Tell me this, if we are in a global recession and so many countries are in debt. Where has all the money gone?
Well, it got spent, mostly over time on transfer payments, and mostly in bursts on ill-fated attempts to create economic growth through repeated exercises in the Broken Window Fallacy.
If 1% of the population has 95% of the money, how is this good for the economy?
Well, they don't. 95% of the M1 money supply is not held by 1% of the populace. But I think you are asking about the percentage of
wealth held by the wealthy. In which case I would say that relative distribution is much less important than measures like median income. When you look at the wealth of the 1%, you find that it is overwhelmingly in non-cash capital.
The economy works by some one working to earn income, they use their income to purchase goods that they need or want.
That is correct - the economy works through production, which increases supply and, as a derivative, demand.
The money you spent goes to pay people who work at the store you bought it from, so they can go buy things they want and need. The store you bought your goods from buy the goods from the manufacturer, who uses their income to pay their employees so they can buy things they want and need. The key is that money needs to be spent.
....no. Demand is a derivative of supply. The key is that wealth needs to be
produced. Only when you have surplus can it be traded.
So what happens when so few people have money to spend? Essentially if the richest 1% don't spend a proportional amount money on goods they are effectively ruining the economy.
Um. No. It is virtually impossible for someone to store a large amount of wealth so that it is not economically active - the question simply being the extent to which they have stored it in a productive venue. Treasury Bonds < Venture Capital, for example, but both represent ways of taking cash from investors and putting it to work in the economy.
Please explain how a minimum wage hurts the poor.
The minimum wage creates an artificial price floor on labor. The problem being that the price floor is
not the minimum wage, but rather the minimum wage plus taxes plus the regulatory burden that employers face for each individual employee. According to the
Small Business Association, small businesses face a regulatory burden of a little less than $11,000 per employee as of 2008, and a bit more now. For someone working 50 weeks a year at 40 hours a week, that comes out to an additional $5.50 per hour. Then you add in the employer side of payroll taxes (7.65%), and what you see is that the minimum
cost of an employee for an employer is not the minimum wage of $7.50 an hour, but rather $13.58 an hour.
However, employers cannot afford to hire employees at a loss. Doing so would drive them out of business and result in
no jobs. This means that unless your labor is worth $13.59 an hour, you are structurally unemployable. When we talk about our most vulnerable population, we are talking about people with very few employable skills. Your high school drop out who is functionally illiterate who has no work history, no developed set of good work habits, and has no particularly valuable skill sets is unlikely to clear that threshold. That's why we see such incredible unemployment numbers among young urban males.
Think of advancement as a ladder. You build skills and experience over the course of your career, moving your way up the ladder. The minimum wage functions to raise the bottom rung, making it harder for the poorest of our populace to ever hop on and begin climbing. So, instead they are pushed out of the legitimate workforce, leaving the
illegitimate workforce the only path of employment open to them.
At this point it should probably be noted that keeping the underclass unemployed was the original
point of the minimum wage. It's not like the sudden discovery that price floors have a negative effect on those whose good or product is not worth more than the floor is new. The minimum wage was introduced in order to defend Decent White Folks who were trying to raise Decent White Families in Decent White Conditions... but who were being undercut by "Negros and mongrelized asian hordes." Sidney Webb (British Socialist) argued that "[o]f all ways of dealing with these unfortunate parasites, the most ruinous to the community is to allow them unrestrainedly to compete as wage earners". Edward Alsworth Ross (American Progressive) pointed out that since inferior races were content to live closer to a filthy state of nature than the Nordic man, they did not require a civilized wage. "The Coolie cannot outdo the American, but he can underlive him" was the problem, and the answer was to enact a civilized minimum wage that would put said savages out of wage competition. In a similar vein, the authors of the Davis-Bacon Act were quite open about the fact that the intent was to keep cheap black laborers from "taking" jobs from whites.
Now, the language has shifted, and the minimum wage is presented as a means of wealth-redistribution. the argument goes that any employer can afford to pay any worker minimum wage (plus taxes, plus the regulatory burden), and so they should be forced to do so, in order to make sure that the worker is getting enough resources from the employer. Unfortunately, this is in direct contradiction to historical reality - the originators of the minimum wage had a sounder grasp of economics than its' modern defenders. In practice, many workers today are not worth the minimum wage plus the cost of taxation plus the additional regulatory burden. It's a small percentage of the total workforce, but it is a significant section of our poorest portion of the workforce. If you are part of the community that is young, urban, poor, black, and dropped out of high school because doing drugs or having a baby sounded like more fun at the time, then you face the harsh reality that under our current regime, you may be structurally unemployable. Oh, given some experience, some job skills, etc. you could
become employable; but thanks to the higher cost whose threshold you cannot cross, you will never get that experience.
Meanwhile, demand goes on, and the guys in the neighborhood a block over are all working 10-12 hours a day. Because they don't fall under minimum wage or regulatory laws - because they are illegals immigrants.
And so they are partly right, who defend the minimum wage today. Minimum wage laws today absolutely serve as a wealth redistributor. They take wealth and jobs from our poor, and give it to illegals, just as once they took them from our blacks to give to our whites.
Hope that helps.
The point you made is that your pride is more important then your desire to provide for your family.
nah. If I
couldn't get work and the option was that my children go hungry, I would accept help at that point, though I would be more likely to reach out to family.
How long were you laid off?
about.... two and a halfish months.
Did you have money saved?
:lol: not enough as it turned out. The experience drove home the critical importance of having an emergency fund of 3-6 months of living expenses, and I have never gone without one since.
What would of happened if you were not able to buy more food when your bread was gone?
Well that did happen - and the answer was that I moved back in with my parents and until I could ship out to the Marine Corps.
What if you only had enough change to buy the milk or the potatoes not both, would you go hungry or the baby?
I would - no parent worthy of the name really would give any other answer.
What if your baby became ill and need attention at a hospital?
then I would have gone to the hospital?
My point is this, not being able to foresee the future, what would it take before you needed to swallow your pride and say you need help?
It would take true, actual
need. Not merely the ability to get it.
