BoJester

Some good reasons, both pro and con, to consider



http://www.thedailybeast.com/articles/2013/12/09/what-does-an-increase-in-the-minimum-wage-do-to-the-economy

Boo_Boo Loc: Jellystone

Bo,

I would be okay with Obama's plan to raise it to $10.00 an hour, that is just about where the big box stores start their employees. It is not a great deal of money and the increase could be recouped by employers with a 0.002 cent increase on goods and services. However, $15 and hour is asking for a lot of concessions and the increase on goods and services would cause some smaller Mom & Pops to go out of business.

Glad the link showed both sides. Thanks

Smiley881 Loc: San Leandro,CA.

A $10.00 minimum wage hike sounds good to me.
We are long over due.The thing is I don't think Employers would
be on board with the Wage hike.The Employers in Santa Clara
County are proof of it.Oh well I guess those Employers will
soon go out of Business. 8-)

Boo_Boo Loc: Jellystone

If it is raised, like the raise in 2009, will they have a choice? I thought that it would be across the board unless the state has equal or more minimum wage already in place.

I would think California, being a predominately Democratic state would be all for this! See, I live and I learn.

MarvinSussman

Instead of a minimum wage, we should have an ELR (Employer of Last Resort) program in which the federal government hires any adult who is unemployed at (say) $10.00 per hour for a 40 hour week with full health and other fringe benefits. These employees can then be put to work at zero cost by any federal, state, or local government office or by certified NGOs.

This establishes a minimum wage level that private enterprise must exceed. The result will be an increase in business costs and an increase of price and/or decrease of profit. But will it bring on inflation?

Before inflation rears its ugly head, many millions of Americans will be getting more income, spending it, decreasing inventory, increasing production, and getting hired away from ELR ranks by private enterprise. The question then becomes: will there be a shortage of goods or will the increased production level create enough goods to prevent inflation?

The answer lies in productivity, which brings us to the question of infrastructure. If we spend on infrastructure like we spent on World War II, we will have the world's best infrastructure and the world's highest productivity and there will be no harmful inflation and very low unemployment and the ELR ranks will thin out.

So the answer to the minimum wage question is federal spending: ELR and infrastructure. That brings up the last question: the budget.

Q1: Is our so-called “national debt” a serious debt, a burden we must repay?
A1: No, It lacks both of those two essential qualities of a serious debt. It’s a “Debt In Name Only”, a “DINO” -

1. A serious debt is a burden. OUR DINO IS NOT NOW AND NEVER WILL BE A TAXPAYER’S BURDEN.

Our DINO is the total value of all issued and still maturing treasuries. By calling our DINO “unsustainable”, a hoax meant to privatize Social Security and Medicare, Wall Street con artists seeking a fortune in commissions have panicked the ignorant public, journalists, and Washington politicians. But, effectively, the taxpayers do NOT redeem mature treasuries. In a virtual rollover, it is the buyers of newly-issued treasuries who redeem the mature treasuries! In every auction, more bonds are demanded than are available from new issues. Auction winners get the safest, most liquid US dollar instruments; the losers are stuck with bank risk. If necessary, the Fed could even create a demand for treasuries by buying large quantities in the open market with cost-free keystrokes. The taxpayer is NEVER burdened!

Our Treasury does not borrow money like a home-buyer undertaking a mortgage. It is a custodian of funds, like a bank accepting money offered for certificates of deposit. While a bank with too many bad loans can certainly have too many maturing CDs, our non-lending Treasury cannot have too many maturing bonds unless its deficit spending is causing harmful inflation. And that happens ONLY in a war or emergency requiring rationing. It NEVER happens during a recession. During prosperity, banks are ALWAYS the main cause of inflation, creating over $6 of credit for every $1 of deficit spending. To curb inflation, let’s regulate the banks before restricting spending on infrastructure.

2. A serious debt must be repaid. OUR DINO WILL NEVER BE REPAID AND SHOULD NEVER BE REPAID.

Only a budget surplus can reduce our DINO. Since dropping the gold standard in1971, we have had only four years of very modest surplus. None is now in sight. To supply enough treasuries, the ONLY risk-free instruments used for trade collateral, insurance, pensions, bank reserves, etc., OUR DINO MUST GROW WITH OUR ECONOMY. In fact, deflation and depression will hit us hard unless big budget deficits replace our cash now flowing into China.

