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Economics : A Postmortem Necessary Comments on Paper V: A look at Transfer Payments, Trade Deficit and lack of Infrastructural Investment in Government Spending by Cherrie Lynn Lipsett & Sophia Barkat This is a discussion following Sophia Barkat's paper: http://quietpoly.com/juryfury/debates/self-society/postmort5-depressionandg.html Cherrie Lynn Lipsett comments start off the discussion and Sophia Barkat's responses to those follow. Comments on Paper V by Cherrie Lynn Lipsett First how you defined GDP is how we defined GNP when I was in economics and I can't believe they have changed that. How we defined GDP was the same except minus the net import-export figure- so that in a way makes the rest of your piece null and void until we figure out what is GNP and GDP and correlate the two between ourselves at least. Next you can not use old antiquated economic theory on our present economy because old antiquated economic theory (pre 1975 or 1980 actually before we really felt the pinch of exporting jobs and saw the old economic theory not work) assumes we produce most of what we consume which we do not do any more so therefore how we boosted the economy in the past will not work now. We have to come up with completely new theory. I will just offer some examples of why old theory won't work any more. Lets start with the great depression of the thirties. As you correctly stated the government spent more and helped pull us out of it. Now lets get down to nuts and bolts on how this actually worked. The government made direct payments to people (at that time mostly if not almost totally men as women's place was still in the home) to do jobs. The rate of direct payments to do work is almost in the same ratio, I believe, as the government makes payments to people to do nothing but spend and help keep the economy going today. Now even direct payments for work creates more "economy" or put another way the money turns over more in the economy than direct payments for doing nothing. But direct payments for work does not create as much "economy" or demand or turns the money over as many times in the economy as during the 30's or even the 40's, 50's or 60's. Why? BECAUSE WE DON'T MAKE WHAT WE BUY OR MOST OF IT!!! Now when people were put to work in the great depression by the government they built infrastructure which added to the country's wealth just as on a balance sheet buildings are added wealth. Now these workers need supplies to do the building with and these supplies were manufactured in the United States thereby boosting (I) gross domestic private investment. AS COMPANIES FOUND MORE NEED FOR THEIR GOODS THEY INVESTED MORE IN THE PRODUCTION OF THESE GOODS IN LABOR AND REAL ASSETS. But just as now demand for these goods had to come first. The demand was created by government putting people to work building needed infrastructure. Lets just say back in the 30's for each five dollars the government invested in labor and materials to build infrastructure ( a real asset and does create nationally wealth) there was a $10 increase in value. I don't know what the figure was and don't know where to get the figures but if we can get the right figures I know how to figure the correct amount. Now what I am trying to say here is for each $5.00 invested the government got infrastructure and also private companies invested in more infrastructure to make the materials the government needed so therefore for each $5.00 invested by government we got a total return of $10 in real assets. Now we also had more labor being paid not only by the government but also by private companies who had to produce more for the government to use and these people being employed bought products also almost entirely produced in this country so there fore that put smaller consumer goods companies back making things and investing in more capitol expenditures and hiring more people or should I say men. WELL NOW FOR EACH 5 DOLLARS THE GOVERNMENT INVESTS WE GET MAYBE A 1 DOLLAR RETURN. I don't know what the exact ratio is but I know it is less now and I can prove to you it is less but can't give you the figures but as I say if we can find the right figures I can figure the ratios. You ask why. Well now payments are mostly direct payments for doing nothing the government gives people which they just use the money to buy consumer goods which are mostly made overseas except for food. So we are helping put other countries labor to work and helping their domestic capitol investment instead of our own. So therefore the money does not turn over as many times in the economy creating more wealth but disappears overseas to buy goods to import to sell to Americans. All we help is the service industry to hire more people to stock shelves and as sells people and these are low paying jobs and therefore the employees pay little or no taxes to help the infrastructure of our economy and they have little money to spend to keep the economy going. Even if we were to put people to work by the government creating infrastructure most of the products they buy would be made overseas and this would only help the service sector. Any way I think you probably get what I am saying -- WE DON'T PRODUCE WHAT PEOPLE BUY. Therefore even if the government pumps more money into the economy the money just goes over seas to help other countries put people to work and build factories and help other countries domestic private investment and ultimately government spending on infrastructure. So therefore the government pumping money into the economy does not produce the same return on investment it did before 1980 lets say. LIKE I SAY THE OLD ECONOMICS ARE WAY OUTDATED AND IRRELEVANT FOR OUR PRESENT ECONOMY. But even in the old economics demand was created by the consumer whether the government or individuals before there was domestic private investment. THAT WAS ALWAYS TRUE AND WILL NEVER CHANGE. That is what gets me about the republicans saying domestic private investment has to come first and trying to help industries hire more people first and building the economy that way. THE ECONOMY HAS NEVER BEEN BUILT THAT WAY!! IT JUST SHOWS HOW DUMB THESE DOCTORATE DEGREED PEOPLE ARE!!! I might only have a bachelors but I am intelligent and can logic and reason. If a doctorate's degree in economics means you have to be dumb I don't want it. Now we can in the short run increase consumer spending and therefore GDP by increasing the minimum wage but that is only a short term fix and something else has to be done for the long term. I don't see driving our income levels down to third world levels as the capitalists recommend (expect their wages of course) as a remedy. I don't think any of us want to live in a third world country and that is what we will become in everything if wages are driven down to third world levels. It has to follow as we will collect less tax revenue and therefore can do less socially and infrastructure programs and therefore over time our country will look like any other third world country. THE ONLY ANSWER IS TO DRIVE WAGES UP IN THIRD WORLD COUNTRIES THEREBY HELPING US AND THE RESIDENTS OF THESE THIRD WORLD COUNTRIES. But of course the capitalists don't want that. Their companies don't make big profits then. The capitalists are the traitors and terrorists and have done more damage to the United States than the terrorists ever did at the world trade center ordeal. If we raise the minimum wage it will have upwards pressure on wages- but at a decreasing rate -to those wages up to 15.00 an hour. This will allow a lot more consumption and the money to turn over more times in the economy but here again mostly only in the service industries. Now the right wing GREAT (?)DOCTORATE DEGREED ECONOMISTS say it does not matter whether you put the money in at the top level of the economy or the bottom it does the same thing- money is money. THEY JUST