The two are unrelated. Those companies are repatriating their overseas cash because of changes to the tax code that allows them to do so at a heavily reduced rate. This has nothing to do with the federal deficit. Long term, the deficit can cause interest rates to rise which makes it more expensive to borrow money, which hurts small business owners more than anyone else. But more so, it can make it harder to borrow money for your home loan, it can make it more expensive to borrow money for an education. Lastly, you were one of the ones who condemned Obama at every turn for running deficits, even though it was dropping during his term. What gives now? Why were you so concerned about deficits then and dismiss them now?
Did you read the article that Winston posted? It was very clear that the labor portion of the equation isn't where the disparity exists. Right now it costs about $5 in labor to build an iPhone. To do so in the US would mean an additional $10 in labor. However, the pieces that make up the iPhone cost $190 but if all of those components were built in the US it would cost about three times that much. So, to make the iPhone in China costs about $195 each. To produce them in the US would cost about $585. Do the math. How much would Apple have to charge for an iPhone if it costs them $585 to produce rather than $195? How do you think that might affect Apple's iPhone sales?
You are wrong and it is obvious which side of the check you sign on Friday's. Small businesses rely on borrowing money to stay afloat and grow and the amount they pay to borrow that money factors into anything that they purchase with the borrowed money. If it is inventory then their cost of good sold go up and, in turn, they must charge more for their product in order to maintain their profit margins. Small businesses probably are affected more by factors such as this more so than large corporations. Right now a good number of large corporations have been waiting to repatriate funds because they could previously borrow money at a lower rate than the tax burden of bringing those funds back in. Now that they can do so at a tax percentage that they are comfortable with they will need to borrow less, at least for a while. That said, small businesses do not have this luxury and are dependent upon borrowed money to grow their businesses.
Are you daft? Why is raw material cheaper in China do you think? Or any material needed for means of production? In anycase, the price of labor, as the article you love quoted was double. Based on the scale, that’s pretty damn large.
Quote me one metric you use to make your business plans based on our governments spending. I’d like to know how this factors into a real decision you made selling mattresses. Everything you just said relates to interest rates. Not the federal budget.
When you can’t quote me right I don’t know how you expect to have a discussion. When you lead with false words it’s makes your entire post mute. Further you and Winston use words I haven’t said. I never said the Budget has “no impact” on the economy.
Yes, I noted that in my post. The labor costs went from $5 to $15. Regardless of the scale it's still just a $10 difference, nothing like the disparity of $380 between the costs of parts produced overseas versus those produced here. To break it down even further, the average iPhone costs about $700 at retail. Knowing that it costs roughly $195 to manufacture them it means that Apple's gross profit margin is about 72%. If we you take that number and rework the equation with the domestically produced iPhone at a raw cost of $585, the iPhone would have to retail at a little over $2000. So to put into terms that most American consumers will definitely understand.....we can do it Apple's way and pay $700 for our iphones or we can do it Trump's way and pay $2050 for our iphones. You want to take a vote on this and see who wants to pay that extra $1300 or so?
The price of labor goes beyond the iPhone. It trickles all the way down to the raw material and components. Such a singular view you have. You are making my point for me. We are fine to exploit the Orient and at the same time demand a “living wage” here in the US.
