The Watering Hole

Rich people don't take that money and invest it in workers.  They don't share it with their employees.  They don't buy goods with it.  You know what they do?  They stick it in the bank.  That helps a couple more rich bankers, but does jack shit for the economy.

Perhaps out of context of the original post but....

Don't most rich people invest money?

Doesn't that money eventually become spent?

I understand what your saying in the context of our immeadiate needs,but in the longer term the money is spent right?

Perhaps the money wont' be worth as much in the future,but at some point it will be spent.


Other than letting some of it loose right now....I can't blame the rich for saving and investing ect.

Do you agree?  Or are you talking about  something different?

What makes the economy good is spending. That's why we need poor people and a middle class.  By and large, poor and middle class people spend every dime they make.  The rich certainly spend more money than the poor and the middle class, because they have more.  But as a percentage of their income, they spend way less.  That's why unemployment spending is always a better stimulus to the economy than tax breaks for the wealthy.  When you put money into the hands of unemployed people, they spend it. That money ripples out into the economy immediately.  When you put tax breaks in the hands of the rich, they don't increase their spending.  They save more.  Saved money is definitely good for the rich guy, but a total bust for the economy... that money doesn't do a thing to help the economy at all, since it's not realized in the economy.  Sure, maybe 40 years down the line it will get spent, but right now it's a loss.  When the economy is bad, what needs to happen is spending, not saving.  (Note: I'm talking about good for the economy, not for you or me personally).

Of course, there's the argument that in the past we spent way too much, beyond our means, and that the economy will therefore never be like that again... somehow people are now adjusting to live within their means.  That might be true.  But that is bad news for the economy too.  Basically, we need to spend a lot of money to keep our economy growing.  It's much easier for China to grow their economy... most of the country is poor, so as they develop, tons of people are moving into the middle class.  We already have out middle class, our rich, and our poor well defined.  Without serious spending and consumption, our country will continue to have 10% unemployment, or higher, forever, no matter what the government does.

charger — Sep 20, 2010What makes the economy good is spending. That's why we need poor people and a middle class.  By and large, poor and middle class people spend every dime they make.  The rich certainly spend more money than the poor and the middle class, because they have more.  But as a percentage of their income, they spend way less.  That's why unemployment spending is always a better stimulus to the economy than tax breaks for the wealthy.  When you put money into the hands of unemployed people, they spend it. That money ripples out into the economy immediately.  When you put tax breaks in the hands of the rich, they don't increase their spending.  They save more.  Saved money is definitely good for the rich guy, but a total bust for the economy... that money doesn't do a thing to help the economy at all, since it's not realized in the economy.  Sure, maybe 40 years down the line it will get spent, but right now it's a loss.  When the economy is bad, what needs to happen is spending, not saving.  (Note: I'm talking about good for the economy, not for you or me personally).

Of course, there's the argument that in the past we spent way too much, beyond our means, and that the economy will therefore never be like that again... somehow people are now adjusting to live within their means.  That might be true.  But that is bad news for the economy too.  Basically, we need to spend a lot of money to keep our economy growing.  It's much easier for China to grow their economy... most of the country is poor, so as they develop, tons of people are moving into the middle class.  We already have out middle class, our rich, and our poor well defined.  Without serious spending and consumption, our country will continue to have 10% unemployment, or higher, forever, no matter what the government does.

I agree with pretty much all of this.  Unfortunately though, our Middle Class is no longer as well defined as it used to be since most of those currently unemployed are actually from the middle class which, I believe, is a lot different from previous times in history (when it was primarily the lowest class).

That said, I don't necessarily agree that feeding unemployment is the answer.  Since so many Americans have been brainwashed to let the Goverment take care of them, many are simply taking their unemployment money and living on it instead of using it for its original intended purpose (temporary funding to live on while they find replacement employment).  Maybe money (and tax breaks) should go to support small businesses instead?  Then they can afford to hire more employees or some of the unemployed will be able to start new businesses.  I think this would be far better for the economy in the long run.