SHOW THEIR IGNORANCE AGAIN HERE. And I will give examples to prove my point. A rich person will buy lets say a $100 pair of jeans where a poor person with that same $100 bucks will buy 5 pair of $20 jeans and it takes the same number of people to produce a $100 pair of jeans as to produce one pair of $20 jeans. Any fool with a third grade education can see that it takes a lot more people to produce 5 pairs of jeans as one. So you say the jeans are made overseas so it doesn't matter any way. Well it takes more people to sell 5 pairs of jeans and to stock 5 pairs of jeans on the shelves as one also and it takes more stores and more space to hold 5 pairs of jeans than one. I CAN NOT GET OVER HOW DUMB THESE RIGHT WING ECONOMISTS ARE!! THEY NEVER CEASE TO AMAZE ME IN THEIR IGNORANCE. I CAN'T BELIEVE THEY EVEN HAVE A HIGH SCHOOL EDUCATION MUCH LESS A DOCTORATES IN ECONOMICS. Plus most people at the upper levels of income have all the disposable goods they need so the money isn't even circulated in the economy if put in at the top. About half to 2/3's is just put in a black hole and never circulates in the economy. So much for big wages for the wealthy and tax cuts for the wealthy to spur the economy. Looking at Cherrie's Comments on Paper V by Sophia Barkat Cherrie's comments were great. It's to my understanding that Cherrie made the following points: 1) Too much G goes to Transfer Payments: You're right. A huge portion of Government Spending goes to Transfer Payments since 1975. : http://quietpoly.com/juryfury/debates/self-society/postmort5-depressionandg.html "The 70s marked a sharp increase, transfers again becoming almost 1/3rd of all payments, and in the 80s and 90s the ratio is more or less the same." I should look into what these Transfer Payments are in a future article. I always get confused between this and money that's given away for public programs, like public schools etc. It's interesting to note that Transfer Programs going up would make one think that more people are eligible for them today than before. Perhaps they are a way of making sure that "inferior consumer goods" get bought thus creating demand where there is not. Perhaps transfer payments have gone up because producers and distributors of such inferior goods have established business relationships with State and Local officials who handle Welfare programs. Just last week it was all over the news. Some baby-food distributor -- Arab actually -- was arrested and is being accused of selling illegal baby-formula to Arizona's Welfare programs. He of course, denied the food being illegal, saying that the Welfare Programs often pay more for such goods than what the market offers. This got me thinking. Because recently I wrote about Howard Deans Health Care proposal, and asked the same question to the group. He's asking tax-payers to pay more for each person covered by the health-care than what I pay for mine under my Blue Cross Blue Shield Plan which is excellent. It begs the question why Government Programs buy products at higher prices than at market. 2) Transfer of Jobs to Third World: Cherrie said: "Now when people were put to work in the great depression by the government they built infrastructure which added to the country's wealth just as on a balance sheet buildings are added wealth. Now these workers need supplies to do the building with and these supplies were manufactured in the United States thereby boosting (I) gross domestic private investment. AS COMPANIES FOUND MORE NEED FOR THEIR GOODS THEY INVESTED MORE IN THE PRODUCTION OF THESE GOODS IN LABOR AND REAL ASSETS." This is quite interesting actually. In the article, I summarized Bureau of Economic Council data and said: "The rise in G has also compensated for the fall in Net Exports, with Net Exports turning negative in the 1975 and never going positive again, as the US became a net importer. This was a time of sharp increases in G as well." Funnily enough, since the 70s the US has shifted from manufacturing to Services. One reason could be to lesson the impact of OPEC on the growth of the Economy. Another could be the availability of cheaper labor in the Third World. However looking at the example of UNICOR, the Federal Prison Industries Inc. run by the US State Department, it seems that the actual rival to US jobs is US prison jobs, and that is probably why people doing marijuana are dumped in prisons where as CIA managed to finance its operations based on selling such illegal drugs. I hear that the US is a net importer because it is way cheaper to buy these "Intermediate Goods" from Mexico, China or India than it is to make them here, and so the companies who buy Japanese stereos for cars, or Canadian lumber for paper, just prefer to go elsewhere to hire people -- even to Unicor. I think the US State Department is to blame for this. They say Unicor is good because it keeps prisoners employed. Well, if the wage disparity is employing people in prison where as people outside can't get jobs, then perhaps, the wage disparity should be removed. I mean, paying prisoners $0.23 - $1.15/hr sounds inhumane anyway, and to use an excuse of redemption and punishment to make profits on blood money doesn't make the US State Dept look any better than Kathy Lee's sweatshop. 3) Government no longer spends on Infrastructure: Cherrie said: "But just as now demand for these goods had to come first. The demand was created by government putting people to work building needed infrastructure. Lets just say back in the 30's for each five dollars the government invested in labor and materials to build infrastructure ( a real asset and does create nationally wealth) there was a $10 increase in value. I don't know what the figure was and don't know where to get the figures but if we can get the right figures I know how to figure the correct amount." You are right. The nature of G has shifted since 1930s, 40s, 50s and 60s. Now your tax dollar goes to making you a net consumer not a net investor in the infrastructure. Roads and highways have been built and what's left is public education and healthcare -- or so the debate would appear. But the quality of public education is so poor that even spending there looks more like a down-the-drain consumption rather than investment in the future. 4) Are your Tax-payer dollars going to India and Mexico? Cherrie said: "Well now payments are mostly direct payments for doing nothing the government gives people which they just use the money to buy consumer goods which are mostly made overseas except for food. So we are helping put other countries labor to work and helping their domestic capitol investment instead of our own. So therefore the money does not turn over as many times in the economy creating more wealth but disappears overseas to buy goods to import to sell to Americans. " I couldn't agree more. Even though actual Foreign Aid (Transfers) are consistently less than $14 billion/yr. -- 1929-2002 -- jobs have been flowing out to every other nation. There is more to the picture here though. In the case of say Pricewaterhouse Coopers operating in India, they are using Indian labor to win over the Indian Market. Wherever Service Jobs have been created by US companies abroad, they have done so because Sales and Marketing are relationship businesses. Manufacturing jobs are a different case. If IBM operates a European division they tend to think about reducing shipping expenses by distribution channels abroad but also about the long-term consumer market that comes creating jobs. I mean IBM may sound like an American company to you, but it's goal is to grow and make itself better. Not China, nor America nor India. They have stopped being American a long time ago. We cannot blame them entirely either. They are not the US Government. I think the people to blame are the lazy people in Washington who have turned DC into a multinational lobby. Instead of trying to keep American jobs they have gone for the easy buck, stooping so low as to exploit prisoners. But it's true. Manufacturing jobs are being lost to India etc, though I often look at what kind of benefits these have on domestic economies of India etc. Having more jobs is great. Having more taxes is great. Having more money to spend it great. But it's only good if the Indians and Chinese don't end up buying IBM computers vs. some home brand. While Americans are loyal to American products this disloyalty that we have back home towards our own industries in India, Bangladesh etc, where protectionism has given people the illusion that foreign goods are to die for, but local goods are crap -- this enough is why we are poor. Those who have the money spend it on IBMs and such, while home-made goods get no government backing. 