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We Are The Job Creators

by Jayef Kennedy (Principles: Ask Not) - 1 year ago

Trump wants to cut taxes for the wealthy. Clinton wants to give subsidies to everyone else. Which approach will help the economy? If the wealthy are the true "Job Creators" then Trump is right. If not, his plan will do nothing except increase the deficit.

Scenario 1: Business is booming for a clothing manufacturer and retailer. The company, owned by wealthy people, decides to expand to another state by taking over space in a mall. They hire the staff for the new store and hire additional people to make more clothes at the factory.


Scenario 2: Business is declining for a clothing manufacturer and retailer, The company, owned by wealthy people, decides to close several stores. They fire the employees at those stores and cut the number of employees in the factory. 


Question: In both of these scenarios, who are the Job Creators?


Republicans would have you believe that “Job Creator” is a synonym for wealthy people. However, as the contrast between these two scenarios proves, the wealthy people who own this clothing company are merely players. They do not actively create jobs. They passively react to the business conditions created by their customers.


The true  Job Creators are the consumers. Or, to put it another way, Mr Millionaire and Mr. Billionaire do not create the jobs. You and I do. If we decide to spend our money on new clothes, we help the employees of the clothing companies keep their jobs. If enough of us buy those clothes we force the owners to hire more people to meet the expanded demand. If we decide that we have enough clothes then sales people and factory workers get fired.


The 2016 election is unique in many ways but on the issue of how to improve the economy, it is essentially no different from any other election going back to the 1930s. Donald Trump, the Republican, wants to cut corporate and personal income taxes. This sounds like it benefits everyone but for most people the bigger tax bill comes from social security, property, sales and gasoline taxes which will not change. Thus,income tax cuts primarily benefit the wealthy under the assumption that the wealthy are the Job Creators and the more money they get, the more jobs they will create.

Hillary Clinton, the Democrat prefers to put more money in the hands of middle class consumers. Her program therefore, aims to cut major middle class expenses like tuition and health care, provide paid family leave and pay for it by increasing taxes on the wealthy. Her view is that consumers are the true Job Creators and the more money they have, the more they will spend and the more jobs will be created.


Who is right? As my two scenarios show, I side with the Democrats. However,  I’m willing to modify my views if someone can make a convincing case for the wealthy being the Job Creators. Good luck!

Comments and Responses (5)

Reasoning used for ARGUMENTS presented
By  U.N. Owen - 1 year ago
Scenario 3: There is a part of the country where there is a need for more clothes and the current clothing retailers in that area are not satisfying the needs of the consumers. Some middle class people in the area have ideas of how to fix this, but none have the money to do anything. A wealthy person comes along and, seeing this unmet need, deploys $100 million to build a factory, rent out a store, hire workers, and purchase materials. There are now thousands of jobs created by 1 wealthy person. Had this person known, though, that he would be taxed at 50% (hypothetically) instead of 39.6%, then he may have decided that the risk would not be worth taken, because even if the business succeeded, he would only get to keep half of his income from the venture.
Discussion Leader's Response : This comment is relevant to the discussion. (Commenter's rating is increased.)
Discussion Leader's Explanation : I agree that taxes should not be raised on entrepreneurial activities. I wouldn't even be opposed to lowering those taxes. The tax code should absolutely be designed to provide breaks for activities which directly create new jobs - like building new factories. But when a company pays 8 figure bonuses to executives, I see no reason why those bonuses should be taxed at a rate less than what middle class Americans pay (after FICA is taken into account.) Further, "long term capital gains" include many financial activities that have no correlation with job creation. Why should these be taxed at a lower rate than what minimum wage workers pay? We're taking money from the people who create the demand and giving it to people who then have a tax incentive to park it in passive investments which create no new jobs. It makes no sense.
Reasoning used for ARGUMENTS presented
By  Facebook Commenter - 1 year ago
Both scenarios are wrong,because Hillary's billionaires just simply get the H1B program and replace the AMERICAN worker with foreign lower wage workers,so yes they hire ,but not AMERICAN workers. Virginia has become nothing but breweries and wineries,and restaurants ,low wage jobs. Auto,Steel Mills,energy,frozen foods,agriculture etc. Employ more people at higher wages. I say compromise, because democrats trade deals have devastated our economy, and using cheap labor In other countries ,people get smart and wise up ,to rise up and hate us for using slave labor.
Discussion Leader's Response : This comment is interesting but not directly relevant. (It might be a good topic for a new discussion)
Discussion Leader's Explanation : H1B visas are certainly a vexing issue but not directly related as even foreign workers spend money and thus increase demand. A key way to make sure Americans get the high paying job is to improve the way we educate AMERICAN children. That way we wouldn't need so many foreign workers to fill highly skilled positions. I agree that trade deals have hurt many people while primarily benefitting the corporations. I don't mind creating conditions where poor foreigners can get jobs but you're right that those jobs have to be more than slave labor. Let them earn a real living and then they can become a market for American products, increasing demand for American products, and increasing jobs for American workers.
General Comments
By  Facebook Commenter - 1 year ago
I agree with Hillary! And if we raise the minimum wage that gives people the money to buy more, thus helping the economy and the workers!
Discussion Leader's Response : This comment is relevant to the discussion. (Commenter's rating is increased.)
Discussion Leader's Explanation : Absolutely! Just be careful and don't increase it so much that companies decide to buy robots and fire the people. Unfortunately, robots are not great consumers.
INFORMATION used
By  Facebook Commenter - 1 year ago
It is the Saul Alynski economic theory that people should spend to rescue the economy. FD Roosevelt pushed spending during the depression. Don't save, just spend and the economy will recover is the theory. It clear that it doesn't work as the government spent billions on saving banks and the car industry and we are have averaged 1.38% GDP over the past 5 years.
Discussion Leader's Response : This comment is relevant to the discussion. (Commenter's rating is increased.)
Discussion Leader's Explanation : The comparison with the Great Depression is appropriate but I disagree with your conclusion. During the Hoover years immediately after the market crash, the government provided no economic stimulus and by the time FDR took over, the country, and the world, had sunk to the point where the economy had stopped working. This time around, Congress passed a major stimulus bill within a few months after the crash and rather than getting 30% unemployment, we peaked at around 10% and have recovered to under 5%. Yes, 1.38% growth is historically poor, but it is far better than what happened in the 30s without stimulus. And, it is easy to make the argument that had the Republican Congress been more accommodating with additional stimulus spending, our growth rate would have been much higher.
General Comments
By  Facebook Commenter - 1 year ago
We have tried to give money to the middle class before thinking they would spend it and create growth. It did not work. I believe it was George Bush. Now Obama is trying the same thing. I say the rich will open more stores if they have fewer taxes. That will put more people to work. Then these workers will spend money to clothe themselves and feed themselves. So now we have continuous growth. Maybe slowly, but surly.
Discussion Leader's Response : This comment is interesting but not directly relevant. (It might be a good topic for a new discussion)
Discussion Leader's Explanation : The George Bush tax cuts primarily benefitted the wealthy. They happily took the money and invested it in many of the crazy financial instruments that did nothing for the economy but did help crash it. They will not use the money to open new stores unless they have evidence that people will buy. Further, even if they do open new stores, those stores will close very quickly if there are not customers. Those who build the stores are admirable in that they take risks and they therefore deserve to make a profit but it is the customers who drive the economy.