Q2: Could savers make a “run” on Treasury bonds?
A2: Yes, when savers can get risk-free returns from the Wall Street casino or from GM bonds, Illinois bonds, or Detroit bonds. Safety is not everything. Safety is the ONLY thing! That’s why the whole world relies on US bonds.

Q3. Could savers stop buying Treasury bonds?
A3. Sure, when nobody needs risk-free interest for trade collateral, insurance, pensions, bank reserves, etc., etc.

Q4: Could savers prefer foreign sovereign bonds?
A4: Yes, indeed! So far, almost two thirds of the world’s reserve currencies are in US dollars and about half of all US Treasury bonds are held by foreigners. But if China’s infrastructure and productivity become better than ours, its sovereign bonds could become safer than ours. But that could happen only if US voters worry more about our DINO than they worry about our falling bridges, failing schools, leaking sewers, aging power grids, etc., etc., etc.

MarvinSussman

Instead of a minimum wage, we should have an ELR (Employer of Last Resort) program in which the federal government hires any adult who is unemployed at (say) $10.00 per hour for a 40 hour week with full health and other fringe benefits. These employees can then be put to work at zero cost by any federal, state, or local government office or by certified NGOs.

This establishes a minimum wage level that private enterprise must exceed. The result will be an increase in business costs and an increase of price and/or decrease of profit. But will it bring on inflation?

Before inflation rears its ugly head, many millions of Americans will be getting more income, spending it, decreasing inventory, increasing production, and getting hired away from ELR ranks by private enterprise. The question then becomes: will there be a shortage of goods or will the increased production level create enough goods to prevent inflation?

The answer lies in productivity, which brings us to the question of infrastructure. If we spend on infrastructure like we spent on World War II, we will have the world's best infrastructure and the world's highest productivity and there will be no harmful inflation and very low unemployment and the ELR ranks will thin out.

So the answer to the minimum wage question is federal spending: ELR and infrastructure. That brings up the last question: the budget.

Q1: Is our so-called “national debt” a serious debt, a burden we must repay?
A1: No, It lacks both of those two essential qualities of a serious debt. It’s a “Debt In Name Only”, a “DINO” -

1. A serious debt is a burden. OUR DINO IS NOT NOW AND NEVER WILL BE A TAXPAYER’S BURDEN.

Our DINO is the total value of all issued and still maturing treasuries. By calling our DINO “unsustainable”, a hoax meant to privatize Social Security and Medicare, Wall Street con artists seeking a fortune in commissions have panicked the ignorant public, journalists, and Washington politicians. But, effectively, the taxpayers do NOT redeem mature treasuries. In a virtual rollover, it is the buyers of newly-issued treasuries who redeem the mature treasuries! In every auction, more bonds are demanded than are available from new issues. Auction winners get the safest, most liquid US dollar instruments; the losers are stuck with bank risk. If necessary, the Fed could even create a demand for treasuries by buying large quantities in the open market with cost-free keystrokes. The taxpayer is NEVER burdened!

Our Treasury does not borrow money like a home-buyer undertaking a mortgage. It is a custodian of funds, like a bank accepting money offered for certificates of deposit. While a bank with too many bad loans can certainly have too many maturing CDs, our non-lending Treasury cannot have too many maturing bonds unless its deficit spending is causing harmful inflation. And that happens ONLY in a war or emergency requiring rationing. It NEVER happens during a recession. During prosperity, banks are ALWAYS the main cause of inflation, creating over $6 of credit for every $1 of deficit spending. To curb inflation, let’s regulate the banks before restricting spending on infrastructure.

2. A serious debt must be repaid. OUR DINO WILL NEVER BE REPAID AND SHOULD NEVER BE REPAID.

Only a budget surplus can reduce our DINO. Since dropping the gold standard in1971, we have had only four years of very modest surplus. None is now in sight. To supply enough treasuries, the ONLY risk-free instruments used for trade collateral, insurance, pensions, bank reserves, etc., OUR DINO MUST GROW WITH OUR ECONOMY. In fact, deflation and depression will hit us hard unless big budget deficits replace our cash now flowing into China.

Q2: Could savers make a “run” on Treasury bonds?
A2: Yes, when savers can get risk-free returns from the Wall Street casino or from GM bonds, Illinois bonds, or Detroit bonds. Safety is not everything. Safety is the ONLY thing! That’s why the whole world relies on US bonds.

