Smasharoo wrote:
Maybe make some effort to read the points I've already made before you post something I already debunked completely? Just a thought.
I suppose. An incorrect thought. There's no GDP benefit to wages over government benefits. None. Again, I'll ask if you understand why. I assume you don't, but watching you try is part of the fun for all of us.
You're kidding, right? Again with the "I'm right, but I refuse to say why" bit? Getting old and tired Smash.
I've explained in clear English why there is a GDP benefit to wages over government benefits. You still have not refuted my explanation. One might begin to suspect it's because you don't actually have one.
But just because it's fun to illustrate how casually I can speak on this topic, while you are limited to hand waving on the sidelines, let me explain this in even more clarity:
When an employer pays an employee to do something, it can only be because the employee's work produces a real economic gain for the employer equal to or greater than the wages being paid. Which means that the employees labor produces some increase in actual
consumed product (cause that's what generates revenue) equal to or greater than his wage. This
must be true, or the employer would not continue to employ him. Thus, given that the definition of GDP is the total of all realized (ie: valued via consumption) production within an economy, we can conclude that GDP is increased by at least the value of a workers wage.
If we simply hand someone the same amount of money in the form of unemployment (or any government benefit), we get the same consumption from it, but *not* the production. The labor he would have done isn't done. The GDP is thus going to be lower than it would have been if he'd been working. Thus, even if we can debate the degree to which unemployment prevents people from being employed, we can't debate the fact that wages generate GDP growth, while benefits do not.
Your argument is just plain silly Smash. It's like saying that a store owner can simply take $100 out of the register and hand it to a customer walking through the door and think he's going to increase his profits by $100 because of the increased sales. Consumption alone doesn't create economic growth. Someone has to produce something first, and then it must be consumed. Then, and only then, does it result in economic growth.
Edited, Dec 12th 2013 6:44pm by gbaji