With the budget wars getting started in both the U.S. and California, I”d like to think that the congress members and legislators were both objective and knowledgeable.
Too bad there is almost no positive evidence.
Job creation is allegedly one of the major goals, but you”d never know it. Employment is a function of demand for a product or service. As demand grows manufacturers For example, empty inventories go to overtime to make use of unused capacity.
And, yes, paying overtime is more cost-effective that hiring new employees.
If demand continues to grow a firm will probably start to hire if there is productive capacity still unused ? a second shift for example.
Where it is practical, there is the possibility of a third shift. Only when there is reasonable evidence that demand will exceed capacity will a firm consider borrowing funds to expand capacity and add staff or perhaps, to subcontract some of the work required.
This sequence takes a lot of time, lacks direction ? recall we like to think we are a capitalistic market driven economy and probably explains why so many studies show that lowering taxes is, maybe, 10-percent less effective than employment driven by specifically created demand through direct government spending and goes a long way toward explaining why the stimulus cash awards were not all that effective.
Problem seems to be that what many consider socialism does the job and the benefit to the whole country benefits through the results of public works. The depression era WPA was neither an accident nor ineffective.
It may be politically incorrect, but the defense department is another good example. And just think how many jobs we created to feel us up at airports. Yet the Speaker of the House told us a short while back that cutting spending would increase jobs. An explanation would have helped.
If this country were a private business, it would be long since out of business. It has been making negative profits since 1998.
The political term is deficits. Businesses don”t have borrowing sources like the Chinese to keep them going along the wrong path. A business would do whatever it could to survive.
Reducing production/delivery costs, raising item prices or reducing their size.
Our people don”t equate taxes with the price for the services it gets.
They don”t really understand the collateral effects of not spending, from the cost to the country”s soul and infrastructure through to the jobs lost by not spending. The goal of business, profit, an excess of income over expenses has been dropped from the government vocabulary along with the concepts of reality, responsibility, objective decision making and the setting of priorities based not on ideology and want, but on what is best for the state of the country.
And, if it ever gets to the point of making decisions and setting priorities, it would be nice to explain the why to the people.
Guthrie “Guff” Worth
Lakeport
