Help Me understand...politics. Let's All Be Nice!

I've never understood it, especially after Trickle Down Economics didn't work back in the 80s, either.

Right now, there are companies hiring. Look at any of the hiring reports from staffing firms and they're all optimistic. The problem is that the hiring is largely for skilled, educated professionals. Those in the job market aren't always a match for what's needed.

What I would have loved to hear about is retraining those who are unemployed for growing fields, like healthcare, accounting & finance and IT. If job seekers had the right backgrounds to fill the openings out there, we'd see the UE rate go down considerably.

On a microeconomics level, let me tell you how taxes have affected my household in the past year...

As you know, this year the legislature and Gov Quinn raised the personal income taxe rate from 2% to 5%. Doesn't sound that big, right? But it has ramifications. We have a large income, but also a huge amount of expenses due to medical school & college loans.

Because of this I had to let go of my cleaning lady, to whom we paid nearly $300/month for 2 days of work per month. My cleaning lady is a single mother of 4 kids, the oldest of whom is 15 years old and was pregnant. So, my cleaning lady has $300 less per month to work with to house, feed & clothe her 4 children and 1 grandchild.

We also had to cancel our plans to do a landscaping project that we had been saving for for the past 5 years. So, the $10,000 project that would have gone to this small landscaping firm has been put on hold indefinitely.

We have also had to cut down on the monthly contributions we have been making towards our church, the local food shelf, my in-laws, and my SIL whose husband was unemployed for nearly 3 years.

So, that's just our household. We are certainly NOT hurting, financially, but we COULD be helping to employ other needy Americans if our taxes had not been raised.

**Let me add that my aunt runs a very prominent family-owned stock brokerage firm in Minneapolis. She has told me that she is not hiring ANYONE until she finds out what the hell is happening with the Affordable Care Act (aka Obamacare). I'd bet that my aunt has created more jobs than Pres. Obama has.

**Just wanted to add that not all of us who are speaking out against Pres Obama are Tea Partiers.

Also, the Minneapolis bridge that collapsed did not do so due to deferred/neglected maintenance, but due to a FUNDAMENTAL FLAW in the design/engineering. In fact, the day that it collapsed they WERE working on the bridge. The engineering firm who designed the bridge has settled a multi-million dollar lawsuit to compensate the victims. It was not the State of MN's fault. Please don't get me riled up about this one--my cousin is a volunteer rescue diver who was in the Mississippi for days pulling out bodies. It really gets my goat when people try to use it as a POLITICAL statement.**

This doesn't relate directly to taxes, but it does relate to foreign imports, specifically foreign steel, and how the decisions made during the late 70s and early 80s by the government affected my family while I was growing up in the Pittsburgh area.

Pittsburgh, as you may already know, was once a major producer of steel for the nation. There were numerous steel mills, and almost everyone in the Pittsburgh area had at least one relative who worked in one of the mills. My dad worked for the railroad company that served those steel mills in my early childhood.

During that time, our ecomony was being flooded with cheap foreign steel. My dad tells me that the government decided not to impose a tariff on the cheap foreign steel, making it very difficult for the domestic steel producers to compete. As a result, almost all of the steel mills in Pittsburgh had to shut down. And, because the railroad served the mills, my dad was laid off for ten years...most of my childhood. I got a chance to get free and reduced lunches at school, and I also found out how much fun it is to stand in a food line! Oh, the joy!

So maybe not having a tariff on imports helped out some people, but it certainly didn't help out the majority of people living in the Pittsburgh area...

I think we're no longer a nation of manufactuers. If we want a true recovery, we need to go back to the time when we actually produced something and didn't give unfair advantages to our competitors.

There have been encyclopedia sized books covering this topic. Those books would fill rows and rows of library shelves. mam-pedia doesn't have enough memory space in the post area to cover one chapter in any one of those books.

Generally speaking, people hire workers when they need workers for the next few years, not the next few days.

