Is government the true economic killer ..?

This thread is not about my posting history or insulting posts so please refrain from childish nonsense and one liners I'm actually interested in being informed by members I have a lot of respect for.

I've come to the realization that big government red tape is whos responsible for the limited economic growth and corporate expansion and consolidation.

From;

Unemployment
Workman's comp
Insurance
Medical insurance
Arbitration
Social security
Medicaid

And,

Certifications
Business license
Zoning
Insurance

And I'm missing things here but please feel free to add them.

So my overall point is that these factors are limiting small business and creating a paradigm where only those with capital can enter the market. Either you take on an angel investor and sacrifice a % of your business or you take out a massive loan in order to cover overhead.

Also I believe that this is causing business to stop or slow down expansion by limiting entry level positions because entry level positions cannot produce enough of a value or return to cover the overhead to justify their position in the first place.

This is stopping millenials from entering the market. It's also forcing the everyone has to go to college paradigm putting an entire generation out of work and in removing their purchasing power by putting them in massive debt.

a reply to: onequestion

Unemployment
Workman's comp
Insurance
Medical insurance
Arbitration
Social security
Medicaid

And,

Certifications
Business license
Zoning Insurance

I think you're on to something - the governing system gets stronger and has more resources as time goes on. Fees, fines, taxes, the list goes on - more money is going into the Big Bad Beast and as a result, more laws, more statutes, more things to fine people/companies for.

It's all about consolidating power and taking it away from the public. I think the items you mentioned are empowering the "public" institutions and oppressing the citizens that those institutions were supposed to serve

a reply to: FamCore

Yes exactly


This is the inversion of reality that the cult of the NWO is forcing down our throats.

They create something that's suppose to help us but it in turn opresses us.

What works is freedom.

a reply to: onequestion

Government is like the brakes on a car. The car is like the economy.

It's only job is to slow things down. You can never accelerate a vehicle by using the brakes. No matter how differently you press on the pedal.

a reply to: DBCowboy

Wow great analogy.

But the brakes can also save our ass if applied properly

originally posted by: onequestion
a reply to: DBCowboy

Wow great analogy.

But the brakes can also save our ass if applied properly

Sure. Brakes have a purpose. But accelerating isn't one of them.

a reply to: DBCowboy

True.

So in your analogy what's the gas pedal?

It can't be no brakes... So what's the engine or gasoline?

originally posted by: onequestion
a reply to: DBCowboy

True.

So in your analogy what's the gas pedal?

It can't be no brakes... So what's the engine or gasoline?

Let me ponder. . . . .

If government is the brakes. . .

Then the gas pedal would be the market place.
Fuel would be innovation.

If the gas pedal is damaged, you retard growth or go erratically.

If the fuel is contaminated, poor, then the engine can't propel the economy. The ingredients of the fuel are work values, education, ethics, experience.

a reply to: onequestion

I'm just shooting from the hip.

If you can come up with something better, please do. This is just off the top of my head.

Indeed and it has been this way for all my working life, now mid 30's. I use to run a successful retail outlet that was involved in Motorcycle apparel design. As a business we was at the same location for just over 10 years and when our lease was up for renewal the local council quadrupled our rates. Now we was situated in not so nice area so we was the only business that would bring in anyone outside to the area. We ended up having to let three full time members of staff go and close down as it was no viable to continue. Our old location has sat unused to this day???..

This is fairly common and even if you are a business that pays all bills etc on time as we did it means bugger all and you can forget about negotiating.


The other major issue to hit the UK at least is that you cannot park anywhere making owning a business a waste of time. Or you can point customers to the "paid" car park 1 mile away £4 for 30 minutes please..



RA

Many of the things you listed were not invented by government, they were demanded by the citizens... our governments abided, and created those safety nets to satisfy its populace.

The problem is not necessarily government per se (although they are they're own worst enemy more times than not)... the problem is that most people living today are not old enough to remember what it was like back in the day before things like unemployment insurance, social security, worker's comp, universal healthcare, etc ever existed.

