The only fundamental flaw in this theory is that for every $1.00 that is saved, those banks can only lend out $.80 because of the Federal Reserves Reserve Requirement. So when spending $1.00 vs. $.80, the straight spending will always win. This reserve requirement changes based on whether we are trying to speed up or slow down the economy. It is just one of the 3 tools of monetary policy.
Oh, many have told you via PM huh? I'll keep giving you hell like many have told me to do via PM. Also ignore your ridiculous posts about how this country is so rich and yet we have so many that are poverty stricken. Keep hating America and I'll keep standing up for it.
Oh get off it. Since when is $7.25 a living wage? Try living on $7.25 an hour. I think a $2+ increase is a bit much, but there has not been in increase in a decade. And just because someone supports an increase in the minimum wage does not mean he is not a conservative. I am a conservative and I have never had any big problem with increasing the minimum wage - especially after 10 years. Opponents of the minimum wage always throw out the big bug-a-boo that it will cost jobs. But in fact it does not. Employers still need to have employees. They will simply pass the increase on to the consumer. It may cause a slight rise in inflation, but nothing to be greatly concerned about. And if in the process the estate tax (death tax) is decreased, well, it is worth it.
Yes it does. It really hurts small business, sometimes stopping it from being able to run. Less jobs. Also, many simple jobs become cheaper to have automated than pay the $7.25. Less jobs.
They never change the reserve requirement nowadays. Also, you aren't taking into consideration the money creation facet.
They don't really change the reserve requirement but it is still there and when talking about the money multiplier it eventually nets out to zero loanable dollars because of the reserve requirement. Then again, I am only an economics professor. I would have told you you were crazy if you told me that one day we would be in an economics discussion on Tigerforums!!
I don't say conservatives are against the minumum wage increase. But I am. In the collateral damage dept. comes those workers that work hard and can't get a substantial raise because now everyone makes more and the company doesn't have the money to give raises to those who deserve it. For example, 2 people in the company make $7.25 an hour. You'd like to give a raise to one of your employees who works hard and you'd like to keep them.....say to $10.50 an hour. You can't now because the other employee now makes, by government mandate $9.25 an hour. That's how a $2 increase can hurt. Also, my basic premise still stands. If $7.25 hurts nothing, then why not $20 an hour? If you really want to help people, make it $100 an hour? Why not? Oh but that much of an increase may cost jobs right? But a small $2 increase won't? Of course it will. Be it $2 or $200, jobs will still be lost and benefits will still be cut for those very workers you want to help. So next time, instead of feel good about yourself legislation, take a second and ponder how that may hurt people who drive our economy.....the small businessman. But I agree with you on the estate tax. But if you think that if conservatives give a little on the minimum wage that DEM's will now vote for the estate tax repeal, you're solely mistaken IMHO. I thought that may be what you were elluding to.
