Rich People Don't Create Jobs...

I wasn't trying to gain support of anything? I was stating my opinion...

 

Yeah...you must be right again...software, Internet and computer businesses have failed left and right...no growth in these industries...

 

http://www.investopedia.com/article...1214/where-does-bill-gates-keep-his-money.asp

Contrary to Iriemon and others who whine that wealthy people don't spend their money (vomit) try to imagine all the people and businesses in the above Bill Gates story that have been positively impacted over the decades. Now multiply this by 1000 and try to twist it as if wealthy people don't make a huge difference in our economy.

All of those $30K people who feel wanting...simply take steps to earn more and more. Get off their asses and compete with those evil wealthy people for a bigger slice of your pie. Literally tens of thousands of American workers reap huge benefits from the impacts of Bill Gates and others and all you can do is talk doom and gloom? My closest neighbors are in their 20's and they just bought their first home...a $3.6 million home!

 

OK, I thought you were trying to provide evidence to back up your opinion. My mistake.

 

Once agian the pie doesn't get bigger and, in fact, people like Bill Gates actually reduce the size of the pie. Let me explain why.

The GDP reflects the production of new goods and services (all created by the workers) for the year. All income is a withdrawal from the GDP while all spending on goods and services increases the GDP (all created by the workers).

So Bill Gate basically withdraws $11.5 billion from the GDP from his investments but even in his wildest dreams he can't spend $500 million on goods and services but let's assume that he was able to spend $500 million on goods and services.

Basically Gates withdrew $11.5 billion from the GDP but his spending only contributed $500 million in new goods and services being created. That's an $11 billion negative balance for the GDP because that money didn't result in more GDP (goods and services) being created and, in fact, it results in a reduction of the GDP for the following year.

The $11 billion not spent on goods and services translates into a job loss of roughly 330,000 direct jobs losses (and a total of about 500,000 jobs losses due to the multiplier effect) for the following year.

That same $11 billion being spent by low to middle income households on goods and services would create roughly 330,000 direct jobs (and a total of about 500,000 jobs due to the multiplier effect) for the following year.

That's roughly a one million job difference between Bill Gates receiving the income where he doesn't spend it on goods and services and an equivalent amount of income spread across low and middle income households that do spend it on goods and services.

While it may be all well and good to tell a $30,000 income household to simply go out and earn more money with the negative economic impact of high income investors not spending their money on goods and services the dramatic loss of jobs creates an insurmountable barrier. It's like trying to climb up a sand dune where the sand is giving way under your weight. The jobs are disappearing so fast that it's impossible for the vast majority to make it up the sand dune.

 

This is an incorrect statement. GDP is the market value of all the final goods and services produced in an economy within a given time period.

There are two approaches to calculating GDP: the expenditure approach and the income approach.

Expenditure approach:

Gross private consumption expenditures (C)
Gross private investment (I)
Government purchases (G)
Net exports (X - M)

GDP = C + I + G + NX

Then there is the income approach:

Labor income (W)
Rental income (R)
Interest income (i)
Profits (PR)

GDP = W + R + i + PR

There are plenty of sites where you can get further information on GDP, but your idea of withdrawals from GDP is just not accurate.

 

It isn't so much that people resist change when it benefits them but instead that these upgrades on computer software don't really benefit the person. By analogy I have DirecTV with hundreds of channels I don't watch. If DirecTV adds another shopping channel or religious channel it doesn't benefit me in the least because I don't watch them. Companies like Microsoft are generally adding "shopping channels" and "religious channels" that most of their customers aren't interested in.

It is interesting that my mention car safety because the most important safety feature of the car is the driver and driving habits haven't improved and, in fact, might have gotten worse because of the safety features incorporated into automobiles.

 

Correct Statement: GDP is the market value of all the final goods and services produced in an economy within a given time period.

Investments don't contribute to the GDP because they don't consume goods or services that are measured by the GDP. If we measured "investments" as a component of the GDP the GDP of the United States would be in the hundreds of trillions of dollars annually based upon the SEC reporting of investment transactions.