And thus, many people in today's world moan and groan about these safety nets thinking that the government is somehow screwing them over. But the truth is, those safety nets were a necessity in order for our countries to progress into 1st world nation status.

Without them, we'd be nothing but 2nd and 3rd world countries.


Now, that being said... corruption by government (and corporations) of said safety nets is a whole other ballgame.

But that doesn't mean that those safety nets are (in and of themselves) a bad thing, it just simply means that our governments are pathetically bad managers (spending their incoming revenues stupidly)... piss poor management that has happened under OUR watch.

So who's truly to blame ?
Them or us ?

Either you take on an angel investor and sacrifice a % of your business or you take out a massive loan in order to cover overhead.

Simply put, if a business has to take out massive loans to cover their everyday overhead... they're doing it wrong and don't have the know-how to run a business. Period.

There's not a business out there that doesn't have the potential to make a decent livable profit, IF it's managed and run properly.

In my 25+ years as an accountant helping small (and large) businesses become more viable, I've yet to encounter any business in any industry that wasn't able to tweek and twiddle their management and/or operations to turn a profit every following fiscal period without having to rob Peter to pay Paul.

The key to business longevity is proper management of incoming revenues. So long as you have revenues coming in, you have a profitable business in the making.

That rule applies to all facets of life.... in our personal lives, in our businesses, AND in our governments.

a reply to: CranialSponge

Hmm.

Interesting point about the perspective on these things and why we have them.

Can you share a link that might shed some light on that?

originally posted by: onequestion
I've come to the realization that big government red tape is whos responsible for the limited economic growth and corporate expansion and consolidation.

From;

Unemployment
Workman's comp
Insurance
Medical insurance
Arbitration
Social security
Medicaid

And,

Certifications
Business license
Zoning
Insurance

Government regulation can slow economic growth, but that's not always a bad thing. A sustainable economic growth rate is only about 2%-4% per year, beyond that and you see large bubbles form which inevitably result in collapse. Look at all the trouble China is in right now for example because they had a 10% growth rate for half a decade, Japan too has lost literally an entire generation of people because they grew too fast.

Unrestricted free markets are ultimately unsustainable, what they result in is people who sell out of a sector at the start of a bubble, wait for the collapse, and then buy up all the stocks at pennies on the dollar. As a big example, look at the Great Depression... not everyone was poor in the depression and it gave birth to numerous millionaires and billionaires.

For the well being of the people, and the continued financial security of the government, they are forced to step in and put the brakes on things. This in fact, is the primary responsibility of the Federal Reserve and central banking in general. Proper policy results in slow, steady, and sustainable growth.

So the question is does government do this? They primarily have three tools to take money out of the economy (the fed only covers one of these, but it's the most often used): The inflation rate, the interest rate, and the tax rate.

The inflation rate is set though changes to CPI which is the consumer price index that falls under BLS. It removes money from the economy by increasing the cost of goods and services over time. Inflation is a necessity because the population changes. As the population increases, the current money supply is spread between more individuals which results in less per person, as a result the money supply is increased to keep the same number of dollars in the system per capita. Demand for money is not proportional however (two people don't cost twice as much to support as one person), so an inflation rate causes the demand for money to also grow, which keeps people working.

Next is the interest rate. This is usually set above the inflation rate by 1-2% so that the relative value of investments continues to grow. The interest rate affects the cost of borrowing money. When money is free all demand is met and it's value declines. Setting an interest rate increases or decreases borrowing which in turn increases or decreases spending to keep things in that preferred 2%-4% range.

Last is the tax rate. The tax rate doesn't actually permanently take money out of the system but it does effect the velocity of money. The value of money is Velocity*Demand, as money becomes less valuable, people want more for the same service which means they borrow more and increase the money supply. This results in undesired inflation if it's not managed. Taxes essentially let the government dictate what is done for a portion of our total labor. If they for example want a more robust medical sector they can spend money to have medical services performed, and tax that. Ultimately the same salaries and spending happen but they don't happen according strictly to supply/demand.

