When Will the New House Republicans Start Working on Creating Jobs?

The economy has fallen into a demand trap. Demand cannot grow without increased consumer spending but increased consumer spending requires greater consumer income.
Since gains in the national income have concentrated at the top, consumer credit thightened considerably, and the government and business become reluctant to spend, there is no way currently to increase consumer incomes to spur demand and economic recovery.

It is difficult to see how consumer demand can be increased without changing the distribution of national income so it is more widespread.

 

Oh it doesn't reflect anything "normal" now. Obama's policies have been a disaster as we are stuck at high unemployment and falling GDP after his massive spending program which totally failed to start a recovery as he promised. And he can't admit it and wants to do more of the same.

 

Everything was so great the Republicans wouldn't have been swept out of office.

 

Dems own fault for thinking the Bush administration wouldn't lie to them.

 

No. There is plenty of consumer income. The problem is consumer confidence.

I'm sorry. I can't help chuckling at the concept that government is reluctant to spend. That's really a funny statement. Business isn't spending because the economy is bad.

Sorry, I've lived enough and in enough places to know that socialism doesn't work. It never has. Anywhere. Ever. The real problem is that we have been sending our manufacturing our jobs and our wealth to other countries for the past 40 years. Reversing that is the only solution I see.

 

Hopefully, the recession will fix itself. I'm not confident of that, however, until we start moving the jobs, manufacturing and wealth back into our country rather than away from it. I predict we will still be arguing about it 5 years from now.

 

The reason why manufacturing left the US was because the US tax regime made it more profitable to turn physical assets into money to be invested in speculative markets than to invest in improvements that would increase the value of assets and increase sales and profits. This can be traced back to the late 1970s and early 1980s when capital gains taxes were lowered from 39.9% to 20% while both personal and corporate income tax rates remained higher.

Thus, income from asset stripping, categorized as capital gains, became far less taxable than other forms of income so what publicly traded companies that could be, mostly manufacturers, were taken over by Wall Street money managers and stripped of their assets. Management garnered huge salaries and bonuses as machinery was sold off or transferred overseas, short term shareholder gained as profits soared, pension and other funds were raided, and finally large capital losses were claimed as the company sank into bankruptcy. This was a standard corporate takeover strategy throughout the 80s and 90s, It was called "The maximization of realizable assets".

How do you reverse that? Tax rates are so low now that making them even lower will not attract the investment needed to grow jobs. The door was closed long after the cow left.

 

Although I don't fully understand what you said it seems to make sense. This has been going on through Democrat and Republican administrations. The JOB CREATERS sold us (American Workers) out for a buck. The Cow is gone, but my question is , What would it take to get it back?

 

Raise the capital gains tax to 70% and the personal income tax for those with annual incomes over $1Million to 80% or more. Put a limit of $100,000 on claims for losses in the markets for income tax offset purposes.

Tax domestic dividends at the same rate as corporate taxes, 30-35%. Tax foreign dividends as personal income. Exempt the first $10,000 of capital gains to protect the small investors. Normalize the taxation of international corporate profits so only actual taxes paid overseas would create a comparable reduction of taxes on profits repatriated.

This would move money away from speculation in the markets by requiring investors to realize out sized gains in order to pocket profits and losses in speculation would give only limited tax protections. Since investors would gain more from corporate profits distributed as domestic dividends they would flood domestic manufacturers and service providers with money and demand that these companies focus on increasing their domestic business by expanding their business, investing in domestic productivity and increasing the market size and their share of it. They would also push companies to stop holding on to profits and spending them to increase share price but instead distribute them to shareholders as dividends.

Dividends would once again become a driving force in the markets.

 

I wonder when President Obama and the Democrats will quit destroying jobs. I realize they can't let a crisis go to waste but can't they skip a week on creating new crisises?

 

If you think Obama has not created jobs, then you are going to have a rude awakening if the Republicans take over. Just look as to how Bush left this country. He inherited a surplus from the Clinton administration and when he left this country was trillions of dollars in debt fight two wars and losing three quarters of a million jobs per month. If you want some more of that, then vote Republican. For sure you will see every manufacturer taking their factories to China or India.

I am not saying Obama is doing everything right. But he is the better of the two evils.

 

They are going to do that no matter who is President, and it will accelerate under Obama.

Government can't save you from Globalization with protectionism and very few Democrats are protectionists. So outsourcing will still continue even if Democrats owned every seat in Government. In fact, protectionism is more rampant among libertarians like Ron Paul and Pat Buchanan!

