Fletcher: It’s about treating the symptom
I am a voracious reader. I probably acquired the habit at an early age because there wasn’t television at Long Lake until about 1955. Even then only Channel 5 was available out of Bay City and the signal was very snowy. Reading was a more secure bet than TV because the signal did not fade during the good parts.
I was reading a novel just last week and the protagonist liked rich people because no poor person had ever offered him a job with a paycheck. How could they, they didn’t have money to invest.
Since savings equal investment and investment results in jobs, you should shop for a job with rich guys who have the money to create jobs. Since poor folks, by definition, don’t have great wealth you probably won’t get much job creation from that economic segment of the population.
I don’t have figures for the top 1 percent of the population in the United States, but I ran across figures for the top 2.7 percent. The top 1 percent is only important because the president likes to talk about those folks. I wanted to know just how much money was up there in the economic ionosphere because President Obama wants to tax those folks like mad to save the economy. Well, it just won’t work that way and here’s why.
The gross assets of these folks at the top of the economic heap are estimated to be $14.72 trillion in 2010. That’s more than Scrooge McDuck could ever imagine but less than the national debt. It’s about the same as the gross national product for one year. When we talk about gross assets we mean things like houses, cars, bank accounts, stocks, etc. In short, we’re talking the whole enchilada right down to unmentionable undergarments. We’re talking about taking everything and sending these folks out into the street clad in a barrel for clothing.
The government wants to tax them so I say take it all. Since it is about the same amount as the national debt, let’s just pay it off.
Where would that leave us?
Well, since these folks owned a large amount of assets invested in America, we just decreased the assets used in job creation by nearly $15 trillion and paid off the national debt in an equal amount. We saved nearly $300 billion each year in payments of interest on the debt. The deficit was reduced to $700 billion.
Since we took that money out of circulation, we destroyed the capital to support jobs. If manufacturing invests $100,000 for each job then that’s 14 million jobs lost due to capital starvation. If the jobs are in service businesses or fast food, then the capital needed per job is only about $10,000 for each job. When you do the math, that’s about all those jobs.
In economics the government can’t create jobs. Government expenditures are expenses, thus we just destroyed our entire economic system.
Actually, if the aftermath had no effect on jobs the problem of the national debt would just reappear because nothing has been done to modify the government’s expenditures to balance its income.
You just treated the symptom, not the disease. The national debt is the symptom. The chronic overspending is the disease. You cannot treat the symptom and expect the illness to abate.