5) Government for more Growth, not less Unemployment -- is this Keynesian? Cherrie Wrote: "All we help is the service industry to hire more people to stock shelves and as sells people and these are low paying jobs and therefore the employees pay little or no taxes to help the infrastructure of our economy and they have little money to spend to keep the economy going. Even if we were to put people to work by the government creating infrastructure most of the products they buy would be made overseas and this would only help the service sector. Any way I think you probably get what I am saying- WE DON'T PRODUCE WHAT PEOPLE BUY. Therefore even if the government pumps more money into the economy the money just goes over seas to help other countries put people to work and build factories and help other countries domestic private investment and ultimately government spending on infrastructure. So therefore the government pumping money into the economy does not produce the same return on investment it did before 1980 lets say. LIKE I SAY THE OLD ECONOMICS ARE WAY OUTDATED AND IRRELEVANT FOR OUR PRESENT ECONOMY." Hmm.. Here is where I disagree. I think Keynes and FDR were primarily concerned about creating jobs and building infrastructure and had it right. In comparison the likes of Reagan-Bush-Clinton are part of the new "Service Economy" and new "Multinational Economy". I think if they followed Keynes and focused on long-term growth by investing in people, they could have created an America that was not losing manufacturing jobs and consuming poor public education etc, but one that could create jobs abroad but also create enough at home. Keynesian Economics would work, if less and less money went to Government programs that create Consumers and more to Human Capital. 6) Republicans and Domestic Private Investment: Cherrie wrote: "But even in the old economics demand was created by the consumer whether the government or individuals before there was domestic private investment. THAT WAS ALWAYS TRUE AND WILL NEVER CHANGE. That is what gets me about the republicans saying domestic private investment has to come first and trying to help industries hire more people first and building the economy that way. THE ECONOMY HAS NEVER BEEN BUILT THAT WAY!! IT JUST SHOWS HOW DUMB THESE DOCTORATE DEGREED PEOPLE ARE!!! I might only have a bachelors but I am intelligent and can logic and reason. If a doctorate's degree in economics means you have to be dumb I don't want it." Well, statistics show that even Peace-time Government programs help the economy as long as they develop human capital, employ people, and don't create a nation of consumers. As far as what the Republican Party think, they have a few camps. One camp is the "War Economy" camp -- Cold War proponents. They believe in creating jobs and human capital via defense spending and that's all. The Cold War was WWII transformed into a peace-time product. Another Camp is focused on working for the multinational corporation, that is based in the US and thus pays taxes, gives money for campaign finance and pays the FCC bills. American manufacturing jobs can go to hell, as far as they care. What matters is the big corporations survive because their success means American Stock Markets and your money will survive. And there are those libertarians -- less government in your life, who are grossly misplaced in politics because no party believes in less G. In sharp contrast Democrats have become focused on programs like Education, Welfare and lately HealthCare Reform -- all of which are so poorly done you don't feel like the Government is investing in you but turning you into a consumer of inferior goods and test-drugs. 7) Will Raising Wages all over the world be Enough to bring back jobs? Cherrie said: "Now we can in the short run increase consumer spending and therefore GDP by increasing the minimum wage but that is only a short term fix and something else has to be done for the long term. I don't see driving our income levels down to third world levels as the capitalists recommend (expect their wages of course) as a remedy. I don't think any of us want to live in a third world country and that is what we will become in everything if wages are driven down to third world levels. It has to follow as we will collect less tax revenue and therefore can do less socially and infrastructure programs and therefore over time our country will look like any other third world country. THE ONLY ANSWER IS TO DRIVE WAGES UP IN THIRD WORLD COUNTRIES THEREBY HELPING US AND THE RESIDENTS OF THESE THIRD WORLD COUNTRIES. But of course the capitalists don't want that. Their companies don't make big profits then. The capitalists are the traitors and terrorists and have done more damage to the United States than the terrorists ever did at the world trade center ordeal." This is where I must disagree. I hear this drive-wages up logic to win back jobs from India and China and I only see one thing happening. Poor people remain poor all over the world if they lose jobs because they are not worth it. I don't want jobs to leave India and China. What I want is the US Government to stop telling its people to consume and to stop spending tax-payer dollars on programs that make people consumers of inferior goods via transfer payments. If this happens then it frees up money to invest in better infrastructural programs -- like better public education -- that may not show GDP growth immediately but will create more people not looking for work at Burger King. Another thing to be done is to raise the wages of people in prisons so that if companies want to hire Americans they don't have to punish people outside of jails. Perhaps the tax-burden on corporations is what is at the heart of the problem, and as such giving corporations CONDITIONAL tax-breaks instead of clean tax breaks is what might work to win back jobs for Americans. I think when we mean jobs we usually mean Blue Collar Jobs. If the Government can declare tax-breaks to manufacturing companies that hire Americans instead of giving clean tax-breaks -- as Bush did, more blue collar workers would have jobs. Or simply giving big tax-breaks to Manufacturers might work. Problem is this. Governments have supported large corporations over mom and pop ones, and that's why you hear about American small business success rarely. Clearly size does have benefits if you're in the manufacturing business and that's probably why this has occurred. And then, importing labor has been a cheap alternative to making clothes and stereos for the American people who want to buy more and more clothes and stereos. Essentially, the Government is acting as your Ambassador to the world -- getting your bargain rate shirt from China for a dollar, putting a label on it like Banana Republic and then giving it back to you as you want it. But perhaps if Americans weren't so invested in the next Sale their government may spend the time and energy in more productive things. Cherrie said: "If we raise the minimum wage it will have upwards pressure on wages -- but at a decreasing rate -- to those wages