Democrats can't protect you from the effects of Globalization and they cannot "punish the rich" to the level that most leftists would like and still call America a free society.

At some point Democrats are going to hit a Constitutional Wall they cannot get around and I'm hoping Obamacare is it.

 

No the Democrats ran their typical campaign full of baseless assertions and lies to the people about how rich are evil and they will take care of everyone.

The facts are the facts, the deficits had been falling for three years and we had had full employment.

Look where the Democrats have taken us.

 

Once again, Bush and the Republicans "left us" with full employment and falling deficits down to $161 billion. THEN the Democrats took over the congress and then the WH.

Where are we now.

And again, from the Republican Congress led by Gingrich and Kasich, Clinton opposed the measures that grew the economy and held back spending increases. Bush inherited a slowing economy that went into recession weeks after he took office, the surplus was going away no matter who took office.

The KEY is what he did about it and what the results were. 52 months of full employment, a growing economy, growing revenues and a falling deficit.

ONE month as the housing market crashed and bottomed out. How many months of losing over 400,000 jobs have the Democrats given us?

52 months of full employment, falling deficits and GDP growth, yeah I'll take that again.

 

Nope, it was a clean sweep. You got swept right out of office. The people saw what Republicans had done to their country and said "No more."

 

Yeah with the MediScare tactic. Ain't gonna work this time. The people have seen what the Democrats have done to this country 9%+ unemployment, deficits TEN TIMES higher than where the Republicans had them, GDP growth nonexistent and no good economic news in sight.

 

Nope, polls show Americans still blame the Republicans.

 

No, the markets were still down a little from the dot.com bubble as Bush took office but the economy was not going into a recession. The surplus might have gone to a small deficit from that but that is no excuse for drastically enlarging deficits in times of economic prosperity.

What I find extremely interesting is that conservatives, republicans, etc. are not against deficit spending in times of economic prosperity but vehemently opposed in times of economic hardship. Why is that?

It was well known in both political and economic circles that a continuation of budget deficits and loose monetary policy through the 2000s would create fiscal problems by the end of the decade. In other words, the Fed and the Republican party chose to entirely discard responsibility for the less than pleasant reality that unavoidable future obligations should be responsibly addressed so they legislated huge tax cuts, vastly increased spending, less oversight and regulation of the financial industry and the Fed facilitated it all with low interest rates.

The KEY is that the 2000s were a decade of false prosperity, a bubble of fantasy that ended when the money ran out.

The housing market is still a long way from bottoming out and an even longer way from recovering. The Bush years saw an extra 5 million homes built during the false bubble economy. Home sales are dependent on new household formation which was about 1million a year. Due to the fallout from the Bush bubble economy this has fallen by 30%. It will be 5-6 years before new homebuilding, and the 40% of the economy it supported, recover to the long term average.

So, 5% is considered full employment?
Personally, I would rather have 124 months of 6% unemployment over 52 months of 5% unemployment followed by 52 months of 10%.

Interesting analysis. The blithe disregard of long term considerations is quite appealing.

 

There are no new house republicans, they are the same republicans with a different party or different financial owner. FYI: in republican world, they do not do anything, unless the highest payer tells them to. If the banks and corproations don't know what to do, the rebulicans don't know what to do. And all the new little republicans job is to kiss the butts of the older republicans. That is what they do. Nothing. Don't expect anything to be accomplished, because the old time republicans don't like Obama and will do whatever it takes to stop any government laws and bills.

Also, don't let the t-party fool you again. they are realy republicans that distanced themselves from Bush back in 2008. They just needed to use the party of T, to point finger and get re-elected. Too bad the Americans are to slow and simple to see through the propaganda of these clowns. As this kind of slow thinkers continue to vote for relics in the Senate and the Congress, we can expect the same outcome=Failure.

 

I agree that the jobs have gone over seas. And I agree that jobs created by the government of rebuilding our infrastructure are temporary jobs for five to ten years. What this country needs is to bring the private sector back from over seas. The question is how do we bring them back. Is it by applying high tariffs on goods manufactured by American companies to where it is not profitable for them to sell their products in this country? Where it would make more sense just to manufacture them here?

We know that China is not going to float their currency to increase the value of the Yuan. It will create inflation in China and the playing field will start to even out, which means companies will start to move out of China. I read an article where they are already starting to migrate out of China to other countries where the labor is much cheaper, like Vietnam.

