Can the economy really be "fixed?"

I accept the lack of logical stand-point. I'm just not up to scanning the archives for a single post which stands out in my memory.

And I acknowledged the standpoint you were making, before re-iterating my point that spending-in relation to overall income-increases as income decreases.

So? I mean, not to be rude, but that would seem obvious. You'll have to explain yourself a bit more.

My point that giving money to the poor is more effective at stimulating the economy than giving money to the rich.

And its not that you spend a proportional amount as your income increases. The proportion you spend decreases as your income increases.

Make 40k per year, you spend, I don't know, 80%? Completely taking the numbers out of the air for purposes of explanation as to what I mean.

Make 80k per year, spend 60%. Make 120k per year, spend 40%. and so on. Its easier to spend less when you have more.

edited 29th Nov '11 7:59:22 PM by Enkufka

Woah woah woah. Hold on there. That's quite a leap, build your metaphorical ladder first.

Edit: If my (admittedly opaque) metaphor there threw you, I mean show me your logical process.

edited 29th Nov '11 7:58:09 PM by TheEarthSheep

So a highly paid surgical specialist is poor and a struggling small business owner is rich?

edited 29th Nov '11 7:58:29 PM by BigMadDraco

@OP,

Can it be fixed? Certainly. Will it be fixed, though?

Probably not.

My ladder was built in a previous post, so I shall repost it here: "If people had more money, they would buy more. If they bought more, the businesses could pay people more, or hire more people. If more people had more money, they could buy more."

while it is true that spending on the rich nets an increase, it has been shown that it is a smaller increase than spending on the poor. This senate testimony has a chart about spending and the multiplicative effect of it compared to a single dollar. less than 1 dollar is losing money, greater makes money back.

What? You found an exception to a rule?! We must inform the Council! *runs off*

Ok, I grant that giving money to poor people could feasibly strengthen the economy, but only in the short term. No one is making a career off of the ten dollars Washington sent them, but millions of careers can be made by a single wealthy individual with a half-decent idea.

And that guy with a half-decent idea relies on the $10 those guys got back. I'm not arguing for a purely socialist state, I'm just stating that there also has to be a focus on the consumers/employees, because you will always get more custom from the more numerous employees than you will from the less-numerous-yet-richer employers, except in very select industries which sell luxuries.

No he doesn't, any really groundbreaking idea these days is either a luxury, which we've already determined the poor will spend their money on, stimulus or no, or a way to do something that people already buy more efficiently, and neither of those requires any more wealthy of a consumer base.

I'm thinking luxuries in which the laws of supply and demand begin to break down, such as incredibly fancy cars, luxury boats, and so on.

Certain electronic devices such as TV or internet-enabled devices are not luxuries, as TV is used for information, and computers enhance productivity, as well as open up opportunities which were not available to them otherwise.

I, lastly, am more referring to businesses which already exist which are floundering due to lack of paying customers, such as small businesses, rather than a new business which is exploring a new niche. You changed meanings between posts.

EDIT: and your post previous to post did not mention "groundbreaking" ideas, merely half decent ones. There's a lot of room for new businesses with a half decent idea, and they don't necessarily sell luxuries or move things in new ways.

edited 29th Nov '11 8:23:34 PM by Enkufka

What.

T Vs and Computers are very much luxuries, and T Vs are certainly not used for 'information'. If you need a computer for your job, it doesn't really count, but then it would be provided for you buy that job, so it doesn't matter.

And I'm sorry that my conversational and hyperbolic tone confused you, I'll be sure to be completely dry and uninteresting from here on out. I referred to ideas that can make "millions of careers", which is in no way related to floundering businesses.

Local news. That's information. Further, a single television can run less than $200. that's less than a dollar per day for entertainment every day of the year. Large televisions, however, are a luxury item. That I will grant you.

And not every job which requires you to have a computer provides you with a computer.

edited 29th Nov '11 8:35:58 PM by Enkufka

Believe it or not, Newspapers still exist, and you can buy them for like, one quarter. That's less than 25 cents a day for a year. Besides, while the television itself may be less than $200, buying actual cable/satellite will be at least that much per year. Newspapers are not luxuries, televisions are.

Everyone I have ever known to work with computers on a daily basis for their work has had a computer provided for them. While I'm sure someone at some point has had to buy their own, that's not the norm.

Fine.

I doubt this discussion will go anywhere useful, since we drifted away from the "Support the rich or support the poor" discussion, which was drifting off of the thread topic.

If the median topic, the "Rich or Poor" discussion, is infact on topic, then I have a question:

Should we support the established rich? Or should we encourage entrepreneurship? Because they are two very different things.

And infact, one of the means to help the economy is a tax-credit based on hiring. It returns something like $1.30 for every dollar spent. But with stipulation, of course.

-citation needed that trickle down economics work please-

One thing I don't understand: people keep portraying the rich as deliberately destroying the economy by hoarding wealth, but why would anyone want to hoard wealth if it meant destroying the economy? It's better to be slightly less wealthy if it means you have more and higher-quality goods available to buy. (I have a feeling that whoever's to blame for the economy, whether rich or not, doesn't actually realize they're to blame.)

edited 30th Nov '11 12:49:03 AM by feotakahari

You're underestimating the power of greed, here. Many of the super-rich tend not to see anything beyond the bottom line.

edited 30th Nov '11 12:56:23 AM by tropetown

A collapsing economy means cheaper workers, means a better profit margin.

Which is why you have National Minimum Wage laws.

It's less that the rich are greedy (though many are I'm sure) it's that they are only looking at the immediate rewards, they honestly didn't think their stupid plans that are crushing the economy could come around and hurt anyone. "I'm just doing this" and "I'm just doing that," it all adds up, and they don't know when to quite.

Personally I think our bad economy is intrinsically tied to the lack of confidence in the government because it won't freaking do anything. This super-comittee was bullshit from the start, NO ONE in the public thought it could work because it's completely made up of those assholes that were holding it up before. If the government would visibly do something even if in the end it didn't do much, that would restore a lot of consumer confidence. Right now people are digging in and not spending money because at the rate the government is going this thing will last forever and they can't see any way out other than to save up. You know, on top of not having a job to really spend money from anyway.

edited 30th Nov '11 1:07:27 AM by NoirGrimoir

That also applies for businesses as well — if they don't have confidence in the Government, then why should they invest money? If they can't be assured that the country won't get worse, they won't spend anything...

After all, it is less risky to save money than to spend it.

Businesses invest or don't invest on the basis of demand for their goods. Not whatever government happens to be fiddling with. Blaming government this and government that for business confidence is flat wrong.

edited 30th Nov '11 6:42:27 AM by Fighteer

41: It's funny because immediately after I said that, I citationafied it with the whole WWI/WWII thing.

43: Actually, while I acknowledge that a lot of wealthy people are greedy (that's how they became wealthy, after all), they still listen to financial advice, and I think they almost always hire professional economists (you know, with degrees and such) to give that advice.

45: The average worker is making much more than minimum wage, which means their employers actually have a fair bit of leeway to drop before wages hit the minimum.

Edit: , if the government decides to tax foreign sugar imports (which they do already, tremendously), then it's smart to invest in domestic corn syrup manufactures. Which is why the government taxes foreign sugar imports. Economies can be controlled surprisingly easily.

edited 30th Nov '11 6:55:04 AM by TheEarthSheep

Show me because I have data which suggests that trickle down economies failed to trickle down and only increased the wealth of those at the top.