up to 15.00 an hour. This will allow a lot more consumption and the money to turn over more times in the economy but here again mostly only in the service industries. Now the right wing GREAT (?)DOCTORATE DEGREED ECONOMISTS say it does not matter whether you put the money in at the top level of the economy or the bottom it does the same thing- money is money. THEY JUST SHOW THEIR IGNORANCE AGAIN HERE. And I will give examples to prove my point. A rich person will buy lets say a $100 pair of jeans where a poor person with that same $100 bucks will buy 5 pair of $20 jeans and it takes the same number of people to produce a $100 pair of jeans as to produce one pair of $20 jeans. Any fool with a third grade education can see that it takes a lot more people to produce 5 pairs of jeans as one. So you say the jeans are made overseas so it doesn't matter any way. Well it takes more people to sell 5 pairs of jeans and to stock 5 pairs of jeans on the shelves as one also and it takes more stores and more space to hold 5 pairs of jeans than one. I CAN NOT GET OVER HOW DUMB THESE RIGHT WING ECONOMISTS ARE!! THEY NEVER CEASE TO AMAZE ME IN THEIR IGNORANCE. I CAN'T BELIEVE THEY EVEN HAVE A HIGH SCHOOL EDUCATION MUCH LESS A DOCTORATES IN ECONOMICS. Plus most people at the upper levels of income have all the disposable goods they need so the money isn't even circulated in the economy if put in at the top. About half to 2/3's is just put in a black hole and never circulates in the economy. So much for big wages for the wealthy and tax cuts for the wealthy to spur the economy." Again, I must disagree. I think the politicians in DC can shoe-shining for CEOs in the consumer products industry and get away with it because they have successfully created a nation of consumers who don't want good public education enough to say no to Government programs that push so called "free consumer goods and services" upon Americans. If more and more Americans were to say you want : 1) cheaper healthcare, and not tax-payer funded healthcare, 2) better public education and not "welfare food" in school cafeterias, 3) not double taxation of corporate income taxes -- tax on profits and again on dividend tax -- but more people in DC who can induce America businesses to work in the US without sending them to Unicor, 4) and if none of the two parties will make this happen then a third party will be created. then the two parties would have to reform. Democrats are saying they are reforming, though only Kucinich and Sharpton talk about real reform, while Howard Deans and Kerrys talk about increasing tax-burdens on rich people to maintain the consumer nation of the poor. Interestingly, Al Sharpton and Carol Moseley Brown mentioned at the AFL CIO Debate held two nights back about how Health Care Reform does not requires creating new tax-payer programs but that if a universal healthcare program could be created then the system could reduce money wasted on competitive media advertising of drugs. I think that G can be used to help the economy if the focus of government spending shifts to creating better infrastructural goods than just creating markets for inferior consumer goods. by Cherrie Lynn Lipsett re: Sophia's post Sophia wrote: "I should look into what these Transfer Payments are in a future article. I always get confused between this and money that's given away for public programs, like public schools etc." The transfers are not school programs or anything like that- I don't believe. Oh I imagine free lunch and breakfast programs are included in the figure but that is a very small portion of the total amount. I don't know where it stands now but I think Social Security benefits are still the majority of the transfers. I would guess around 50%. The average Social Security payment is, I believe I read or heard some where, about $800 a month. And I think it is something like 50% on Social Security only have Social Security as income. As you can see this is about enough money to pay your utility bills, rent and buy food. This money does not add much to the economy and does not turn over very many times in the economy. Actually people who get $800 a month from Social Security are above the poverty line as the poverty line for one person is $8000 a year. People getting $800 a month are not entitled to a lot of the other programs as they get too much money although they are very needy in my opinion. The Social Security program started in the 40's if I am not mistaken and as more people retire and live longer there are more people on it so therefore more payments going out. The second biggest part of transfers is aid to parents with dependent children, I believe. This program started in the 60's and there should have been a big jump in the transfers after this program went into place. Now what would be interesting to find out is how much of the population in % depends on the federal or state or a municipal government for their income. We also have lumped into Social Security the people who collect disability and collecting disability which the number of people collecting disability has increase drastically since 1980, I believe for reasons I will go into later on. And then we have those who collect income or a lump sum settlement from workers comp. for being hurt on the job plus the people drawing unemployment. I would venture that a 1/3 of our population (citizens) is directly supported by some form of government payment whether federal or state, county or town/city. Now in this figure I am including the people that work for government whether Federal, State, County or Local. NOW THE INTERESTING QUESTION IS WHY DID THE DIRECT PAYMENTS TO PEOPLE GO UP DRASTICALLY IN 75 THE SAME YEAR WE SEE OUR IMPORTS DRASTICALLY INCREASE OVER EXPORTS. You say coincidence- no correlation. I say you are wrong. Why we don't have a lot of unemployed people and the unemployment rate quoted by the government is wrong- it is way to low. Unemployment is around 8 to 9% right now actually and that is leaving out the chronically unemployable. If we include them -around 5%- our unemployment rate is actually around 15%. You take a third of the population living directly of the government and over 1/6 of the population unemployed- you have half the population not working and most of these getting direct benefits from a government agency and that is a prescription for disaster. And I am not including children in this figure, just people old enough to work. Now to the cottage industry in disability. Well we have many children being said to be disabled by teachers who don't want these kids slowing down their classes and the kids and school not making the grade on the mandated national tests. So some doctor who gets a kick back from a drug company for prescriptions prescribed prescribes a drug for the kid because the kid has a disability and then the parents can get the kid on disability and collect $536 a month for the kid because the kid is disabled. Now the kid is on a drug that will screw up the development of its mind not to mention that the kid has the stigma of being disabled and is learning he can make money of this disability and therefore the kid will never develop right mentally and will always be on disability all its life but the parents are happy as they are getting lots of money off this kid each month and the teachers are happy as they don't have this slow kid in their class to bring down grades and the doctor is happy when the drug rep comes and gives him his kick back after seeing his copy of prescriptions written and the kid and government and therefore society as a whole suffers. In some schools 1/3 of the kids have been declared disabled. Now this is the drastic situation and is not true of most schools but you would be as alarmed as I am at the number of kids that teachers and parents are getting declared disabled. Most of these kids suffer from poor parenting- an unstable