23 Dec 14
Originally posted by EladarIf it's good, the government cannot do it and the market can. If it's bad the government is powerful enough to be the reason it happens, not the market.
That's your problem, you think such things can be ensured as long as the government is doing it.
All you can really do is put into place good policy and let the market do what it will.
Bringing in slave labor to undercut your work force's wages isn't good policy, at least for those who are working.
But hey, coming from Europe I can see why you don't think working is so important.
e.g. All immigration is not only a government decision but a personal choice of Obama himself. The market cannot be the reason so many people migrate surely?
But no you think government should control the movement of people while liberating from all control the movement of capital. So you want a powerful government that is powerless and a free market that is controlled by the government and a pig that flies.
23 Dec 14
1 edit
Originally posted by sh76A government has two main ways to do so, if it wants to.
Is this going to be one of those cryptic things that sounds completely ridiculous but you don't bother to explain because it's beneath you to state the obvious?
If so, I'll bite.
How?
The first is to directly expand the workforce by hiring more people.
The second is to subsidize labour in the private market by giving tax credits to individuals and/or companies. A free market will generally not hire enough people (to optimize the productivity of the labour force), because companies don't have to pay the cost of unemployment.
To pay for these measures, a government has to raise taxes, which in principle depress consumption and thus lead to a reduction in the private sector labour force. All a government has to do, if it wants to maximize employment, is tax the kind of consumption that provides relatively few jobs.
23 Dec 14
Originally posted by KazetNagorraMany governments do all of that. It doesn't necessarily lead to full employment. The private sector has to be generating jobs because the economy is productive. The government can't subsidize enough to convince employers to hire when there is no need for the labor unless it subsidizes 100% of the workers' salary. Not to mention, of course, that government resources are finite, no matter how much it taxes.
A government has two main ways to do so, if it wants to.
The first is to directly expand the workforce by hiring more people.
The second is to subsidize labour in the private market by giving tax credits to individuals and/or companies. A free market will generally not hire enough people (to optimize the productivity of the labour force), because ...[text shortened]... wants to maximize employment, is tax the kind of consumption that provides relatively few jobs.
23 Dec 14
Originally posted by KazetNagorraInteresting? Just what Lord Keynes said would fix the Great Depression unemployment, and which both Hoover and Roosevelt did, but which failed miserably in reality.
A government has two main ways to do so, if it wants to.
The first is to directly expand the workforce by hiring more people.
The second is to subsidize labour in the private market by giving tax credits to individuals and/or companies. A free market will generally not hire enough people (to optimize the productivity of the labour force), because ...[text shortened]... wants to maximize employment, is tax the kind of consumption that provides relatively few jobs.
".......companies don't have to pay the cost of unemployment."
Perhaps you meant that the cost of unemployment is lower than the cost of unproductive, or useless employment (paying people to do nothing).
23 Dec 14
Originally posted by KazetNagorraYou forgot one other way the government can subsidize business: social programs.
A government has two main ways to do so, if it wants to.
The first is to directly expand the workforce by hiring more people.
The second is to subsidize labour in the private market by giving tax credits to individuals and/or companies. A free market will generally not hire enough people (to optimize the productivity of the labour force), because ...[text shortened]... wants to maximize employment, is tax the kind of consumption that provides relatively few jobs.
If the government is picking up the tab (health care, food stamps) then the employer doesn't need to pay its employees as much.
Social programs, smoke and mirror business subsidies. This is why a Socialist is little more than a Facist. A dictionary may disagree, but the dictionary isn't very good at seeing through smoke and mirror tricks.
24 Dec 14
Originally posted by sh76Few governments subsidize low-paid labour (e.g. through negative income taxes). It's by the way an idea that even Milton Friedman supported, so maybe you ought to like it as well. There are plenty of jobs which are sensitive to this kind of subsidy, mainly in the service sector.
Many governments do all of that. It doesn't necessarily lead to full employment. The private sector has to be generating jobs because the economy is productive. The government can't subsidize enough to convince employers to hire when there is no need for the labor unless it subsidizes 100% of the workers' salary. Not to mention, of course, that government resources are finite, no matter how much it taxes.
24 Dec 14
2 edits
Originally posted by KazetNagorraThe United States has a negative income tax on low paying jobs, especially for people with families. It's called the earned income tax credit. While, alas, I make too much money to qualify, a close relative of mine with her large family and moderately paying job pays negative federal income taxes each year.
Few governments subsidize low-paid labour (e.g. through negative income taxes). It's by the way an idea that even Milton Friedman supported, so maybe you ought to like it as well. There are plenty of jobs which are sensitive to this kind of subsidy, mainly in the service sector.
http://en.wikipedia.org/wiki/Earned_income_tax_credit
The EITC may help, but it doesn't create the jobs on its own. It's a factor, but a relatively small factor in the grand scheme of things.
24 Dec 14
Originally posted by sh76Obviously, how large a factor it is depends on how large the scheme is.
The United States has a negative income tax on low paying jobs, especially for people with families. It's called the earned income tax credit. While, alas, I make too much money to qualify, a close relative of mine with her large family and moderately paying job pays negative federal income taxes each year.
http://en.wikipedia.org/wiki/Earned_income_tax_cred ...[text shortened]... the jobs on its own. It's a factor, but a relatively small factor in the grand scheme of things.
25 Dec 14
Originally posted by KazetNagorraThe tax credits have not gone down during job destroying recessions and have not gone up during the eras of no unemployment. While lack of correlation doesn't prove that a bigger tax credit wouldn't help, given the absence of correlation and the common sense principle that people don't hire merely because of a tax credit, I think the burden is on the proponent of the idea that government can ensure full employment.
Might you also have a reason for thinking so?
25 Dec 14
Originally posted by sh76Negative income tax? How about all taxes?
The United States has a negative income tax on low paying jobs, especially for people with families. It's called the earned income tax credit. While, alas, I make too much money to qualify, a close relative of mine with her large family and moderately paying job pays negative federal income taxes each year.
http://en.wikipedia.org/wiki/Earned_income_tax_cred ...[text shortened]... the jobs on its own. It's a factor, but a relatively small factor in the grand scheme of things.
When you calculate that negative income tax you need to throw in social program payments as well. You can then put all that money in the category of corporate welfare since most people who collect his money work for companies like Walmart.
25 Dec 14
Originally posted by EladarThe difference between a negative income tax and other welfare is that a negative income tax is specifically tied to positive earnings. You don't get the earned income tax credit unless you make money.
Negative income tax? How about all taxes?
When you calculate that negative income tax you need to throw in social program payments as well. You can then put all that money in the category of corporate welfare since most people who collect his money work for companies like Walmart.