Economy - Thoughts on fixing it?

Just something I feel like talking about honestly...

Basically, what do you believe your country should do in order to fix the economy? Note: Your country. I don't know how the economy works everywhere around the world... I can assume it is getting worse for everybody, just like for America, but I may not know that for sure...

So let's just have a discussion of what we believe is messing up the economies around the world and what we believe would do the best to help it!

As for my own thoughts... Mine are more for the local country's economy (Specifically America cause I live in America) and most likely it will help for only American made products, which I find is a good idea. (I rather see "Made in America" than "Made in China" more often)... They also will be in the spoiler below.

I don't see why you have a problem with "Made in China" products, almost everything (over 80% of products) that are consumed in the US are made in the US, and there are more imports from Canada then China.

As for fixing my economy, I can't really say since economic issues are just to varied within my country depending on the region. For my own, I'd get the feds to start building that bridge that is supposed to replace the old Jacques Cartier bridge. It's the most used bridge in the country and it's falling apart, we need that new one that can actually accommodate all the traffic up yesterday.

The economy is something nearly impossible to fix because almost no one really understands it. It isn't as much a science as it is a big fat guessing game as to what everyone will think is and isn't worth buying and selling at any given time. Irrational thought becomes fact, if enough people believe it's true. People believe something is worth while, so the demands go up, so suddenly the prices go up. People think something is now worthless? Now nobody will buy it, and it will BECOME worthless. Fortunes are made and lost in the stock market every day because of this.

The economy is run by everyone. You, me, some farmer in the middle of Africa, everyone in some way is effecting everything else. Logic and reason stop working when your dealing with SO many people with contradicting.

Someone else on this thread is going to say the opposite that the OP did, that we must increase minimum wage, increase regulations on business, only by increasing the cost on business that anything will be done. Which one of you is actually "right" basically doesn't matter, it what people THINK is the right answer.

Thus, there is very little one can really do that will defiently help the economy.

Fixing the economy, good luck, that reminds me of a joke. If you ask 10 economists a question you will get 12 answers because when you get to the end of the line the first 2 changed their minds.

I'm in the U.S. I would start by reestablishing many of the industries which have been lost to foreign suppliers, including textiles. First I would have studies done to determine what industries would be viable for a given region or area and then set-up companies to make the products. The focus would be on small manufacturing for local markets. The companies would be set-up as ESOPs (Employee Stock Ownership). There would be no union. Instead, the stock in the companies would be held by the employees who would vote for top management. The employees would be paid in dividends as well as salary.

So, you ask, where are we going to get the money for all these new companies? Taxes are too high as it is. Well, I say, the money is all ready there, or should I say here, over a trillion dollars worth, just sitting around doing nothing, waiting for a "repatriation holiday". Its being held in accounts labeled "off shore income".

Its not really off shore money. Most of it is here in the states, held in U.S. banks, and it was made here in the states too, but the tax code lets multinational corporations call it off shore income and pay no tax on it, that is, until they declare that it was "brought in". I say we change the law, declare all money made in the U.S. is taxable in the U.S. and tax it at the rate of 35%. 35% of a Trillion will build a lot of domestic industry.

http://www.nytimes.com/2013/05/22/business/for-us-companies-money-offshore-means-manhattan.html

Er...why assume the economy is getting worse for everyone?

Anyway, reducing the US minimum wage is a terrible idea. You have a lot of people struggling with poverty in the US as it is, cutting their salaries isn't going to help.

What would help is getting politicians to recognise that a functioning economy is a good thing, and not kicking it to pieces out of spite. Shutting the government down is an exceedingly stupid thing to do.

What makes you think the economy can be broken and need fixing? When people say things like that, it sounds to my ears similar to saying "how do we stop the tides from moving" or "how do we stop winter from coming."

Even if we could do those things, we shouldn't because the things you percieve as bad are part of a natural balance. There is no way to give the world full employment forever because trying to do so would horrendously break some other part of the balanced system.

The more important question to answer is how do we keep people happy and healthy regardless of where the economy stands.

Well, you could start by making businesses operate in accordance with how ecomonics actually works. There are means and practices by which you make profit and do not fuck over everyone else, thus securing future business and happy returns in the market. You know, the not-short-sighted stuff they teach you in college that nobody listens to.

