Japan officially in recession

[Lakewood90712]

The problem is that increased productivity ..........Snip

Yes, higher productivity can encourage employers to choose the US over another country, but ultimately the number of jobs that could actually amount to is not huge compared to the overall economy. We imported $2.33 trillion of goods in 2013. That's about 14% of our $17 trillion economy. That is still the tail and not the dog, no matter what all the books about globalization say...........

Not trying to be a smart-ass , but how much of the 17 trillion of the US economy is real goods and services, and how much is entitlements, like S.S. , Medicare, local government services ( fire, police, etc) and similar ? I seem to recall that in our bizarre world of economic theory's , things like entitlements are lumped in with goods and services. I hope I,m off base on this one.

 

[Hamlet]

Well, goods and services provided by or paid for by the government would be included in GDP. SS is just a transfer payment, so that wouldn't get measured by GDP, although if you use your SS to buy something at the store, what you buy is going to get included.

Note that the measurement of GDP is not an exact science, and that you can come up with a lot of goofy things that increase GDP with no real increase in our standard of living. My favorite example involves a stay-at-home mother getting a job at Subway and paying childcare while she is at work. Before she went to work, she wasn't producing anything GDP-wise. Now, she's producing subways, and someone is providing the service of childcare, so GDP jumps twice, although we might question the actual value of that GDP.

I think its a little funny that people don't think of the services provided by government as "real". The hip replacement paid for by Medicare is an extremely "real" service. The education of my children is a very real service. Providing police and fire protection, water on tap, and roads to drive on are very real services.

There is the potential for more waste in government spending to be sure, but having spent my life in corporate America I can assure you that it isn't unique to government.

Not trying to be a smart-ass , but how much of the 17 trillion of the US economy is real goods and services, and how much is entitlements, like S.S. , Medicare, local government services ( fire, police, etc) and similar ? I seem to recall that in our bizarre world of economic theory's , things like entitlements are lumped in with goods and services. I hope I,m off base on this one.

 

[Hamlet]

I don't think even most minimum wage people in this country are going to vote for a communist, or a $20 minimum wage. I think they might vote for a $10 minimum wage, though, and I'd be right there with them.

There are very few people looking for communism in this country. There are a lot of people looking at the economic policy changes we've made since the 60s and 70s and wondering if we are actually better off for them, though.

I'm a capitalist by nature, but--

I don't think having strong unions is anti-capitalist
I don't think having a minimum wage is anti-capitalist
I don't think the regulation of the finance sector is anti-capitalist.

Basically, I refuse to buy into the dogma that the market always knows best. I've seen markets get incredibly foolish results often enough to know that they don't work quite like the way they do in an Ayn Rand novel.

Imagine what would happen if all of the minimum wage workers showed up at the polls, and voted for a communist for president? Imagine if they voted a slate of people who confiscated companies, like in Venezuela? Or a $20 minimum wage.

There are plenty of people who would vote like that, and would win, but they do not show up to vote.

The world is run by those who show up.

If we continue to export our dollars, and effectively print enough money to equalize wages, the debt will be solved as well as declining wages. Foreign goods would just be too expensive to import.

 

[Lakewood90712]

Hamlet,

Thank's for the explanation of "Transfer Payments" , that is what I was questioning.

 

[GalaxyBoy]

Who would have thought that raising sales taxes might actually reduce purchases? Maybe I should apply for a government grant to study this.

I just got back from a business trip near Tokyo. Many shops and restaurants had signs in the window reminding customers of the new 8% sales tax (called "consumption tax" or something similar).

An 8% hit on purchases does indeed seem like a guarantee to stifle spending.

duh

 

[Lakewood90712]

I just got back from a business trip near Tokyo. Many shops and restaurants had signs in the window reminding customers of the new 8% sales tax (called "consumption tax" or something similar).

An 8% hit on purchases does indeed seem like a guarantee to stifle spending.

duh

Perhaps it is to fund a new economic stimulus plan sorry , I just couldn't help myself

 

[Aus_E_Expat]

Imagine what would happen if all of the minimum wage workers showed up at the polls, and voted for a communist for president? Imagine if they voted a slate of people who confiscated companies, like in Venezuela? Or a $20 minimum wage.

There are plenty of people who would vote like that, and would win, but they do not show up to vote.

The world is run by those who show up.

If we continue to export our dollars, and effectively print enough money to equalize wages, the debt will be solved as well as declining wages. Foreign goods would just be too expensive to import.

If all of the minimum wage workers and welfare recipients turned up to vote you would end up with.....AUSTRALIA.

Voting has been compulsory in Australia for the last 100 years - everyone has to turn up to vote or face prosecution.

The result has turned out fairly well. Nothing wrong with having a decent minimum wage for working people to live on.
A slightly more egalitarian and fairer society than the US but still definitely in the capitalist model.

Yes, the world is run by those who show up and vote so make everyone show up and vote.