What would you think about putting some type of restriction on big American businesses to require them to employ at least a certain percentage of Americans?  Basically I'm thinking about ways to stem the trend of outsourcing everything to cheaper wage countries...

CraigBert — Sep 20, 2010[quote author=charger link=1284815532/0#1 date=1284956083]What makes the economy good is spending. That's why we need poor people and a middle class.  By and large, poor and middle class people spend every dime they make.  The rich certainly spend more money than the poor and the middle class, because they have more.  But as a percentage of their income, they spend way less.  That's why unemployment spending is always a better stimulus to the economy than tax breaks for the wealthy.  When you put money into the hands of unemployed people, they spend it. That money ripples out into the economy immediately.  When you put tax breaks in the hands of the rich, they don't increase their spending.  They save more.  Saved money is definitely good for the rich guy, but a total bust for the economy... that money doesn't do a thing to help the economy at all, since it's not realized in the economy.  Sure, maybe 40 years down the line it will get spent, but right now it's a loss.  When the economy is bad, what needs to happen is spending, not saving.  (Note: I'm talking about good for the economy, not for you or me personally).

Of course, there's the argument that in the past we spent way too much, beyond our means, and that the economy will therefore never be like that again... somehow people are now adjusting to live within their means.  That might be true.  But that is bad news for the economy too.  Basically, we need to spend a lot of money to keep our economy growing.  It's much easier for China to grow their economy... most of the country is poor, so as they develop, tons of people are moving into the middle class.  We already have out middle class, our rich, and our poor well defined.  Without serious spending and consumption, our country will continue to have 10% unemployment, or higher, forever, no matter what the government does.

I agree with pretty much all of this.  Unfortunately though, our Middle Class is no longer as well defined as it used to be since most of those currently unemployed are actually from the middle class which, I believe, is a lot different from previous times in history (when it was primarily the lowest class).

That said, I don't necessarily agree that feeding unemployment is the answer.  Since so many Americans have been brainwashed to let the Goverment take care of them, many are simply taking their unemployment money and living on it instead of using it for its original intended purpose (temporary funding to live on while they find replacement employment).  Maybe money (and tax breaks) should go to support small businesses instead?  Then they can afford to hire more employees or some of the unemployed will be able to start new businesses.  I think this would be far better for the economy in the long run.

What would you think about putting some type of restriction on big American businesses to require them to employ at least a certain percentage of Americans?  Basically I'm thinking about ways to stem the trend of outsourcing everything to cheaper wage countries...

I disagree with the unemployment thing.  Sure, there are people who game the system. But I've heard way too many stories of people sending out 4 or 5 resumes a week, applying for hundreds of jobs, to think that everyone is.  And by the way, the insinuation that the poor are the only people gaming the system is ludicrous... what was that whole economic disaster that we just went through? Was that caused by poor people gaming the system?  I don't know, if you make a $4 mil bonus for selling and packaging a bunch of junk up as if it's worth something, are you poor? Or just a crook?

Anyway, there is no doubt that very nearly 100% of that money goes back into the system.

Tax breaks for small business... what is a small business?
You need to define your terms. I heard this last week, and it was pretty eye-opening. Listen to the article under the heading "Saving Small Businesses Becomes Rallying Cry To Extend Tax Cuts"
http://www.hereandnow.org/2010/09/rundown-915-2/#2
It is seriously eye-opening.

Would I be open to forcing American companies to employ a certain percentage of Americans?  It sounds good but I don't think it's a good idea.  American workers cost a lot.  And that makes our products cost more.  If we raise production costs by forcing more American workers, and our products can't compete here, they definitely can't compete in Asia.  Besides which, this is an easy example... I see two postings for H-1 exemptions in my work lunchroom right now.  These are for two jobs, one pays $107k - $142k a year, and one pays $128k -$182k.  These are jobs in an American company, in America, and not "cheap labor" by any stretch of the imagination, that are going to foreign workers. Because we can't find freaking American workers to fill the jobs.  Silicon Valley is actually a tough place to hire American engineers... there are so many job opportunities, and not enough smart, talented American workers.  So I disagree with the idea that we can't hire American workers, or that there are no opportunities for them.  Sure, manufacturing has gotten hit, and will continue to get hit. And those jobs are gone, and not coming back.  Why the hell would we pay an American $35 an hour for something an Indonesian will do for $35 a week?  Manufacturing is not coming back to America and no one should expect it to.  Our workforce needs education, and our education system as a whole needs to be better suited to turn out the kind of workers we need.