Most of the items you listed are paid for through taxes but some are done entirely through the private sector such as insurance (the governments only role in insurance is to mandate that people have the financial means to cover the costs they may create). Some of this is to boost spending in certain areas, but some of it is also done for public health and safety. Market forces are very short term in nature, without building codes most people would live in shanty towns because they're the most cost effective, just as it's more cost effective in the short term to not have a sewer system and let the waste pile up.

Entry level positions are being phased out because there's no longer a need for them. Increased productivity means people are able to do more. Improved education over time also means that todays entry level position is yesterdays mid level position in terms of knowledge.

a reply to: onequestion

No links.

You can surf the internet and find all kinds of resources to read up on the history of our countries and how many of these safety nets came into existence.

Our ancestors fought with blood, sweat, and tears to demand more from our governments to try to make their personal (and work lives) better.

An interesting thing to note though: Our societies have always had to hit rock bottom before people finally got fed up and started a revolution to demand the problems be fixed.

So apparently, we the people have not hit rock bottom yet because I sure as hell don't see any revolutions happening.

Food for thought.

Government, Big Corporations and Bankers. Those are the evil dudes pulling the strings, Im sure someone can design a Piramid, on who is pulling who.

a reply to: DBCowboy

Government is like the brakes on a car

Government is like the Great Sphinx, we toil at the base lugging huge stones. Govt are the whip masters, then there are the levels above - the true economic Masters

originally posted by: CranialSponge
An interesting thing to note though: Our societies have always had to hit rock bottom before people finally got fed up and started a revolution to demand the problems be fixed.

Historically it's the well off societies that revolt. Those who are oppressed and have very little usually don't have the means to revolt. Hitting rock bottom isn't what does it, being successful enough that there's an unhappy group with financial means who think they have better ideas is what sparks revolutions.

a reply to: Aazadan

Proper policy results in slow, steady, and sustainable growth.

Quoted for truth.

If any business (including government) outgrows its britches too big and too quick, the business gets out of control and becomes harder to manage.

Slow steady growth is the trick to keeping a viable pace.

Running a country or a business isn't a sprint... it's a marathon.

a reply to: Aazadan

Historically it's the well off societies that revolt. Those who are oppressed and have very little usually don't have the means to revolt. Hitting rock bottom isn't what does it, being successful enough that there's an unhappy group with financial means who think they have better ideas is what sparks revolutions.

Yes and no.

Revolutions have happened anywhere and everywhere under numerous circumstances for numerous reasons throughout history.

All it takes is enough pissed off people who are fed up with the situation, decide that there is something they can actually do about it, and all hell breaks loose.

Political reasons, economical reasons, starvation in the streets, lack of work... you name it.

But you are correct in that most modern day peoples (1st world nations) are currently quite comfortable in their lives (even if it's payday to payday), don't want to risk losing anything, and therefore sit back and shut up.

originally posted by: onequestion
This thread is not about my posting history or insulting posts so please refrain from childish nonsense and one liners I'm actually interested in being informed by members I have a lot of respect for.

I've come to the realization that big government red tape is whos responsible for the limited economic growth and corporate expansion and consolidation.

From;

Unemployment
Workman's comp
Insurance
Medical insurance
Arbitration
Social security
Medicaid

And,

Certifications
Business license
Zoning
Insurance

And I'm missing things here but please feel free to add them.

So my overall point is that these factors are limiting small business and creating a paradigm where only those with capital can enter the market. Either you take on an angel investor and sacrifice a % of your business or you take out a massive loan in order to cover overhead.

Also I believe that this is causing business to stop or slow down expansion by limiting entry level positions because entry level positions cannot produce enough of a value or return to cover the overhead to justify their position in the first place.

This is stopping millenials from entering the market. It's also forcing the everyone has to go to college paradigm putting an entire generation out of work and in removing their purchasing power by putting them in massive debt.

There is an old book called "The Jungle" by Upton Sinclair that will answer many of the whys about why we have some of these things.