 

According to the formula they do:

Gross private consumption expenditures (C)
Gross private investment (I)
Government purchases (G)
Net exports (X - M)

GDP = C + I + G + NX

 

That can only be accurate if it's referring to private investment in enterprise (i.e. capitalization of the enterprise) because those dollars are used for the purchase of goods and services by the enterprise.

It doesn't relate to most "investments" covered by the "capital gains" tax codes and tracked by the SEC.

When I reviewed one month's transactions (in dollars) by the SEC and then reviewed the "public offerings" by corporations where the money actually went to "capitalize enterprise" the funding of enterprises was less than 0.00005% of all financial transactions. That (less than) 0.00005% did contribute to the GDP because that money was spent by the corporation on "goods and services" but the other 99.99995% of all other investments didn't contribute a dime to the GDP or US economy.

As I noted there's over well over $100 trillion/yr of investments tracked by the SEC and they don't show up as a component of the GDP so obviosly these transactions are not a component of the GDP.

 

"The GDP reflects the production of new goods and services (all created by the workers) for the year. All income is a withdrawal from the GDP while all spending on goods and services increases the GDP (all created by the workers). "

The point is that the bolded above is incorrect. Income is not a withdrawal from GDP.

 

It amazes me the complete lack of understanding on this board regarding GDP. People see a formula, but have no realization regarding what entail the variables contained within. Entire courses are dedicated to those variables and studying what is contained there in.

 

Where do you believe that money comes from? Where the heck to you think it comes from because it doesn't just magically materialize out of thin air and it certainly doesn't grow on trees.

All personal income is derived from the GDP which is based upon the goods and services (wealth) created by the workers. There are no other magical sources for income. Even when the Federal Reserve "creates" new Federal Reserve notes it eventually comes out of the GDP because of inflation. It takes awhile but it's still coming from the GDP.

 

GDP can be calculated in one of two ways, the income approach or the spending approach.

Using the income approach, incomes ARE the components of GDP (labor income, rental income, interest income, and profits)

Using the spending approach, incomes aren't used (that would be double-counting).

Incomes are definitely NOT subtracted from GDP.

For God's sake man, read up on national income accounting.

 

How can anyone complain when a person is spending $500 million on goods and services? The Bill & Melinda Gates foundation alone will be spending $50 BILLION on goods and services! When $11.5 billion is tossed around in the economy, it creates opportunities, and jobs, and tax revenues, etc. Even the $2 billion spent to buy some public stock is energizing the economy because it's not stuffed in a mattress.

Lastly, no matter how much of Gate's wealth you would like to take from him in extreme taxation policy, in no way will that money be redistributed to others in any form that will change their personal wealth. If you for example wanted to cap all US corporations's net profits at 3%, two things will happen; first, investors will find other options to invest, and second, the companies will still spend but will do so outside of the USA...they are not going to hand over their profits without a fight!

Here's my bottom line in all of these discussions; I am 100% opposed to forcing unnatural events in the private sector economy. Forcing wage levels beyond what supply and demand dictate is unnatural. Forcing unreasonable tax policy on the 'few' is unnatural. Forcing industry to provide health care, and pay FICA, etc. are unnatural.

 

In bold above...'minus imported goods and services'. You show this in your 'Net exports' which are exports minus imports (NX). This is one reason why trade imbalances are bad...more imports than exports means a reduction of GDP...

 

Actually, although stock investments are not a 'component' of GDP, they can have huge impacts on GDP. The value of the stock market influences financial conditions and consumer confidence. This creates optimism or pessimism for consumers. High valuations allow companies to expand, do R&D, and hire more workers because it's cheaper to borrow. All of these activities increase GDP. And, of course, the opposite can decrease GDP,,,

 

Yes, because they're not produced in the economy.

 

I'm not one to condemn Bill and Melinda Gates. They are perhaps the most generous people in America and have, as noted, donated about $50 billion of their personal wealth to charities one of which I support are the scholarships from the Gates Foundation. That doesn't mean I ignore the facts about wealth. Bill Gates has an estimated $77 billion in personal assets and none of that money is purchasing commodities that people make or purchasing services that people provide. It's "dead money" when it comes to jobs in our economy and that amount of money tied up in investments represents about 3.5 million jobs that don't exist in our economy.

