Economic Populist Commentary

Economic commentary by a pro-capitalist, economic populist. Demand-Side Economic theory. Consists of author's economic views. Questions & comments appreciated. Dissenting views are VERY welcome and encouraged. Main "agenda" is crafting and advocacy of a "populist" economic agenda. A secondary goal is prevention of an economic Armageddon. Encouraging open discussion of US economy.

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Location: Southern California, California, United States

The author is a physician by profession, and a "student economist" by necessity. The current status of our economy necessitates the latter. The intent of this blog is to explain and discuss economics in layman terms. It is designed to promote thought and discussion. It is written by a layman. Comments and critiques of these theories and letters are welcome and ENCOURAGED. Dissenting comments are also WELCOME! They form the basis for discussion.

Saturday, December 25, 2004







JOB CREATION
Labor produces goods and services

Jobs:
--created by Demand for labor ONLY
-----not by corporate tax cuts
-----not by deregulation
-----not by increased corporate profits
-----not by increased productivity

Demand for Labor:
-----created by demand for goods and services (produced by that labor)

Consumer Spending creates DEMAND for goods and services

--*Therefore, Consumer Spending creates DEMAND for labor

--*Therefore, Consumer Spending creates JOBS
-----Increased Consumer Spending increases JOB CREATION

Consumer Spending limited by $ available to spend.

Consumer Spending = Income + Borrowing + Asset Liquidation - Saving - Investment
---since Asset Liquidation is usually negligible, it will be omitted. Thus,

Consumer Spending = Income + Borrowing - Saving - Investment

Most consumer spending is from Income.

The higher the individual's Income, the more that goes in to Savings and Investment.
----(because ability to continue to increase consumption diminishes with increasing income)

The lower the individual's Income, the less that goes in to Savings and Investment.

The lower the individual's Income, the higher the % is that goes in to Consumer Spending.

The higher the individual's Income, the lower the % is that goes in to Consumer Spending.

From this, certain deductions can be made.
-----Increased income for higher income individuals favors Savings and Investment.
-----Increased income for lower income individuals favors Consumer Spending.

From this latter, further deductions can be made.
-----Increased income for lower income individuals increases job creation.
-----Decreased income for lower income individuals decreases job creation.
-----Increased % of nat'l income going to lower income individuals increases job creation.
-----Increased % of nat'l income going to higher income individuals decreases job creation.

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2 Comments:

Anonymous Anonymous said...

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2:09 AM  
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