times that in private sector jobs.
as for the tax burden on the top 1% going down, that is pure rubbish. true the tax RATE has gone down, but the tax burden has actually gone UP. up through the carter years the top 1% made 19% of the income, and paid 19% of the taxes collected. after reagan cut taxes, the top 1% still made about 19% of the income, but they paid 40% of the taxes collected, and that holds pretty much true today.
there is a big difference between tax rate and tax burden.
Again, what do taxes have to do with government debt? Can you point out some facts linking the two?
It's tantamount to asking "what does personal income have to do with personal debt"? Each dollar of debt, and the interest that accrues on it, is a claim on future income. If the tax rate stays constant and the debt increases, the claim on future income increases. The result? Either you have to raise taxes to make up the shortfall or you default.
That's the link between taxes and debt.
Quote:
Originally Posted by Majin
Taxes on the rich have never done up in response to debt since WWII.
Recall the US had made huge investments in factors of production with the wartime debt. Factories, mines, roads, etc. Overall economic productivity increased after WWII, which is why taxes didn't have to be raised. Now take a look at the situation today, the pile of accumulated debt hasn't been used to invest in factors of production. Instead it's been directed toward property, consumer spending and entitlements. None of this increases productivity.
Quote:
Originally Posted by Majin
And what does regulation or Obamacare have to do with debt? This thread is about the linkage between debt and jobs, not regulation/Obamacare and jobs.
Obamacare is yet another entitlement adding to the mounting pile of debt. It doesn't contribute to factor productivity, so without raising taxes it simply increases demand on future income.
Quote:
Originally Posted by Majin
What does the government having 1 job or 1 million jobs have to do with the ability of the private sector to create jobs? Government employment has grown but the tax burden on the rich has gone down. I see no link.
Employing 1 government worker costs considerably less than 1 million government workers. And where do you suppose the salary for the 999,999 extra employees comes from? You don't see the link? I'll help you: taxes. And who do you suppose pays those taxes? I'll help you here again: consumers and employers.
Now as you increase tax on consumers, you decrease their spending power. When consumer spending power is decreased, demand falls. When demand falls, businesses don't produce product. When businesses don't produce product, they don't employ people.
Now let me ask you, when demand falls and you add and increased tax burden on employers, what do you suppose happens? Do you think they suddenly decide to hire more people?
The concern is that many years from now Congress may raise taxes. There is also the concern that government debt may eventually lead to higher interest rates. Currently business is stepping up its borrowing anticipating that present low interest rates will be coming to an end. The danger is not immediate as there is plenty of slack in the economy. But it could be in a few years if the economy is going gangbusters. Since Congress moves at glacial speed, action needs to begin now.
It's tantamount to asking "what does personal income have to do with personal debt"? Each dollar of debt, and the interest that accrues on it, is a claim on future income. If the tax rate stays constant and the debt increases, the claim on future income increases. The result? Either you have to raise taxes to make up the shortfall or you default.
That's the link between taxes and debt.
Recall the US had made huge investments in factors of production with the wartime debt. Factories, mines, roads, etc. Overall economic productivity increased after WWII, which is why taxes didn't have to be raised. Now take a look at the situation today, the pile of accumulated debt hasn't been used to invest in factors of production. Instead it's been directed toward property, consumer spending and entitlements. None of this increases productivity.
Obamacare is yet another entitlement adding to the mounting pile of debt. It doesn't contribute to factor productivity, so without raising taxes it simply increases demand on future income.
Employing 1 government worker costs considerably less than 1 million government workers. And where do you suppose the salary for the 999,999 extra employees comes from? You don't see the link? I'll help you: taxes. And who do you suppose pays those taxes? I'll help you here again: consumers and employers.
Now as you increase tax on consumers, you decrease their spending power. When consumer spending power is decreased, demand falls. When demand falls, businesses don't produce product. When businesses don't produce product, they don't employ people.
Now let me ask you, when demand falls and you add and increased tax burden on employers, what do you suppose happens? Do you think they suddenly decide to hire more people?
good post.
i would add that part of the reason that we did so well after WW2 is that we actually entered the war late, had less destruction, and had better manufacturing capability when it was all over
location was a very good thing for us then.
people need to remember that it is the private sector that funds the government sector and without a strong private sector there will either be a smaller government sector or a government sector by force.
the more interest we have to pay on the debt, the more money that is literally transferred from private sector development to pay increasing interest charges.
i really like this simple explanation of where we were and where we are now.
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