(UK)

- Invest away from London and into the rest of the country. London may be a good financial centre but it is not the whole of the UK.
- Rebalance the economy towards manufacturing & export.
- Double funding for STEM research every year for a while, and ensure that research bodies pick what is done, rather than picking pet projects.
- Improve reliability/cost of public transport by renationalising the railways and reinstating lines to any town with a largeish population i.e. >10,000 residents
- Make every employee in a business a stakeholder/member of a cooperative, in a way that promotes stable, long-term performance.
- Pray...as the global economy is mostly out of our hands.

No system based on constant growth will last forever. Let it crash. Perhaps next time we can come up with something more sustainable as a means to make people productive enough to tend to our needs as a species. The capitalism/usury experiment needs to finish running it's course before we wake up to how bad this has been for us as a race and for the planet. I only hope that capitalism/interest management doesn't wind up taking us all with it when it finally collapses. It is either that or we reset the clock on it again and make some attempt to put some boundaries in place to keep this from happening that future generations will overturn or ignore bringing us back to this point again.

I agree with Aramis Night, we need to let the crash happen. Capitalism is meant to be about letting the weak die and the strong prosper, and until we actually do that we're going to keep having the same problems. A bit of effort to making sure we don't go through another depression is one thing, but we can't keep the same hundred people running the world and still expect it to change.

Now, if I, personally, were dictator of the world, here's what I'd do:

-Set minimum wage to about $13 USD, as appropriate for local buying power. If Mcdonald's goes out of business, so be it.

-Set a maximum (yearly) wage of 100,000 times the minimum (hourly) wage, by scaling income tax such that the brackets increase until any income in excess of the maximum wage is subject to 100% taxation. The maximum wage can only be increased by increasing the minimum wage. Tax fraud is punishable by repossession of the offender's entire personal property, including stocks, property, liquid assets, liquid assets stored in foreign countries, etc. Any attempt to withhold fines owed is subject to indefinite imprisonment until the offender pays the piper.

-Because the super-rich are now paying 90% of their income in taxes just to pay themselves the maximum wage, I can raise education funding to a reasonable level. At the same time, I'll make the last two years of high school optional, with graduation being possible following the completion of grade 10 or appropriate equivalent (let's be honest, the construction workers don't need to understand the implications of Macbeth).

-Half of summer break will be moved to Christmas. The second semester of school will end before the Christmas break. I don't know how it is where you live, but a break before exams is absurd.

-The school system will be broken into categories. The "top" level schools, which require marks in the top 33% of students in the region, will have a five hour school day and an extra two weeks of vacation. The "middle" level schools, which will be for all non-top level students who aren't expelled (which will actually happen, for those who break the rules) will have the present system. I hope that this will give a more immediate encouragement for students to actually care about schoolwork.

-Invest heavily in nuclear power, electric cars, and robotics.

-Make the majority of scholarships only applicable to "practical" fields - science, engineering, etc.

-I'd write more, but I'm hungry.

We need a change, and we need it soon. Not that I'd last long before being ousted by rebellion, but then, what idiot made me dictator, of all people?

For Belgium:

Increase competitiveness:

1) Freeze the indexation of salaries and the minimum wage. Right now each year the minimum wage is increased based on inflation and companies are forced to increase the salaries of their employees based on said index as well. While it makes sense it also reduce competitiveness and right now we're suffering a lot because of it.

2) Reduce the corporate tax to 25%. 34% is just too high. Now i can hear some people: but it's lower than income tax for people. Sure but if you take taxes on capital gains into account (25%) the gap is actually not that big, at all. Because at the end the main goal of a company is to pay its investors so the real rate which has to be taken into account is neither 34% or 25% but 50.05%. Suddenly it doesn't seem that low.

3) Increase the income needed to reach the upper brackets of income tax. 35 060 euro (yearly) to reach the 50% bracket is blatantly ridiculous. It's screwing up the middle class which is the backbone of our economy. The 50% bracket should lie around 100k € on a yearly basis.

4) Reduce social security contributions companies have to pay. On top of being taxed at up to 50% it shouldn't be forgotten people's income have already been taxed at 16% before when the company paid the social security contributions. This should be 10% tops.

Now how do we fund this?

1) Well first there is the boost to economic growth which comes automatically from the increased competitiveness and purchasing power of the middle class.