People who are hiring workers now are desparate for workers or they wouldn't be hiring. Why? Uncertainty. What is uncertain for business? Taxes and insurance. Insurance? Yeah, Obamacare. Taxes, Yeah, the taxes it will take to pay for Obamacare and other proposed government give away programs.

Obamacare was passed in a democratic congress and democratic senate and was signed by a democratic president. Our deficit is at dangerous levels. Our deficit cannot afford Obamacare. And as long as some one else pays for it, WHO CARES? Right?!?!

Everyone in congress wants to appear to be generous to the voters. That's why we get some of the wastefull spending that we do. ($500,000 to build a museum to Lawerance Welk! Several Million dollars to build a bridge to an Alaskan island no one lives on and no one wants to go to. $10 million for a study to find out why people fall in love.) There are lots of people that can't get good healthcare because they have expensive illnesses or conditions. Hense Obamacare.

But businessmen and women understand someone has to pay for that. Obamacare is scheduled to go into effect around 2014. That gives us at least three years of TREMENDOUS UNCERTAINTY. So companies aren't going to hire until at least 2014. OR until Obamacare is recinded.

And that is just one aspect of why companies are hiring. AND the greater the uncertainty, the lower the hiring. The lower the hiring, the worse the economy. The lower the hiring the more people save instead of spending and so things aren't bought and stores don't need people to sell things that aren't bought.

And the beat goes on . . . and on . . . and on.

And I could address the housing market's affect on the economy, but this post is already too long.

Good luck to you and yours.

You are not missing anything...

The problem with the tax cuts is that some small businesses CANNOT afford to hire more people. They don't have the sales or revenue in which to hire more. So even cutting their taxes isn't going to help them hire.

If they cut taxes in small businesses - SOMEONE, SOMEWHERE has to pick up the slack. There are some that believe the rich need to be taxed more - okay - fine - tax them more - but they will pay their lobbyists to find and create more loop holes...so consider a flat tax...with NO LOOP HOLES.

The construction "stimulus" is to mandate building - great!!! however, with the Unions backing Obama, I'm sure the legislation will require the construction crews to be union - which will cause the costs to go up and then we will get the EPA and DOE and some other organization in there to ensure owls, fish or something else is not being hurt - which will take time because a committee will need to be formed and of course we'll have to pay this committee and they will have to hire a firm to give a non-partisan opinion....it's a vicious circle...

While Obama came up with a plan - like the rest of the stimulus packages - it won't work...and you can't blame Republicans or Tea Partiers for the first two stimulus packages for not working - it was a Democratically ruled congress....for the first 18 months of Obama's Presidency and all 8 years of Bush's...

While I don't agree with this logic. I think it works something like this:

I own a small business. And I could use some employee help. But, I can't afford to pay my employees. If the gov't cuts my taxes, then that will free up some money that I could use to pay my employees. My employees then make money to spend. I am then able to produce more, and theoretically make more, and profit more, so then I have more money to spend. As I spend my money, those businesses profit, and then have money to spend, and so on and so on.

Let's face it, there will be no business growth if there are no consumers to propel it. Consumers need money to spend. I'd like to put the money in the hands of average citizens, who will spend it and propel the growth. Seems pretty simple common sense to me.