home life- staying up till 12 at night and lots of sugary foods and they are not really mentally disabled. Just under extreme stress which will make a person- even an intelligent adult - seem dumb. No child should be able to collect disability, as they have never paid into the system! Now on to the correlation between jump in payment to individuals by governments and jump in exports in 1975. Well a lot of jobs have gone out of the country and a lot of these people can't do the jobs left in the country. The jobs they can do have been taken over by illegal immigrants and legal immigrants (who have been allowed to inner the country whether illegally or legally has drastically increased since 1980) who are younger and owners of business think can do the jobs better and are willing many times to do the jobs for less. Then we have the people that do jobs of physical labor and I don't know what % of the population do this kind of work but would like to find out. These people include janitors, trash-collectors, butchers, sales clerks, waitresses and the list goes on and on. I would imagine at least half the population does this type of work. Well you can just count on your job being over at some where between the age of 45 and 55 as you will slow down and the company that you busted your butt for and tore down your physical health for 20 to 30 years will run you off the job or you will severely physically injure yourself trying to keep up and keep your job. Of course the ones that severely injure themselves (about 1/3 of the population of physical laborers I think) end up on workers comp and then disability, making about 35 to 40% of what they made before. This usually comes sometime between 45 and 55 and the kids are going off to college and all the major appliances you bought when you were young have lasted their 20 to 30 years and are breaking and need to be replaced. Some of these people because of the mental stress they are put under trying to keep their jobs while being harassed by the mangers/supervisors to leave develop medical problems from the stress whether heart problems or mental problems and end up on disability. I would say that at least 90% of the physical labor force is terminated by a company after the age of 45 to 55 and many of these people have worked for the company for 20 to 30 years. This is especially true of companies where there is no union and no union is becoming more and more the case. So 1/3 end up on the government direct payment program through disability, 1/3 probably go in for retraining and of those maybe half get a job making the same or better than they did before. The other 15% that go into retraining can't find a job in the field because they are just not good enough at the new training job or there is just not the demand in the field and they take a lesser job making 1/2 to 2/3 of what they made before. The other 1/3 just let the company run them off and take a lesser job making 1/2 to 2/3 of what they made before. Now if these people are already at the low end of the worker totem pole such as janitors or trash collectors they usually can not find another job and end up living off relatives (sons or daughters or parents) or trying to get on disability. They usually get food stamps which in the state of Oklahoma is about $125 a month. These people that had jobs with companies that offered insurance lose their insurance and due to their age and the added stress of their financial situation usually start having medical problems which are paid for by the state through Medicaid. Some have worked for good companies with 401 K's and have back usually around $20,000 to $30,000 for retirement. Instead of paying off all debt but the house with the money they use it to supplement their income thinking something better will eventually come along and use up all their savings in 5 years and still have all the debt and have to file bankruptcy. I live in really Bush and Republican country (very typical of the rural areas of the country that Bush won in and the rural areas of the states Bush won in) 20% of the population is below the poverty level. Not just poor but below the poverty level. I would venture that 50% fall either into the below the poverty level or low income level. And I would venture that 50% live of the government or one of the governments now that includes the people that work for government. This is typical of the Bush republican and the states that Bush won and the areas of the states that voted heavily Bush. Now you would think these people would vote democrat wouldn't you and that is one of the things I am studying out here. What makes them vote Republican? The answers I'm not giving out. Now the working poor in the area are mostly democrats. Sophia wrote: "It's interesting to note that Transfer Programs going up would make one think that more people are eligible for them today than before. Perhaps they are a way of making sure that"inferior consumer goods" get bought thus creating demand where there is not." No, it has nothing to do with making sure people buy inferior goods but making sure our country is a stable country. can you imagine the chaos we would have if half the population was receiving no money to live off any more. Well it wouldn't be half as I have included government workers in my 1/2 that gets their money directly from the different government bodies. The only difference in us and many third world countries is that the government supports the old and the disabled and those no longer able to work. We have a large part of our society that is not employed just as many third world countries have. We just pay ours enough to get by so they don't riot, steal and otherwise cause chaos. INCLUDE THE PEOPLE THE GOVERMENT SUPPORTS BECAUSE CORPORATIONS WON'T EMPLOY THEM ANY MORE BECASUE THEY ARE OLDER -MONEY THAT GOES TO COPERATE WELFARE. The rich business owning Republicans complain about all the direct payments and the people living off government. WELL IT IS THEIR FAULT! THEY HIRE THE ILLEGAL IMMIGRANTS AND WANT HIGHER LEVELS OF LEGAL IMMIGRATION THAT THEY DON'T PAY A LIVING WAGE TO SO THE GOVERMENT HAS TO GIVE THEM FOOD STAMPS AND FREE MEDICAL CARE FOR THIER CHILDREN TO KEEP ORDER IN THE COUNTRY. THE MULTIBILLION DOLLAR CORPORATIONS ARE THE ONES GETTING RID OF POEPLE IN THEIR LATE FORTIES AND EARLY FIFTIES AFTER 20 TO 30 YEARS OF BUSTING THEIR BUTTS FOR THE COMPANY AND USING THEMSELVES UP MAINTAINING EVEN GREATER PRODUCTION PER INDIVIDUAL REQUIRED BY THE CORPORATION. ALL THESE PEOPLE IN MY OPINION ARE GETTING PAYMENTS THAT ARE REALLY COPORATE WELFARE. WE ARE CLEANING UP AFTER THE BIG CORPORATIONS SO AS TO KEEP ORDER IN THE COUNTRY. THEN THESE CORPORATIONS DO NOT WANT TO PAY TAXES FOR THE DAMAGE THEY HAVE CAUSED AND COMPLAIN ABOUT THE MONEY GOVERMENT PAYS TO PEOPLE IN DIRECT PAYMENTS. WELL THESE CORPORATIONS HAVE CREATED THE SITUATION! What do they want us to do kill these people when the corporation discards them? Ever read Animal Farm? and all the while the CEO's of the corporations that put these programs into place are making 400 to 500 times as much as their employees. These are traitors to the United States. They are Social criminals that kill and ruin millions of people's lives. Sophia wrote: "Perhaps transfer payments have gone up because producers and distributors of such inferior goods have established business relationships with State and Local officials who handle Welfare programs." "Just last week it was all over the news. Some baby-food distributor -- Arab actually -- was arrested and is being accused of selling illegal baby-formula to Arizona's Welfare programs. He of course, denied the food being illegal, saying that the Welfare Programs often pay more for such goods than what the market offers." Now you have that right. But not only the welfare programs. We talk about the kickbacks you have to pay in corrupt governments around the world. WELL