Jobs and Investments
Both can be sources of income and individual wealth. Both can be wasteful.
The modern world is highly leveraged. One farm worker is said to be able to feed over 100 people. Similarly with automation in manufacturing, fewer workers are needed to build many things. While this makes each remaining job that much more important, should the emphasis be on domestic job creation? What is the balance and the current trend in automation (how many jobs go into making the farm worker that effective)?
As labor tends to flow out of the US, there is downward pressure on overall income from domestic jobs, except if displaced workers move into higher paying niches. As population bubble workers (baby boomers) progress into retirement, supply of labor decreases. This helps reduce unemployment but it doesn't create jobs. It shifts revenue streams out of jobs and into investment income. As retirees move out of the already shrinking workforce, they begin to rely more on investment income. They in effect become more highly leveraged consumers.
After market stock prices have tanked following a two-year down trend, investment may seem extra risky. Retired folks who relied on capital gains have been badly hurt. Folks who rely on dividends may see those reduced if the economy falters. But the stock market is about previous investments for the most part - individuals buy shares from other investors, seldom putting capital into the company (eg, IPO). The rise of a stock price and increase of market capitalization doesn't mean the company thereby has more working capital.
People are calling for a stimulus package which generates millions of jobs. What about stimulating productive private investment, domestic or otherwise, as an equal or even higher priority? People talk about investing in domestic infrastructure. But if that money comes from the government, then individuals won't have a direct investment (and thus no future investment income). Rather, taxpayers will likely owe more taxes sooner or later, or even pay use fees (such as toll roads, National Park entrance fees). That makes debtors out of taxpayers (and, hopefully, provides worthwhile benefits).
If government invests in large projects, that replaces or drives out private investment. Of course, if projects are funded by selling bonds, bondholder investment is created. Government can also assist private investment in various ways: Municipal bonds are generally tax-free, SBIR grants can be seed money for start-ups. How else can government promote the general welfare by stimulating investments, domestic or abroad, rather than simply spending money it doesn't have (or creating added debt)? What is the track record of Big Projects, and can we avoid the waste which many have brought?
If, or to the extent that, consumers are not also producers, don't they become economic slaves eventually... once previously accumulated wealth is spent down?
The modern world is highly leveraged. One farm worker is said to be able to feed over 100 people. Similarly with automation in manufacturing, fewer workers are needed to build many things. While this makes each remaining job that much more important, should the emphasis be on domestic job creation? What is the balance and the current trend in automation (how many jobs go into making the farm worker that effective)?
As labor tends to flow out of the US, there is downward pressure on overall income from domestic jobs, except if displaced workers move into higher paying niches. As population bubble workers (baby boomers) progress into retirement, supply of labor decreases. This helps reduce unemployment but it doesn't create jobs. It shifts revenue streams out of jobs and into investment income. As retirees move out of the already shrinking workforce, they begin to rely more on investment income. They in effect become more highly leveraged consumers.
After market stock prices have tanked following a two-year down trend, investment may seem extra risky. Retired folks who relied on capital gains have been badly hurt. Folks who rely on dividends may see those reduced if the economy falters. But the stock market is about previous investments for the most part - individuals buy shares from other investors, seldom putting capital into the company (eg, IPO). The rise of a stock price and increase of market capitalization doesn't mean the company thereby has more working capital.
People are calling for a stimulus package which generates millions of jobs. What about stimulating productive private investment, domestic or otherwise, as an equal or even higher priority? People talk about investing in domestic infrastructure. But if that money comes from the government, then individuals won't have a direct investment (and thus no future investment income). Rather, taxpayers will likely owe more taxes sooner or later, or even pay use fees (such as toll roads, National Park entrance fees). That makes debtors out of taxpayers (and, hopefully, provides worthwhile benefits).
If government invests in large projects, that replaces or drives out private investment. Of course, if projects are funded by selling bonds, bondholder investment is created. Government can also assist private investment in various ways: Municipal bonds are generally tax-free, SBIR grants can be seed money for start-ups. How else can government promote the general welfare by stimulating investments, domestic or abroad, rather than simply spending money it doesn't have (or creating added debt)? What is the track record of Big Projects, and can we avoid the waste which many have brought?
If, or to the extent that, consumers are not also producers, don't they become economic slaves eventually... once previously accumulated wealth is spent down?
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