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Lets say that some poor working dude got fed up with working and robbed a bank and got millions from his crime. Then he invested it in stocks and quit working, spending all of his time looking at porn magazines. Some would praise the guys merit's because he is now a "capital provider" claiming that because he has the financial ability to fund businesses he is now more productive than he was when he was just a worker.
Did he actually do anything to improve production? Actually, all he did was transfer control of wealth from the bank to himself. He produced nothing and no additional production will result in his actions. If anything, but quitting working, he is impeding production.
Now after a few years, he is feeling guilty about his crime so he goes back to work and donates all of his money to a wino on the street who does nothing with the money because he is happy being a wino. Is the bank robber now somehow less productive since he is no longer a "capital provider" and has gone back to his lowly job? Is the wino somehow now more productive since he is now considered a "capital provider" - even though he is still a wino?
Lets say that the bank robber now gets paid more at his job (the same job he had before he robbed the bank) because his employer things that he is a good person for giving all of that money away to charity. So does the fact that the former bank robber now makes more money indicate that he is more productive than he used to be?
What if the bank robber gave the money back to the bank, would the bank employees suddenly have became more productive just because the bank now shows a big windfall profit due to getting the money back?
And would it make any difference if he got rich by inheriting money instead of robbing a bank? What if he won the lottery instead? Or if he became a CEO of his mom's business and was paid $10 million bucks before he was fired for being not doing his job? What if he got rich from being in a commercial for the company that he worked for (I once had a roomate who was paid a fairly good size amount of money for doing a Holiday Inn commercial - he was selected just because he had the right "look" for the part and they wanted an actual employee to play the part).
I have a question.
If corporations are outsourceing more , wouldn't that be considered transferring wealth from American labor to cheap foriegn labor?
Wouldn't that be considered conterproductive due to the loss of tax revenue and consumer sales?
I have a question.
If corporations are outsourceing more , wouldn't that be considered transferring wealth from American labor to cheap foriegn labor?
Wouldn't that be considered conterproductive due to the loss of tax revenue and consumer sales?
Was there some point to all this?
Most of these scenarios being posited have little or no relation to the real world. If there's something of substance you're trying to say be so kind as to spill it.
Are you trying to equate inheriting money to bank robbery? The two are not related. In one case money is obtained by theft. In the other case the money was earned by a parent; the parent earned the right to dispose of that money as he saw fit due to working for it - and chose to will it to his child. The two are not at all comparable.
...personally, he's productive, but as far as the economy is concerned he's impeding production.
doesn't it depend on how he has allocated those capital resources?
if he leveraged them to expand business activity, employment and profitability above what would have otherwise existed but for his allocation of capital, how could his efforts not be found productive?
I have a question.
If corporations are outsourceing more , wouldn't that be considered transferring wealth from American labor to cheap foriegn labor?
Wouldn't that be considered conterproductive due to the loss of tax revenue and consumer sales?
To have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy.don't see it being counterproductive from the perspective of the employer
the outsourcing will likely result in greater net profits
No, not allowing the natural, ie more productive cheap foriegn labor would be counterproductive for the most part. Maybe in certain situations you could make the case, but by and large it would be more beneficial to allow for outsourcing. That way we can specialize in things we have comparative advantage in domestically.
Depends on what economy you are looking at. If it is cheaper for the company to outsource overseas, then it is certainly more productive for them to do so (microeconomically). If an overseas company is more cost effective, then they are likely more efficient, so if they increase their sales, that would tend to represent a total increase in productivity for the world. But most certainly it would be counterproductive if we are just looking at US tax revenue and jobs.
To have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy.
All governments, federal, state and local depend on tax revenue.
Most tax revenue is taken from paychecks.
Less paychecks less tax revenue more budget cuts.
Any state in America is run basicly the same way as a corporation .
When a corporation cuts the budget as much as they can they will ask for cheaper labor, states will ask for more taxes property right down the line to sales tax.
The same with federal , nobody from middle class down would stand for a tax raise while rich are getting tax cuts.
So in the end everybody looses that has money.
Well, outsourceing has increased and what has America specialized in cellphones?
That was the #1 technology project in 2004 I don't think America has had one since.
And where does an increase in outsourceing leave America shelling out bailout money to keep American corporations afloat, more unemployment in manufacturing, less tax revenue, a lot of debt and printing money we don't have.
Globalization is supposed to be a competition of nations not a money machine for the rich.
To have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy.
But there are lots and lots of consumers that don't have jobs. You don't have to have a job to have access to money. My 17 year old is a consumer, yet he doen't have a job. I am not so sure that Paris Hilton has what you may call a job right now, but she certainly purchases stuff. There are lots of retired people who are consumers, but if they are retired, then obviously they don't have jobs. I think that only something like 1 out of 3 Americans have jobs, but almost everyone over the age of 10 or 12 makes purchasing decisions and spends money.
And businesses can also increase their net profits in other ways other than increasing sales. They can raise prices, or operate more efficently, they can reduce their cost of products (ie outsourcing), or start scamming people.
Outsourcing is generally good for individual businesses and consumers. Otherwise we wouldn't outsource.
It is also good for the global economy, it lets countries that are capable of being very efficent producing certain products to concentrate on producing those products instead of having to produce a little of everything. Like Brazil has the climate to produce abundent coffey, but maybe they arn't good at growning wheat. So we outsource our coffey needs to them and they outsource their wheat needs to us.
Only when you look at a particular countries economy is outsourcing bad, but if the outsourcing between two or more countries is mutually receiprocated, it can be benefical to individual countries also.
Sure, but if our production is increased because foriegn countries purchase products from the US, then in terms of taxation, outsourcing can be neutral.
This is beside the point, but personally I would prefer to see us base our tax needs less on income and sales tax and more on inheritance tax. Inheritance tax in leu of other taxes is basically a tax deferance where we tax people after they are dead but let them keep more of their earned income while they are alive. I'd much rather pay when I am dead than to have to pay now.
you have left out instances where the business offers multiple products and/or is able to sell its goods at higher margins; both measures might be expected to generate additional profits without an increase in the market share
you should also recognize that consumers needn't be wage earners. they might be pensioners, or affluent, other businesses or government buyers ... none of which are job dependent
but i was responding to your inaccurate rebuttal found immediately below:You sir have left out much more than I.
i explained why business to business sales are not dependent on one's jobTo have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy.
that litany has nothing to do with my post, causing me to wonder if you have any real sense about what you are attempting to expressYou have left out the American labor force, Tax revenue taken from paychecks that no longer exist, a declining real estate, an increaseing debt, the elderly that paid into Social security and now want it back, productive sales.
again, you present something which had absolutely no bearing on our discussionExample top 5 car sales in America 4 out of 5 foriegn based.
you continue to interject references to internationally produced goods that had absolutely nothing to do with the dialogue in which we had engagedRetail sales, Wallmart a majority of products based outr of China
and tell me again, what does this have to do with your assertion (and my rebuttal to your argument) that "To have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy"?I say again sir, if globalization is a competition America is losing.
again, i ask, what does this have to do with your inaccurate point that "To have greater net profits you must have more consumers, consumers have jobs or they are not consumers and don't buy?At present China is working on an updated version of internet computers at a cheaper price.
The two are not at all comparable.
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