The United States is still the biggest importer of goods from other countries, so if we install stiff tariffs I really believe manufacturing will start again in this country. It will take at least a decade, but we have to start somewhere because these government jobs will only last so long.

 

If we do this it means the cost of goods will increase. The cost of doing business will increase. The stock market, which is measured by global standards, will be reduced. If the stock market stagnates, current private U.S savings will be reduced even more. All of this may be inevitable, but our current politics (which depend on one group blaming the other for anything and everything) make it almost impossible for our leaders to take this kind of action.

 

The way I look at it, IF a person in the United States has a good paying job, he/she can afford to pay the higher cost of products. So IF these companies would relocated back into the United States, I really believe that the people in this country would not mind paying the higher prices and raising our standards back up. That is what Germany and several other countries are doing.

Doing business with China, Vietnam etc etc will bring this country down eventually, and what you are seeing now is just the tip of the ice berg.

The United States has to face reality and impose high tariffs against these corporations that have taken their companies over seas and pay cheap labor over there, then sell their products back here in the United States. The tariffs will make those CEO's think twice about the small profits being made by them using loopholes and destroying the U.S. economy. They would rebuild their factories in the U.S. IF they want to sell their products in this country..

Only thing that bothers me is that both Republicans and some Democrats are all for the global economy. But I can tell that it will not work because of too much difference in the value of the currencies. Something has to be done to level the playing field or else rich nations like ours will be brought down. No middle class will exist and you will only have the rich barons which own all these corporations over seas and the poor people which never had a chance.

The people of this country have to really watch the Tea Party and what their main agenda is. They claim they want to go back to grass roots. Well, grass roots means they want to send us back to the 19th century. If you want to see another civil war in this country, that is what will happen when people can not afford to buy their own medical insurances and they turn you down when you get sick at hospitals. Some like Ron Paul said to let the churches pay for your medical bills. Now that is insane!
They want to eliminate social security which a lot of people depend on to make a living. You can't depend on the stock market to support your investment on a retirement pension.

The Tea Party is a very dangerous group of people trying to change programs that have being implemented in this country for over seventy years and have helped millions. They would be solvent, but the Republicans have borrowed money from these pensions to pay for wars they start and now the system is in danger because the money was never paid back.

 

Well, tomorrow will be the 10 month mark for this do nothing House. Looks like they have 3 months left to at least get ONE thing done. . . anything!

 

The Republicans are not going to do anything to create jobs. They know that in order to create jobs in this country they would have to put pressure on big corporate businesses which have taken their companies over seas. Right now with as many candidates running for the office of the president they need all those millions of dollars being funneled in to the Republicans so that they can defeat Obama and keep doing business as it is.

The only solution to solving this grid lock is to vote all those Tea Party Republicans out of office and see if we can get some continuity in the halls of congress.

What really scares me about the Republicans getting control of the presidents office and the congress is that they will do as big corporation bosses tell them to do. First thing big corporations would want is to eliminate Unions, that way they could pay minimum wages and no health benefits.
The Republicans then could move ahead and do repeal Obama Care, Medicare, Medicaid and Social Security. They would paint a good picture that it is what the American people want and that it is why they had gotten voted in. I don't think the American public are that stupid where they can't see what the Republicans are up to and are regretting voting some Tea Party members into office in the last election. I honestly believe there will be a backlash and all those ultra conservatives will be voted out.

Senior's don't want to lose Medicare or their Social Security pensions. They have been good entitlement programs provided by the government for the last seventy years. They might need some adjustments because our politicians have gutted their funds to pay for other projects, but the pension accounts were solvent for the next fifty years, until they borrowed the money and it has never been paid back.

If the Republicans were to come up with some solutions on how to create jobs I might respect some of them. But they are the party of no solutions. All I have heard from them is they don't want to tax the billionaires because they create jobs.
LOL! YEA SURE! They create jobs in China and other Asian countries.

I agree the cow has left the barn and it is going to take ten to twenty years to get her back in the barn. Time to start working together and get those jobs back into this country.

 

The "cow" analogy works well here. I grew up on a farm with them. Something always either scares or lures them away from home. Remove the source(s) of the fear and/or the allure (both in this case provided or induced by the government) and they will come home. Cows are notoriously languid creatures and will make their way home at their own unhurried pace. We have to be diligent and patient; they will come home.