Q3. Could savers stop buying Treasury bonds?
A3. Sure, when nobody needs risk-free interest for trade collateral, insurance, pensions, bank reserves, etc., etc.

Q4: Could savers prefer foreign sovereign bonds?
A4: Yes, indeed! So far, almost two thirds of the world’s reserve currencies are in US dollars and about half of all US Treasury bonds are held by foreigners. But if China’s infrastructure and productivity become better than ours, its sovereign bonds could become safer than ours. But that could happen only if US voters worry more about our DINO than they worry about our falling bridges, failing schools, leaking sewers, aging power grids, etc., etc., etc.

Boo_Boo Loc: Jellystone

I am rolling in pain.............NOT ANOTHER GOVERNMENT SCAM to raise taxes! Oh my God, it is getting to such a point that the only solutions that people can think of is a government sponsored plan that can be manipulated by people who know there is not enough oversight on the programs already in place. How many are scamming unemployment?? No one knows, there is no oversight! How many are scamming the food stamp program? Just to name two; but there are others. Again, no one know because of oversight. And this pathetic list does not need to grow. If we raise the minimum wage, at least employers have time cards...............

MarvinSussman

Your paranoia is showing. Nowhere did I even hint at an increase in taxes. Read on:

Q5: Won’t we need higher tax rates to pay for infrastructure?
A5: Taxes only counteract inflation. Congress never spends tax revenue. The IRS destroys all of its receipts, actually shredding cash payments and selling the pulp. For spending, Congress creates money out of thin air (just like your corner bank creates loans), deposits it in the Treasury, and writes checks. Then the Treasury auctions bonds to finance the deficit, which is limited only by Congress and NEVER by tax revenue. The only rational reason to restrict deficit spending is the onset of harmful inflation. Until then, Congress can and must spend freely on our DINO’s annual debt interest and on much-needed infrastructure for the future. Every day, you fill your kitchen sink AND you stop it from overflowing. Why can’t Congress fill our economy with money AND prevent inflation? Ask them!

Q6: How can increasing our DINO be good for the economy?
A6: Every spent federal dollar not repossessed by the IRS is saved by the private sector. Our annual budget deficit is exactly equal to the annual increase in private sector savings. YES! DEFICITS = SAVINGS! No deficits, no savings! A tax deficit is a savings surplus. It is money left on the table for the savers by Uncle Sam because he didn’t need it to prevent harmful inflation and because consumers need it to consume. We do not have a “national debt”. We have a “national savings”. The bad “Debt Clock” is really the good “Savings Clock”. How can we have too much savings?

Since bank loans must be repaid with interest and cash is flowing to China, a tax deficit / savings surplus is the ONLY savings source that can sustain our economy. We need to DOUBLE our DINO / total savings to return it to the World War II level that was followed by 35 years of prosperity without harmful inflation and with very high taxes. Our (DINO + total bank deposits) / GDP ratio is less than half of the comparable figure for China. Our M2 (money supply) / GDP ratio is half of Switzerland’s ratio and one fourth of Hong Kong’s ratio. We should be matching them.

Constitutional libertarian Loc: St Croix National Scenic River Way

I must admit I'm pretty good with most hard sciences but am a bit confused on macro economics. If let's say foreign investors decide they no longer wish to purchase new bonds (for whatever geo political economic game they wish to play) what happens to all of the maturing bonds that now cannot be rolled over? Is it the Ponzi scheme it appears to be?

OldSchool Loc: Moving to the Red State of Utah soon!

The Communist's have landed!! The Communist's have landed!!! They're everywhere!!!! They're everywhere!!!!!!!

What the hell are you smoking anyway??!!

Constitutional libertarian Loc: St Croix National Scenic River Way

The principle may never need to be paid off but the interest does correct ?

And the whole reason for why foreign governments up to this point have been willing to play the game is because they have needed US dollars to purchase oil. If the us looses it's petro dollar monopoly there will no longer be any reason to continue ye to purchase us bonds true ?

Smiley881 Loc: San Leandro,CA.

Well the way I see it is those Employers can either sink or Swim.

grey gringo Loc: South Texas

I don't know what Marvin is smoking or ingesting but it appears to have affected his brain.