2)a) Let's stop funding all university degrees equally. We often hear about this new phenomenon of unemployed people with university degrees. but what they all conveniently forget to mention this phenomenon is highly dependent on the degree itself. We have too many "philosophers", "Historians", "Psychologists", "Sociologists", etc. ? Well why should we fund them than? No more tuition at 600€ per year, let them pay the full price of 20k euro. Lots of money to be made there by the state.
b) Add an entrance exam for every degree at the university. When you realize half the students fail their first year and one year costs 20k euro per student to the state a lot of money can be made by not allowing people who aren't university material to waste one (or more!) years trying to get what they won't/shouldn't get.

3)Limit the accessibility of unemployment benefits over time. Unemployment can get everyone, sure, but only few manage to be under its grasp for years.

4) Limit immigration. I often hear immigrants do the jobs we don't want to and therefor we need them. But those same people also say there simply are no jobs for the unemployed. Am i the only one seeing the contradiction here? By importing labor (except for highly specialized fields) all we're doing is increasing unemployment and that costs money.

5) Significantly reduce the amount of ministers/Parliamentarians/etc. This is quite specific to our country because of our absurd political system which probably makes the country with highest amount of ministers per capita.

6) Reduce some tax benefits only companies already profitable can fully take advantage of. It's not normal big companies pay 10% less taxes than SME's. And with the reduced corporate tax and cost of employment the big companies would still find the country attractive.

the biggest problem in the system atm is systemic tax avoidance/evasion by "big bussiness"...

the system we have atm cannot be sustained when the burden of taxation, for the most part, only falls on the workforce who at the same time are reliant on said "big business" for their wages which ofc "big business" would like to see reduced to as low a level as possible because to them wages are a cost that they seek to reduce as much as possible.

in short both ends (top and bottom if you like) MUST be taxed because only then does have any hope of balancing out and sustaining the system in the long term...in that a company that does well in a given nation should pay tax "dividend" to that nation because in doing so it enables the government of said nation to enact social policy that ofsets the desire of "big business" to basically wring everything and everyone dry...if this doesn't happen long term, and forgive me if this sounds melodramatic, modern society as we know it (including the current economic system) will basically collapse.

i dunno how many people are aware of this but the nations of the world are setting to make changes soon so that it (ie not paying any business taxation) basically becomes impossible...and yes they can actually change "the system" "just like that" : look up "bretton woods".

what you're likely to see long term is a system that incurs taxation where profit is made (as opposed to being able to avoid it by "basing" a company in some "tax haven").

either that or ("real") revolution...

the end game will never be a point where there is "a crapton of poor people and just a few rich people"...because eventually the poor people will basically rise up in anger and depose them......again...

the only sustainable model long term is basically having "an affluent middle class" ie the majority of people content/happy with their lot in life.

ps. also "shareholder value capitalism" needs to DIAF...and before anyone suggests it, no its not "the law": it's just a fucking stupid idea that's been making everyone (bar the top 1%) poorer since it was thought up in 1976 and mercilessly spun to the point sockpuppets think it is "the law"...

pss. also "trickle down theory"...which is another pile of rank political bullshit and is near enough outright rejected as "a thing" by real professional Economists...as opposed to the talking heads in the media...and ofc the sockpuppets again...

You want to fix the economy in America? Well Texas and North Dakota have the blue print on how to do just that. You tap the massive keg of natural resources this country is built on top of and you won't be able to hire people fast enough into good paying jobs. After that the rest will work it's self out rather easily.

For the USA:

1) Reintroduce Tariffs, specifically on Asian, South American and Middle Eastern Products.
2) Create the "Outsource" Tax; A tax on American Corporate Properties in Other Countries.
3) Abolish All Tax Loopholes.
4) Increase Income Taxes.
5) Increase Income Tax Brackets: Only people making More then 2.5 Million Dollars Get a 25% Income Tax, and People Making more then 100 Million Dollars Gets a 50% Income Tax.
6) Decrease Regular Taxes.
7) Simplify the Tax Code until it's very simple for everyone to Pay their Taxes with no problems and No help.
8) Remove unnecessary Taxes, Such as Gas Tax, Property Tax, and Corporate Tax.
9) Dramatically Reduce the Military Budget until it only funds Veteran Pay, the National Guard, and the Science Departments.
10) Dramatically Increase the Education Budget, Moderately Increase Infrastructure Spending.
11) Dismantle Various Administrative Organizations that are unnecessary or Repetitive (The CIA, NSA and BAFT Would be Dismantled because we have the FBI and Department of Defense, for example)
12) Ban any form of Lobbying where Individuals can pay Politicians or give them Gifts.
13) End all Subsidies to American and Foreign Corporations.
14) Reign in the FED so that they can't constantly churn out Money.
15) Create an "Illegal Workers" Tax: A Hefty Tax on Corporations that Hire Illegal Immigrants.
16) Raise the Minimum Wage to 15$ an Hour and Make Corporations Pay all Standard Employee's Equally (Male, Female, Black, White, Illegal, Legal).
17) Replace Social Security Programs with Public Work Programs, while Keeping Safety Nets for the Elderly, Disabled and Vets.

That is my plan on fixing the Economy of the United States.

Stop spending more money then you have access to. Phew! That was a tough one!

Super Not Cosmo:
You want to fix the economy in America? Well Texas and North Dakota have the blue print on how to do just that. You tap the massive keg of natural resources this country is built on top of and you won't be able to hire people fast enough into good paying jobs. After that the rest will work it's self out rather easily.

What, throw more money into fossil fuels? Not a good idea in the long run. Much better spend the money on green, including new tech. nuclear. And it should be public projects, with local-employee ownership (ESOP). Remember, the money is there, 35% of over a trillion. We just need to commit to investing it wisely.

Sleekit:
the biggest problem in the system atm is systemic tax avoidance/evasion by "big bussiness"...

I agree, its a big problem. I suggest a simple system that's both flat and progressive, based on tiers or levels. Wealth would be taxed the same at the same rate on each level, getting more progressive as the levels get higher, so that greater wealth is taxed at higher rates but only in the margin.

DevilWithaHalo:
Stop spending more money then you have access to. Phew! That was a tough one!

There's plenty of money out there that government has a rightly claim to. The first trick is getting it. The second is figuring out how to spend it wisely. One this is certain, we can't trust the private sector. We would have better sucess putting restrictions on and directing public sector spending.

Fixing the economy is both simple and utterly impossible: you just have to institute global economic reforms so that every country is on an even footing as far as taxes and benefits go, after which you spend a huge amount of money ensuring that everyone on the planet gets significant access to food, housing, medicine and education, and salaries provide access to luxuries only. You then make sure that none of these changes can be reversed by people with power and money later.

Once you've done that, you have a global population that is smart, not starving, and able to innovate and work to their full potential.

Super Not Cosmo:
You want to fix the economy in America? Well Texas and North Dakota have the blue print on how to do just that. You tap the massive keg of natural resources this country is built on top of and you won't be able to hire people fast enough into good paying jobs. After that the rest will work it's self out rather easily.

Doubts about that. It's short sighted and overtly simplistic. The U.S actually exports most of it's oil and none of that money trickles down. Something to keep in mind when someone claims that mining more oil will lower the oil price

That decision would make some people richer, but it would result in a zero sum or even negative sum game for the rest of the populace due to loss of ecosystems or health problems. Alot of people want to drill in Alaska for example, but Alaska's fisheries are extremely fragile and fisherman's livelihood depend on those fish. Drill in those areas and you're impoverishing the local fisherman.

OT: I have no idea. One thing I'm certain though is finding a way to tax fiscal heavens. Too much money goes overseas and is never put back into local economies. It should be illegal.

Jusey1:
Basically, what do you believe your country should do in order to fix the economy? Note: Your country.

Australia is doing quite well, the iron ore & coal mining boom is moving from construction to production (and so less workers are required, with more specialized skills).

There is still plenty of money to be made, the insane amounts we were making have stopped (I can no longer charge Au$3K-5K per day on site) but I still get a very good day rate.

Jusey1:
So let's just have a discussion of what we believe is messing up the economies around the world and what we believe would do the best to help it!

The tax burden has shifted, from the rich and business and on to the average worker.

This is because of corporate internationals tax laws surrounding internal sales of IP. Commonly known as the 'Double Irish'.

http://en.wikipedia.org/wiki/Double_Irish_arrangement

Jusey1:
Meaning, lowering the min wage, lowering the cost of health care for such businesses and anything else which is possible... Now, with min wage...