HERE THIS- IT IS NO DIFFERENT HERE!!!! I would venture that all buyers for government agencies get kickbacks. The school lunch programs- the buyer gets a kick back. Its not that the kids wouldn't eat a good home cooked meal if it was fixed. Its that the buyer gets a kick back from the companies that sells them the fast food products they buy now. The food that is high in fat and cholesterol causing agents that is making our kids fat and have diabetes and heart diseases at a young age. I know the armed forces buyers at the bases were taking kick backs in the 60's and still are as well as every other buyer in the military. My stepfather was a salesman and sold to bases, the PX's, and the only way he could get the buyers to buy was to pay a kick back (sometimes half his commission) to the buyer at the base. Now you know why everything the military buys and other government departments costs so much. The buyers get large kickbacks. I imagine we could strip at least 10% of all government expenditures if the kickbacks would stop. ALL THESE PEOPLE THAT TAKE KICKBACKS ARE COMMON CRIMINALS AND SHOULD BE THROWN IN JAIL! 2) Transfer of Jobs to Third World: Sophia wrote: "This is quite interesting actually. In the article, I summarized Bureau of Economic Council data and said: "The rise in G has also compensated for the fall in Net Exports, with Net Exports turning negative in the 1975 and never going positive again, as the US became a net importer. This was a time of sharp increases in G as well." The increase in government spending was mostly direct transfers to individuals who could no longer work and got themselves declared mentally disabled or tried to keep up and damaged themselves and became physically disabled. These people have to have something to live off. I mean, over 1/3 of our population is elderly or disabled or getting aid to dependent families or some kind of government payment. We would look like any other third world country if the government didn't support these people. Also there was a big jump in illegal immigrants and immigrants in general that started during this period so they took most of the jobs these people could have done. Companies pushed for increased productivity per worker and this left these people out in the cold. We have to keep them from stealing and causing chaos in the country better to give them enough money to eat and have a place to live. It is cheaper in the long run for society but is there another answer besides the government supporting them? I think so. Sophia wrote: "I hear that the US is a net importer because it is way cheaper to buy these "Intermediate Goods" from Mexico, China or India than it is to make them here, and so the companies who buy Japanese stereos for cars, or Canadian lumber for paper, just prefer to go elsewhere to hire people -- even to Unicor." The jobs go overseas mostly due to the difference in pay. The big corporate executives say it will eventually work itself out- the difference in pay- and they are right but at the rate it is going it will take over 100 years and will be too late for the US and its citizens. We will either no longer exist as the government will have already gone bankrupt supporting the people corporations discard or find to slow to meet their productivity demands or we will be a third world country. WE HAVE A WONDERFUL PLAN TO SAVE US THOUGH. IT IS UNIQUE AND BRILLIANT. IT HAS A SHORT TERM AND INTERMEDIATE TERM FIX THAT CAN LAST TILL THE LONG TERM FIX OF EQUALIZATION OF WAGES ALL OVER THE PLANET COMES ABOUT. THAT IS IF WE DON'T BLOW OURSELVES UP FIRST DUE TO WAR OR GOABAL WARMING. More about this unique plan in another email. It will be offered to who ever wins the democratic presidential race and is being discussed with members of the senate now. A lot of excitement about it but it has not been thoroughly vetted out by our economic brains and Nobel laureates in economics yet. The plan is offered to us by the same person who came up with Clinton's economic plan and that was a great success. This true genius I am proud to say is an old friend of mine. I have known him since I was 14 and that is over 43 years. Sophia wrote: "But the quality of public education is so poor that even spending there looks more like a down-the-drain consumption rather than investment in the future." There are many reasons why education is poor. 1. Poor teachers who let children grade each other's papers and call in the grades therefore the teacher never knows what questions most of the children missed and therefore what part of the work the children didn't understand and get. And I could go on and on poor teachers. 2. Children who are not properly parented and therefore can not perform well in school due to the stress they are put under due to the poor parenting. These are the two main causes of the poor performance of schools. 4) Are your Taxpayer dollars going to India and Mexico? Sophia wrote: "I couldn't agree more. Even though actual Foreign Aid (Transfers) are consistently less than $14 billion/yr. -- 1929-2002 -- jobs have been flowing out to every othher nation." This has nothing to do with Foreign aid but is the import figure which has gone up drastically and continues to go up at an alarming rate. The import figure is the amount of money we pay to countries overseas for their goods we import. The import figure is the amount of money going out of the US economy into overseas economies. And if we were to figure GDP right and only include the added value put on these goods in the US as part of GDP and not the total value of the goods including that which we pay to other countries for the goods we would be alarmed at how low our GDP is and the amount of debt we have compared to real GDP. Sophia wrote: "They have stopped being American a long time ago. We cannot blame them entirely either. They are not the US Government. I think the people to blame are the lazy people in Washington who have turned DC into a multinational lobby. Instead of trying to keep American jobs they have gone for the easy buck, stooping so low as to exploit prisoners." I disagree with you here. Yes, the politicians are partly to blame- well deserve a lot of the blame and so does the supreme court who equated money (a possession) to free speech. There is really enough blame to go around for all to take their fair share. BUT THE MULTIBILLION DOLLAR CORPORATIONS DON'T GET A FREE PASS IN MY BOOKS. THEY GET OVER 50% OF THE BLAME! Now you say these companies quit being American years ago and you are damn right. They quit being part the solution- part of humanity- and part of the problem and Social criminals years ago. They are leeches-funguses that are killing their host- the governments of the world and therefore the societies of the world as governments are after all societies of people. These corporations don't live in a vacuum all by themselves. THEY OPERATE IN COUNTRIES THAT HAVE GOVERMENTS! They depend on the infrastructure that these governments of people have created to conduct business. They depend on the peoples of the governments for their work force. They depend on the police force and the laws of these governments to provide them with a secure place to make a profit. THEY THEREFORE OWE EACH AND EVERY GOVERMENT THAT THEY DO BUSINESS IN AND IT IS TIME THEY PAID BACK WHAT THEY OWE AND QUIT BEING FUNGUSES THAT IS KILLING THEIR HOSTS! Corporations have a Social morality and owe to the societies (governments) that they operate within and depend on for their stability (for if a country isn't stable the corporation will not make money) just like all citizens do and the more they make in profits from the form of government in place the more they owe to that government for providing them the atmosphere that enables them to make that profit. NO ONE OR THING SHOULD GET A FREE RIDE AND ESPECIALLY SOMETHING THAT IS GETTING RICH OFF OF SOCIETY! If we say, and all do even Republicans, that