The government in this country is leading us to financial catastrophe. You can't make this stuff up.
I can't believe that the people - as well as financial commentators in Japan -aren't up in arms about the latest financial plan from prime minister Shinzo Abe. I can see how the average person couldn't figure this out, but it is simple math. How could most commentators on economics in Japan be so clueless that they can't see the glaring problem with this latest plan?
First let's look at the plan.
Bloomberg reports:
The Japanese government will spend 10.3 trillion yen ($116 billion) to drive a recovery from a recession in Prime Minister Shinzo Abe’s first major policy initiative to end deflation and boost growth. Enlarge image Shinzo Abe, Japan's prime minister, speaks during a news conference at the prime minister's official residence in Tokyo, Japan. The Japanese government will compile a 13.1 trillion yen extra budget to help pay for the stimulus program, according to the statement.
About 3.8 trillion yen will be for disaster prevention and reconstruction, with 3.1 trillion yen directed to stimulating private investment and other measures, according to a statement released today by the Cabinet Office. Extra spending will increase gross domestic product by about 2 percentage points and create about 600,000 jobs, the government said.
The article shows a construction worker and some other feel good images. But, like I said, the problem is simple math, folks.
How could the government spend $10.3 trillion yen (about $116 billion dollars) on creating inflation (thereby destroying the value of the currency) and 600,000 jobs?
First off everyone knows that the government does not create jobs. The government can only take money from the productive part of society (taxation of private industry) and redistribute it to the non-productive part of society. But my issue is not with this point.
The point is this, and I said it is simple math: How can the government justify taking this money from private industry in order to create jobs at the cost of ¥17,166,666 (about $193,333.00 dollars) each?
How can they justify that? Wouldn't it be MUCH better to allow private industry to keep that money and hire their own people?... Oh, yeah, I forgot... If they don't take the tax money, then they can't pay their middlemen friends.
Did I say that Japan's economy is doomed? Where are the reporters and economists to point out this problem that cannot be more difficult than third grade math...
That's why math is such a bitch, the numbers tell the truth.
13 comments:
"Wouldn't it be MUCH better to allow private industry to keep that money and hire their own people?"
Not necessarily, not at all. First, there is the assumption that private industry will use that money to hire their own people (whatever that means).
OTOH, government using funds employment that is literally creating demand for the products and services of private industry, which is far more likely to cause them to hire people (to meet that demand).
"Private industry" doesn't hire people just because they have the money to do it, and they are feeling good today. They hire people because they are needed to meet demand for their services or goods, end of story.
Joe has got to be joking. The government does NOT create jobs. The government takes money from the productive part of society and gives it to the unproductive part of society. If what Joe says is true then that explains how the Soviet Union or the workers paradise of North Korea were and are such successful business models.
What a load of crap.
So Anonymous, do you imagine that businesses just up and hire people to produce products and services that no one wants to purchase?
Joe, I'll bet you $100 dollars that you have never studied economics in unversity. If you had, you would have read the seminal work on this nonsense that you are preaching: "Economic in One Easy Lesson" by Heneyr Hazlitt. It is the basic book on economics that has become the bible on this subject for over 70 years. Hazlitt demolishes what you are talking about it that book... What you are talking about is redistribution of wealth from private industry to public. It does not work and has never worked in history. If you are not eager enough to read a simple reason why your ideas don't work (even after seeing what has happened to countries that use your idea - Keynesian economics) then read this: http://www.forbes.com/sites/peterferrara/2012/07/12/obamanomics-the-final-nail-in-the-discredited-keynesian-coffin/
Anonymous, instead of telling me to read a book, and casting aspersions at me in regards my education, why not answer the question: Do companies hire people to produce goods and services that no one wants to purchase?
I patiently await your answer. If you do that, I'll happily go round with you about Keynesian economics, etc.
Joe, you are so completely confused it defies belief. Your ridiculous question relies on a completely false premise: "Do companies hire people to produce goods and services that no one wants to purchase?" Yes. They do. It happens all the time. Of course companies do hire employees to make goods that no one wants to buy. Then they go bankrupt. It's called the free market... What cave have you been living in, or are there no bankrupt businesses where you live?