Basically we are in a conundrum. There is no good solution to consumer confidence.  There is no good way to make people spend their money.  But that is the engine that drives, and has driven, our economy.  It will not ever be growing at 11% a year like China, moving from agrarian to industrial.  We are stuck with what we have, for the most part.  If we are not willing to spend money, than this will not be considered a recession in 20 years' time, but a readjustment.

charger — Sep 20, 2010 I disagree with the unemployment thing.  Sure, there are people who game the system. But I've heard way too many stories of people sending out 4 or 5 resumes a week, applying for hundreds of jobs, to think that everyone is.  And by the way, the insinuation that the poor are the only people gaming the system is ludicrous... what was that whole economic disaster that we just went through? Was that caused by poor people gaming the system?  I don't know, if you make a $4 mil bonus for selling and packaging a bunch of junk up as if it's worth something, are you poor? Or just a crook?

I just reread what I wrote and can't figure out how you thought I said:
1) Get rid of unemployment (I said to stop feeding it - meaning stop making it larger and extending it so far)
2) That the "poor" were involved with anything (I actually only mentioned the so-called Middle Class - I know of several that are doing exactly what I said)
and
3) That only tax breaks will help Small Businesses (we looked into getting help for our startup but any loan would have been horribly expensive even if we could somehow qualify for a loan)

I used to think like you do about jobs when I lived in California, however the bulk of Americans will never have those high-tech type jobs...  What type of engineer is your company looking for?

I may have misread you, but I hear it all the time. That most people would rather be unemployed and take unemployment than work. Maybe it's because of my personal situation, but, jeesh.  Unemployment is not that much money.  I couldn't live on it.  And I think that most people who are unemployed want to work.  Sure, some people are lazy, but there is no cure for that.  And some people are crooks, and always will be.  

But anyway, what is a reasonable period for unemployment?  I have no idea how long people should be allowed to look for work.  I know that there are some places where there just are no jobs.  But there are lots of places where there are.

Jobs, we've got 15 software, test, or field engineer jobs open in our San Jose office right now. 8 hardware engineering jobs open in Spokane.  20-30 engineer openings in Seattle.  We make networking hardware and software, so obviously, people should know networking. Virtualization is also really hot right now... storage virtualization, resource virtualization, etc.

Up here you can get over $500 a week for unemployment.  When you consider that there are many one-bedroom apartments going for $400 a month, you can definitely live off of the income.  I know some that have been on the dole for almost two years!  My point is that they are the ones dragging down the system.

Of course, I also remember California where my last two-bedroom apartment was being leased out for $2,450 per month at the time I left (I was in it three years earlier).  I'm not sure what unemployment you can qualify for in CA, but I don't believe it's much different than up here.  Needless to say, you can't really live off of that amount down there!

Sounds like you're in one of the few companies that is really kicking ass right now - congrats!  I'd have to basically start over to learn enough to get one of those types of jobs (not that it would be all that hard).  I'm currently creating all of the engineering math models (mostly in Excel) for our company and I've already received requests to build a couple for other companies.  I like it because it's something new.  I started coding when I was 7 years old and needed a break, but it sure would be nice to start getting regular pay again!

If we had over $500 a month unemployement in Alabama ....plenty of people in here would avoid work. ;D

That's per week.   But it's generally based on the amount you made in the last year, and it's a percentage.
In CA the max is $450 a week, the average is $339.  That's less than most of us make per day. And it definitely won't cover the mortgage.

In Alabama the max is $265 a week.

I meant per week.

I'm sure it's adjusted for cost of living.

Just joking around. :D