people owe to the society they live in- have in fact a vested interest in the society then it follows that all things owe to that society that have a vested interest in that society. IT DOES NOT LOGICALLY FOLLOW THAT A THING THAT OPERATES IN NUMEROUS SOCIETIES HAS NO INVESTED IN AND THEREFORE NO MORAL OBLIGATION TO ANY SOCIETY. WHAT LOGICALLY FOLLOWS IS IF YOU OPERATE IN MANY SOCIETIES AND HAVE A VESTED INTEREST IN MANY SOCIETIES YOU THEREFORE HAVE A MORAL OBLIGATION TO EACH OF THESE SOCIETIES. And if you can see the logic in that then you need to take a course in logical thinking which was offered at the university I went to. And I think anyone getting a high school diploma should be required to take a course in logical thinking and pass it to graduate from high school. Senator Inhoffe never ceases to amaze me when I hear him speak. The number of rules of logic he breaks. He breaks so many you know he had to have studied logical thinking and breaks these laws on purpose. No one could break and screw with the laws of logical thinking the way he does without doing it purposefully. It just confirms my opinion of him. He is a deceitful person and thinks everyone is dumb and can't see through his illogic. 5) Government for more Growth, not less Unemployment -- is this Keynesian?: Sophia said: "I think Keynes and FDR were primarily concerned about creating jobs and building infrastructure and had it right. In comparison the likes of Reagan-Bush-Clinton are part of the new "Service Economy" and new "Multinational Economy". I think if they followed Keynes and focused on long-term growth by investing in people, they could have created an America that was not losing manufacturing jobs and consuming poor public education etc, but one that could create jobs abroad but also create enough at home. Keynesian Economics would work, if less and less money went to Government programs that create Consumers and more to Human Capital." Well you are wrong. The principles of Kenyans economics are based on an economy that produces what it consumes. That is not the type of economy we work in today and the laws of Kenyans economics do not work in today's global society. If you change the principles which you base your theory on it just naturally follows that the theory will no longer work. That is just logic. As I stated the government only gets about $1 now for every $5 invested. This is due to the deep dark black hole overseas the money goes to for imports. WE THEREFORE CAN NOT USE GOVERMNET SPENDING TO GET US OUT OF THIS MESS. All we will end up with is a great deficit! And that brings about inflation and the bankruptcy of the government finally. That is like the guy who was selling shirts for less than he bought them for and upon asking how he was going to make money said sell more. Well to sell more was going to just get him further in the hole. He would be far better off to sell less and have less of a negative cash flow. The only thing we can do in the short term is raise the minimum wage as this gets the most bang (the most turn over in money in the economy) for the least amount of money invested. As I said to sell 5 pairs of $20 jeans rather than one pair of $100 jeans turns the money over the most in the economy. It not only helps the service industries but also the trucking industry as it takes 5 times as many trucks to transport the jeans which means more trucks bought and they are made in the US. Five times as many restaurants being eaten in by truckers, and motels being stayed in, 5 times the labor needed to load the trucks and unload the cargo from the ships, etc. Now this is only a short-term solution but as I said we have an intermediate plan now to last until the long term plan of equalization of wages worldwide comes about and the midterm plan will help to increase the rate of equalization of wages. You can't quit the giving of money to individuals by the government not when over 1/3 of the people depend on these direct payments not unless you are willing to kill these people off as Hitler did. I am not willing to do this are you? Why don't you tell me how these people are going to get money to live off of. How we are going to keep a stable country if we just quit giving 1/3 of the population money to live off of? These people or most have paid into Social Security and workman's comp and the government has a contract with them to provide for them in time of need. The government took this money from these people saying we will keep it for you. We don't trust you to save for times of need. We, the government, will do this instead to make sure it is done. If they had never paid into those programs they could have saved that money and had something to live off of in times of need. The government said we will have an insurance program that all pay into and we will invest and grow this money and then those that need it will have something in times of need and all will have something upon retirement. That way you will have something to live off of when you retire and will not be a burden to society. Government in effect has forced saving for retirement and times of disability upon the population and said they will do this for the population to ensure that it is done and there is therefore a more stable society as all will have something to live off of in times of need as all have to pay into the system. So therefore the government has a moral and Socially responsibility to these people and so do the corporations that used these people up and then spit them out I might add in my opinion. As to people buying inferior goods. I sometimes wonder about you ability to reason Sophia. A $20 pair of Lee jeans is not an inferior goods. A $100 pair of jeans is a status symbol that the rich buy so we all know they are rich. So you suggest that we all be into status symbols? I don't think that is the answer. Then a $100 pair of jeans wouldn't be the status symbol any more but a $200 pair of jeans would be. SOMEONE HAS TO BE ON THE BOTTOM OF THE TOTEM POLE OR ELSE THE TOTEM POLE WON'T STAND! If all have college degrees then the trash-collectors and janitors will be the ones with bachelor's degrees. SOMEONE HAS TO DO THESE JOBS AND THEY ARE ALWASY THE LOW MAN ON THE TOTEM POLE. ALL ARE NOT EQUAL IN MENTALITY OR PHYSICAL ABILITY AND NEVER WILL BE! That is a given. Someone has to do the lessor jobs whether they have a college degree or not. The jobs have to be done. The answer is not for all to get more education as I said the lessor jobs will still have to be done and the ones with the lest education will still do them. The answer is to give these people a living wage and not have them getting insurance for free from the government and food stamps from the government. that is supporting the corporations and individuals who hire these people and don't pay them a living wage. IT IS CORPERATE AND BUSINESS OWNER WELFARE! Who ever came up with this idea that a corporation had more privileges than individuals and none of the responsibilities has done society a great injustice and should be declared as much an enemy of society as Hitler has been. 7) Will Raising Wages all over the world be enough to bring back jobs? Sophia wrote: "I hear this drive-wages up logic to win back jobs from India and China and I only see one thing happening. Poor people remain poor all over the world if they lose jobs because they are not worth it." You're wrong here Sophia. To drive wages up in third world countries to a living wage will only increase the people's buying power and therefore increase spending and some of that spending will go for US goods. Even the old time capitalists knew this. It was Henry Ford who paid his workers more so they could buy his automobiles and therefore increase production of his cars as well as other goods. ALL SHOULD HAVE A LIVING WAGE. THE WORKERS IN THESE THIRD WORLD COUNTRIES DO NOT HAVE A LIVING WAGE AND THEREFORE CAN NOT