Wednesday, January 10, 2007

Economic Consensus

Dean Baker has a very short Comment which is a Must-Read, whether you are an advocate or opponent to the Minimum Wage. Dean points correctly to the fact that the raise in the Minimum Wage means only 4% fewer Minimum Wage hours worked, not 4% fewer Minimum Wage Jobs; all with an overall real increase of 35.1% higher Wages. Dean doesn’t point to any Studies which relate fewer Work hours offered to increased Training demand. I have always utilized a very unmathematical Rule of Thumb of 3:1 in percentage terms, so the 4% fewer Minimum Wage hours worked would generate 12% more Training acquisition hours in an educational format for these Workers. Many Economists may state I am all wet with that Rule, but I like to think it works out.

Cactus at Angry Bear asks the serious questions about the Bush Tax Cuts. Were they indeed more beneficial than harmful? He wonders about leaving the Tax Cuts in place after the slowdown is over; is this beneficial? I ask the question of how one fuels the Economy in the next Recession, if the Tax Cuts are not removed? What bothers me about the pro-Tax Cut argument is that everyone takes the beneficial aspect of Tax Cuts for granted.

Do Business reform business practice, and clean out losing management procedures, if Tax Cuts cover the Costs of this poor practice? Why does no one examine the inflationary impact of the acquisition of Public Debt? Can Anyone explain the exact difference between printing Dollars, as contretemps printing of Treasuries? Why is the former bad, but the later allowable? How does each practice impact the Money Supplys? If Public Debt is to be considered as a mortgage on the Country, why are We collecting a mortgage on Our assets inside a booming economy; and should not the Public Debt and Debt Service be considered a economic dead loss subtracting from overall economic performance? A lot of Economists would review these questions and laugh, but what the hell do they find funny about it? lgl

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