i have never understood politics, nor do I like them. IMO, I do not think that members of Congress and Senate should be paid the way they are, nor do I think they should "retire" from either one. I think that congress and senate jobs should be volunteers. everyday people from every walk of life, every race, every religion etc. They should do 4 years at a time and that is it! They should receive a salary comparable to an average working/middle class salary. If that were to happen, I think real change could be made. because then there is no need for them to worry about re election which means they will just say what they think they need to say to get re elected. think of all the millions and billions of dollars that would be saved in campaign money. once their term is up, that's it, it's up. No 6 figure retirement salary for the rest of their lives etc. we need to do a complete revamp of the way things happen. now, like I said, that is just my opinion. I really dont see how his plan will work. It sounds great, everyone was clapping and he does have a really great speaking voice. But honestly that is just the kind of thing that sounds great but will probably not work. we need something what will get the money back into the hands of every day people. they need to cut income taxes for starters. there is just so much to be done, everyone knows the ammount of work and policy changes etc it would take to make the economy fixable would take years and years unless we all took a stand, worked together, set aside the party biases and DID something is just daunting. so, we all just complain, and live our troubled lives.....
but, in spite of all of that, i'd still much rather live here, where I have the right to say this without worrying about retribution. good question. i wish we could all ask questions like these and other "hot topics" without having to worry or add our disclaimers.

People who are struggling financially are going to go to big stores like Walmart instead of a local mom and pop store whose prices tend to be a little more expensive b/c they do not get the massive discounts that big chain stores get due to lower taxes, deals with the city on no-property tax for the first several years, and manufactured products from China that has unfair wages for labor, so they can sell items to Walmart for mere pennies.

Then, the small business that get tax cuts to hire people don't have as much need for employees b/c their businesses are failing in the first place.

The corporate companies that are hiring... it's a joke! I've seen jobs looking for only master degrees and only willing to pay $10 an hour. Or they want 10 years experience, and it's an entry level position. So all of these new grads won't take the job, and older folks with families can't take them b/c they need more pay than that.

Whenever the job market goes up, it looks good on paper. But unless you read the fine print, the jobs people are getting are usually second jobs like Taco Bell or night stocker at Walmart that can't actually float a family on a living wage.

Then, you have the 1-2 year certificate degree jobs. Dental hygenists, medical transcriptionists... degrees that are good pay, fast to get... so lots of people are flooding the market making jobs harder to find. And of course, the transcriptionist job is obsolete anyways, yet they are still pushing the training.

It's just a huge mess all across the board.

I think the Republican idea, if you use Ryan's plan, is to cut the tax rate while removing deductions. If you look at a lot of the deductions for business they are specific to chosen industries, industries that have lobbied for them. So by removing them they are no longer playing favorites, you still have the same amount of revenue coming in. You also get to pay less to comply so that is savings that isn't even coming out of the government's pocket.

A business budget is not like our month to month idea. Even though taxes come due once a year they are paying into the system on a regular basis. Sort of like our withholding. So if you knew your tax rate would be lower next April wouldn't you be spending the extra money in your paycheck? Same deal.

More than that any decision, any law that isn't negative at this point will spur hiring. It is the unknown that is really killing business. Think about it this way, your furnace is doing the death rattle, you don't know when or if it will go. You don't spend on anything extra because you are not sure if you need to save extra for that damn furnace. So the repair guy comes tells you the cat was hiding in there, everything is fine. Well then you go out and spend the extra money you were allocating to the furnace.

Once they start hiring that is a real increase to GDP that is what growth is born of. The stimulus didn't work because it was going to specific industries, specific jobs that should have been cut. By sending the money to jobs that were unneeded your weren't actually growing the economy you were moving resources in an inefficient manner.

A way to look at stimulus spending is your roof leaks and your driveway is fine but may go in ten years. You fix the driveway for $5,000 because you had a $5,000 coupon. Now you are out $5,000 and cannot fix the roof but hey! your driveway will be good for 20 years instead of 10. No one on a personal level would spend like that. It just doesn't make sense.

Anyway I hope somewhere in my rambling I answered your question. :)

Under President Reagan this same Repiblican backed economic strategy was called "trickle down". The idea was that by allowing big business to keep more money through lower taxes, etc. they would hire more workers, put more money into the economy, etc. It didn't work then and it won't work now. While I'm frustrated with both parties, I'm more frustrated with the Republicans. I believe their top goal is to ensure that President Obama is a one term president and they'll do almost anything to achieve that goal. Shame on them.