BUY GOODS. THE CORPORATIONS WANT THIS AND CAUSE THIS AND IT IS A CRIME - A SOCIETAL CRIME! Sophia wrote: "I don't want jobs to leave India and China. What I want is the US Government to stop telling its people to consume and to stop spending tax-payer dollars on programs that make people consumers of inferior goods via transfer payments." As I just stated paying people in third world countries a living wage will not make them lose their jobs. It will make them able to pay goods and therefore increase production all over the world. The best time in our economy was during the 50's and 60's when most were making a living wage. Now all you have to do is transfer this theory to the world rather than a country and the whole world will be in its best period. As I stated the government took money from people so as to provide for them during retirement and times of disability- government can not go back on its promise to these people not unless it wants to give these people all their money back and that includes that put in by businesses for these people plus the interest the money would have made. Sophia wrote: "If this happens then it frees up money to invest in better infrastructural programs -- like better public education -- that may not show GDP growth immediatelly but will create more people not looking for work at Burger King." As I said the government took this money from the people and now owe it to the people. The government said you people are not saving for you retirement or time of sickness or disability so we are going to do it for you and now the government has spent this money they should have put in trust for these people and should have been drawing interest off of for these people. The Great (?) Reagan started this. So the government has stolen this money from the people to run the government and now has great interest payments because not only did it steal this money from the people and use it but it spend even more money it didn't have! THE GOVERMENT CAN NOT STOP MAKING THESE DIRECT PAYMENTS SOPHIA- THEY OWE THEM TO THE PEOPLE. THEY TOOK THE PEOPLE'S MONEY AND WERE TO INVEST IT FOR THE PEOPLE'S RETIREMENT AND TIME OF NEED TO GIVE TO THEM AND IT HAS TO LIVE UP TO ITS END OF THE BARGAIN! Sophia wrote: "I think when we mean jobs we usually mean Blue Collar Jobs. If the Government can declare tax-breaks to manufacturing companies that hire Americans instead of giving clean tax-breaks -- as Bush did, more blue-collar workers would have jobs. Or simply giving big tax-breaks to Manufacturers might work." I see no problem with giving tax breaks to companies that actually produce something and actually put people to work in this country. Now we should raise taxes on the corporations that only have their headquarters in the US and make all goods overseas. They still won't leave the US. Their CEO's and head people want to live in the US. Sophia wrote: "But perhaps if Americans weren't so invested in the next Sale their government may spend the time and energy in more productive things." Well this theory of economy of size is a fallacy also. I thought you said you were an economics major. Obviously you have forgotten all of your basics and just like reading until you have the basics memorized you can't go any further. There is a certain optimal size for each type of business. Anything over or under that optimal size is less economical. And a large 10 story tall headquarters for all the different segments of a business is nothing but a status symbol and a complete waste of money. The one optimal size for each business has to do with fixed costs which all businesses have. As you probably remember from economis and accounting costs can be divided into two categories fixed and variable. Sophia wrote: "Again, I must disagree. I think the politicians in DC can shoe-shining for CEOs in the consumer products industry and get away with it because they have successfully created a nation of consumers who don't want good public education enough to say no to Government programs that push so called "free consumer goods and services" upon Americans." I know of no free consumer goods or services given to the American public. As I stated most of the money going out to Americans in direct payment is money the goverment took from the people by force and siad we will keep this money and invest it for your retirement and times of need because you won't do it. Now the goverment spent that money on other things and your answer and the right wing of the Republican's party's answer it for the goverment to renege on its promise to the people. For the goverment to admit it stole this money from the people and to just let the elderly who have no other income strave to death or to you believe Hitler was right and we should be humane and just put these poor elderly people who worked all their lives to death upon age of retirement or when their bodies or minds are just too worn out by society to funtion any more? I've got news for you if consumers quit spending our GDP will go way down and we will be in a far worst mess as most of our GDP is consumer spending. But it would be best for the consumer if they did spend less. Sophia wrote: "If more and more Americans were to say you want : 1) cheaper healthcare, and not tax-payer funded healthcare, You seem to forget Sophia that there is a legitimate cost of health care now what it is now is way too much. We have to collect enough to pay the legitimate cost of health care. The whole health care system needs to be overhauled and not just patched. The system can not be patched there is too much wrong with it. 2) better public education and not "welfare food" in school cafeterias, The whole school system needs to be revamped and not just patched. it is too broken to patch and while we are at it we have to teach people how to parent so kids can learn. If we have the best education system in the world or universe it does no good if the kids are too stressed from home life to learn. 3) not double taxation of corporate income taxes -- tax on profits and again on dividend tax -- but more people in DC who can induce America businesses to work in the US without sending them to Unicor. We don't double tax corporations Sophia. A corporation is said and has the same rights in fact more than a person so they should pay taxes. the corporation operates within goverment and depends on the laws and policing body of goverment to maintain a stable society so the corporation can make a profit there fore it has to help pay for the climate that allows it to make a profit. Now if a corporation gave all profits to the owners then I could see you calling it double taxation but the corporation does not pass all profits on to the owners. Corporations keep millions and billions of dollars and therefore owes taxes to the goverments that maintain law, order and the climate for these corporations to make these profits they retain. 4) and if none of the two parties will make this happen then a third party will be created. then the two parties would have to reform. Democrats are saying they are reforming, though only Kucinich and Sharpton talk about real reform, while Howard Deans and Kerrys talk about increasing tax-burdens on rich people to maintain the consumer nation of the poor. Interestingly, Al Sharpton and Carol Moseley Brown mentioned at the AFL CIO Debate held two nights back about how Health Care Reform does not requires creating new tax-payer programs but that if a universal healthcare program could be created then the system could reduce money wasted on competitive media advertising of drugs. As I said all Democrats I know want to completely overhaul the health care system and Clinton tried. All Democrats I know feel goverment should keep its promise to the people it took money from. All Democrats I know believe in a balanced budget for the federal goverment. |
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