So you want to push the burden for supplying a living wage and health care to the public purse?
That means raising taxes to pay for more social security (unless you want crime to skyrocket or people to starve on the streets) and public healthcare (unless you want people dying from preventable conditions).

I have the opposite opinion; raise the minimum wage and make the rich pay a higher percentage (start by tightening tax laws on the highest income earners).

If you raise the minimum wage then the average worker will spend this money stimulating the local economy (buying food, shelter and entertainment).
At the moment this money goes to business or the rich who hoard it and avoid tax (by investing in lower taxed securities).

This increase in demand should help offset the rising cost of production (due to higher wages).

EDIT: If you don't think this is possible; the Australian minimum wage is Au$16.37 (~US$16) and you pay no income tax until you earn over Au$18.2k (~US$18K).

United Kingdom of London, London's Breeding-grounds, London's Breeding-grounds Oil Reserves, London's empty abandoned coal mines and London's... Why do we own Northern Ireland again... oh yeah, land is good.

Yeah... having an economy centered around an entire city is the main obstacle in the way of our economy, not necessarily the fact that most of the wealth and the employment are in 1 city, but also that the fortunes of the city are held within the hands of the financial markets which thereby break the Capitalist model of competition by entrenching a single power in a position by which a Government must bail them out, or suffer losing an election.

Something else for the UK. We need to stop trying to increase household income. Just stop trying to increase it, and put a focus on decreasing the costs of living. This will have a very large grassroots effect on the economy.

Aramis Night:
No system based on constant growth will last forever.

On average GDP/Capita growth cannot exceed the productivity increases. This means that as long as the companies find new ways to improve their workers output we will have GDP growth.

The moment the productivity no longer increases the GPD growth will (on average) be zero. Further more it won't be a problem, because unemployment won't change.

Gorr:
Further more it won't be a problem, because unemployment won't change.

Greece 50% Youth unemployment won't be a problem?

You are assuming that population will remain constant, as will the level of resource acquisition, which without space will only diminish over time.

If unemployment were to remain a constant, and there were people unemployed then simply put: brace yourselves.
One of the things that keeps many people content~ish is the prospect of growth in the future, and without that there will be massive societal changes which will be counter to that of the past 1500 years of human history.

And I refused to do a Karl Marx, grab a fucking crystal ball and predict what it'll be. I merely make the bold prediction it won't be the same.

Comando96:

Gorr:
[quote="Aramis Night" post="528.845156.20827554"]Further more it won't be a problem, because unemployment won't change.

Greece 50% Youth unemployment won't be a problem?

You are assuming that population will remain constant, as will the level of resource acquisition, which without space will only diminish over time.

If unemployment were to remain a constant, and there were people unemployed then simply put: brace yourselves.
One of the things that keeps many people content~ish is the prospect of growth in the future, and without that there will be massive societal changes which will be counter to that of the past 1500 years of human history.

And I refused to do a Karl Marx, grab a fucking crystal ball and predict what it'll be. I merely make the bold prediction it won't be the same.

I was talking of a very specific scenario, but I can repeat myself:

Long term growth is only generated by productivity increases and an expanding labour force. If you (as I did) talk of GDP per capita then you can ignore changes in the labour force. If the productivity doesn't change then GDP per capita won't (permanently) change.

The only way out is for all sectors (businesses, government, households) to decrease borrowing and spending significantly for several decades, but that won't happen as all of them are heavily dependent on the same.

Ralfy:
The only way out is for all sectors (businesses, government, households) to decrease borrowing and spending significantly for several decades, but that won't happen as all of them are heavily dependent on the same.

No need to borrow. There's plenty cash sitting out there doing nothing.

http://www.nytimes.com/2013/05/22/business/for-us-companies-money-offshore-means-manhattan.html

But fixing things is going to take a lot of spending. That's why its critical we plan and study to make sure we spend wisely.

We need to establish a culture where someone who is rich and famous and has a much younger girlfriend isn't looked up to. When people aspire to that, they ruin economies for their own benefit. I think we need more of a system of Confucianism, although I hear it might have made China somewhat weak and vulnerable to attack.

 

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