Of course I've never advocated taking anything away from Bill Gates or other wealthy investors but I have advocated for a fair tax system where everyone is treated the same under our income tax laws. http://www.politicalforum.com/budget-taxes/399015-creating-fair-taxation.html

That is not to say that I believe in "unlimited wealth" because as John Locke established unlimited wealth violates the "Natural Right of Property" and the super-wealthy are violating the "Right of Property" of everyone else in society. As Locke basically explains a person's "Natural Right of Property" is limited to what they can actually use in their lifetime to purchase goods and services and there are unquestionably those, like Bill Gates, that have far more wealth than they could ever hope to spend. Of course our property laws are not fundamentally based upon the "Right of Property" but instead are based upon "Statutory Ownership of Property" but that's an issue for another discussion.

We will only address the fact that "unlimited wealth" is not natural. Holding title to land that is not being used is not natural. Over-exploiting a natural resource is not natural. The "Market" is not natural. Last but not least expecting someone to work for you 40 hours a week and then expect the government and/or private charities to provide for that person's basic expenditures because you refuse to provide adequate compensation is not natural.

 

Actually it's just an accounting practice to determine the net GDP where imports and exports exist. Imports sold in the United States are not produced in the US and are not a part of the GDP and exports produced in the United States are a part of the GDP but they are not sold in the United States. It's just a simple accounting practice to come up with a net GDP number related to imports and exports.

Where the trade imbalance hurts us is that we "owe" these foreign countries future production that has already been paid for by the goods we've purchased from them.

 

The guy has a point! If nobody wants to buy what you are making then you will not be making it for very long. I like how the second post on the thread threw up a Forbes link to derail the first post. I read the Forbes link till I got to the famous scare line. This is about taxes and Ted (or what ever dude's name is) is no tax expert..... This is an effective way of leading the idiots away from the water. The majority of people don't understand the tax laws and the higher educated rich "job creators" do. So they make it about taxes to get the ignorant people to disregard what Ted was saying because simply "he is no tax expert". Ted's point was if consumers don't want what you are making then you won't be making it for very long. Forbes jumped all over his comment about trickle down economics and made it about being a tax expert.
Makes perfect sense that Forbes would get defensive over the trickle down economics comment dude made, that is their bread and butter.

 

Taxing poor people to provide public infrastructure and services which only make landowners richer is also “unnatural” but you don't object to THAT!

"Landlords grow rich in their sleep without working, risking or economising. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not the individual who might hold title." — John Stuart Mill (1806 - 1873), English philosopher and social reformer, and one of the major intellectual figures of the 19th century

"Men did not make the earth …… it is the value of the improvement only and not the earth itself, that is individual property …. Every proprietor owes to the community a ground rent for the land which he holds … from this ground rent I propose to create a National Fund, out of which there shall be paid to every person a sum." — Thomas Paine (1737 – 1809)

“It is quite true that land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies - it is a perpetual monopoly, and it is the mother of all other forms of monopoly. It is quite true that unearned increments in land are not the only form of unearned or undeserved profit which individuals are able to secure; but it is the principal form of unearned increment which is derived from processes which are not merely not beneficial, but which are positively detrimental to the general public.” – Winston Churchill

 

No it is not a "safety net" the left has turned it into a pension system, a forced one but a pension system nonetheless. You pay more in you get more out. THAT is fair. You want more to retire on go out and earn it and then save it who are you to demand the government take it from someone else.

 

up to a point, just like if you die, you get nothing.... if you become rich, you should be capped too

just cause your car can do 100 mph, doesn't mean you can drive that fast, there is a cap

paying the rich more would hurt society.... so we should cap it... trust me, it's not gonna hurt the millionaires and billionaires the right is so worried about

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it is a safety net, one that makes America better imo

I don't worry about my future, I make plenty.... but I still care about the elderly and the disabled that are not so lucky

I am one of those that believe we all pitch in as a socirty to help the elderly and disabled.... the right sees this as something evil

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