For real world EVIDENCE of it and proof that you don't have any idea as to what you are talking about, here's a classic example study: Just Google "Edsel Wikipedia" for one of the classic examples of a company that did exactly what you think they don't do...
Bureaucrats sitting in some office have no way to understand or predict what the free market wants.... Only private industry can and will take the risks in doing so....
All government spending is redistribution of wealth... Get that into your head: the government does not have any money ALL they money they get is money taken in taxes. Job creation has never worked.
Do yourself a favor and read the link (if you can) I am done arguing with someone who has such a poor grasp on practical business, economics and is so completely ignorant of history (and current events)….
Anonymous: If a company hires someone in the absence of demand for a product or service that said company will produce or provide, then the allegation that said company has "created jobs" is right up next to meaningless.
You see, "private industry" does not "create jobs," certainly not in any non-trivial way.
Demand (for products and services) does, and yes, government can and at times should act to increase demand for products and services.
Instead of telling me to google something or read a book, why not simply present some specific instances right in your own posts?
Folks, I just got home (sorry I haven't had time to blog today) but I've followed these comments. Joe, you wrote, "You see, "private industry" does not "create jobs," certainly not in any non-trivial way. "
That has got to take the cake for the dumbest statement that I have ever read. What it says when properly parsed (from its tortured -and soon to be dead - form) is, "Private industry does create jobs in a non-trivial way." That's right. Private industry creates the jobs. The government doesn't. Exactly what Anonymous said.
Too bad your grasp of simple English sentence structure is on par with your total lack of knowledge of economics and history. Anonymous, answered all your questions ... You come back with this scatological bullshit? You are banned from this site.
Only useful comments accepted. You are wasting people's time with this crap.
Though repeating over and over again that "private industry creates jobs," you've provided neither evidence nor example.
Again: Minus demand, there are no jobs, certainly no lasting ones.
Mike, I should have suspected you were a gargantuan dick trying to parley that dickishness into an internet facsimile of competence, insight, and wisdom. A quick look at your other threads make it very clear: You are a legend in your own pre-adolescent Ayn Rand wet-dream mind.
Color me so unsurprised
Joe, Joel, whatever your name is... I'll give you this last shot just because it just goes to show everyone what a bunch of laughable crap you spout. You continually want to claim that private industry doesn't create jobs. You must be insane and the only person in the western hemisphere who thinks that (your other oh-so-logical arguments on other posts that I have deleted - where your strongest argument i calling people sh*thead - I will ignore)...
You wrote, "Though repeating over and over again that "private industry creates jobs," you've provided neither evidence nor example." God, the your obstinate tomfoolery shows no bounds. I showed you evidence already, you just won't read as you admit. Here you go again: "The private sector, however, is the seedbed for jobs. Of 153.7 million American workers, according to the Department of Labor, only 2.8 million are federal workers, 3.8 million have state government jobs, and 11.1 million are employed by cities and counties. More than 88 percent of all American jobs are in the private domain." http://seattletimes.com/html/opinion/2015540325_guest08alben.html
Catch that, Joe? More than 88 percent in the private domain. Duh, does that mean private industry creates jobs? Yes.
I can see why Anony at 8:52 says he's done with you. I did the same, yet you still write this stuff?
Also, dude, I am running three companies now and work from 6 am until 9:30. I have 4 kids and one handicapped one... I also write here everyday 99% of the time here and for LRC... I certainly don't have time to write my own comment under pseudonyms... In order to call you a confused clown by myself, thank you.
Wow, Mike, "private industry doesn't create jobs", but government does? That is jaw dropping. - Mark Davis, Florida
Read that post about frustrations on dealing with Neanderthals... Funny stuff... Your guy who thinks Biig Sis creates jobs is a boob. I saw Santelli and thought of you Santelli Slams Keynesians: "The Answer Is Always More Money" http://www.zerohedge.com/news/2013-01-15/santelli-slams-keynesians-answer-always-more-money
I think Joe doesn't realize that government "jobs" do not add anything to the economy... He seems to not realize that every government jobs is paid by someone else's taxes....
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