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View Diary: Who creates jobs? The middle class (103 comments)

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  •  I'm not sure Markos knows just how right he is... (4+ / 0-)
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    Stwriley, Mr MadAsHell, Dube, mideedah

    ...when he emphasized the fact that the Uber-wealthy are not the job creators.  Here are some excerpts from my last blog posting:

    Number 1: ALL JOBS IN THE ECONOMY ARE DEPENDENT ON SPENDING, the spending of households, firms, and governments. That’s where the money comes from that pays everyone’s salaries.

    Number 2: MONEY SAVED IS MONEY NOT SPENT. A decision to save is a willful decision to not spend.

    Number 3: IF THE MONEY THAT IS SAVED IS NOT RETURNED TO THE ECONOMY THROUGH THE SPENDING DECISIONS OF BORROWERS, THEN THERE IS A NET LOSS OF MONEY FROM THE ECONOMY AND JOBS DISAPPEAR.

    Well, the smart thing to do during a recession is for the government to increase the tax obligations of the nation’s biggest savers, i.e., the Top 10%-15% of income earners, in order to finance major spending initiatives on true economic investments: infrastructure and human capital.

    “No! No! No!”, say The Republicans. “That would take money away from the Job Creators!”

    Oh really? Says who?

    Since we know that all jobs are dependent upon spending, how does it make any sense to call the economy’s biggest savers job creators when their [money saving] actions do precisely the opposite? Since the lower- and middle-classes spend nearly all of their incomes, are they not the true job creators?

    Contrary to the insinuations of Republican politicians, roughly 85% of all corporate spending on investment is financed by retained earnings and other ‘internal’ sources of revenue, and not by borrowed funds (i.e., not by the ‘Job Creators’).

    The money removed from the economy by wealthy savers is not desperately needed by businesses for most of their investment plans. What does stimulate business investment is an increase in demand for their products.

    In an economy suffering from 9% unemployment, it is clear that a lot of the money that has been removed from the economy by savers is not being lent to borrowers, or else the economy would certainly be booming.

    Now if/when the federal government increases the tax obligations of the Top Fifteen Percent of income earners, it will collect a great deal of money from the nations Biggest Savers. If Congress is smart, it will spend ALL OF THOSE FUNDS on desperately-needed public investments.

    Understand clearly the net result of taxing the rich more during an economic recession: money that would have been removed from the economy by the nation’s biggest savers gets spent, instead, by the federal government.

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