Macro

Recently, I read a post on Facebook claiming to show that Republicans & Conservatives are wrong in their contention that artificially (meaning: having the government raise it, as opposed to having businesses, themselves, change what they pay) raising minimum wage is bad for the economy, and bad for business. Reading the article, below, you can see the writer is desperate for something to prove people he/she politically disagrees with wrong.

http://www.politicususa.com/costco-proves-republicans-wrong-paying-living-wage-watching-profits-soar.html

This is nothing more than anecdotal, both on the part of the writer, and the part of the person that posted the article. A single, bad example, does not a valid point make. I’ll break this down, bit-by-bit: 1: Costco is not exemplary of the businesses that are endangered by artificial (remember my previous definition of this) wage hikes. The endangered species come in the form of smaller businesses, not multi-million dollar corporations. While Costco may claim it can easily absorb the additional costs, smaller companies (like comic book stores, the local dry cleaners, independent gas stations, independent restaurants/small chain restaurants, etc., service industries like rug cleaners or roofers, etc.) aren’t so easily able to absorb costs. There is this thing called “overhead”, and it is very much just as much a creation of the government that is trying to drive up wages, as the artificially driven wages. Costco makes millions of dollars, and there are quite a few of them, scattered across the country. A small diner or gas station doesn’t have that kind of revenue, but they still have overhead. This overhead comes in the form of national, state, county and possibly municipality taxation, regulation, etc. A small business that makes 1 – 2 million isn’t necessarily a thriving, booming enterprise. With the cost of overhead, a lot of that goes to paying those same taxes, I just got through talking about, as well as possibly artificially inflated wages, and, in some cases, medical benefits and other forms of insurance (such as an insurance on the business, which is part of overhead). Taxation is notoriously exorbitant; very rarely (outside places like Texas) will you see low tax rates. When Big Brother steps in, its not to help workers; if that was the case, then they wouldn’t have raised taxes into the trillion dollar range, just a couple of months back, during the so-called “fiscal cliff” fiasco (that Obama engineered with Taxmageddon). No. On the contrary. It is not for helping low-wage earners, but for scoring political points with them, and working to lock in their votes, and continued support for their political party (i.e.: the DNC). Increased wages only increases the overhead, and when businesses that don’t have the resources of a Costco face increased costs, then any rational person that doesn’t believe money grows on trees, or falls out of Uncle Sam’s ass, will do what they must: cut costs. This means that benefits may become more expensive, as they have workers contribute more to their own plans, or even the outright elimination of some of their workforce. Alternately, if they don’t outright start doling out the layoff notices, hours will be cut, or even slashed. So, let’s see how much they can enjoy their pay raise, when they’re working half the hours they were getting, before, or even less. 2: No business really pays for these artificial increases. Many businesses have said, outright and up front, when the government continues to squeeze them for money in the form of taxation without representation, to survive they pass additional costs onto the customers. When taxes are raised on businesses, those additional costs are reflected in how much customers are forced to pay for these goods and services. A business that makes hundreds of thousands will raise prices, just as a business that makes millions will. Don’t believe me? Take a look at how prices have gone up, over the last 4 years, on goods & services. Don’t think that Costco is above raising prices, and don’t think that they won’t. Like any other business, they’ve got a bottom line to meet, in terms of profitability. When their costs are increased, thanks to artificial wage hikes, that does absolutely nothing to change the fact that their business has fiscal goals to meet, and shareholders to satisfy. Companies that fail to meet those targets see sagging, falling stock prices, which hurts the company, and everyone in it. Costco is no exception. The instant they see anything that even remotely resembles a threat to their bottom line, they will resort to not only cutting back on hours, but increasing prices. It happens all the time. The person that posted the article on Facebook used to run a small business, and I’ll bet that he probably wouldn’t have been too happy if Big Brother suddenly hiked his overhead, be it in raising taxes, or forcing them to pay an employee more than he believes he can afford. 3: Overhead can be reduced. With the idiotic passage of the 16th Amendment, Congress had, officially, shown it was addicted to spending, and also showed it was, from that point, forward, ignoring the Spirit and Intent of the Constitution of the United States. Spending, from then, all the way up into the present day, was out of control and absolutely un-Constitutional. Increasingly, politicians ignored the law of the land, so they could rake in money from others, in order to fund their flavor of the week pet project or pork. These fans of stupidity are fanned by stupid sayings like “corporations aren’t people”. A major way to stimulate the economy; a serious way to increase wages and benefits is to nullify and repeal the 16th, and return to how Congress, originally, levied taxes. Spending should be handled, as the law states: Article 1, Section 9 of the United States Constitution: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of the public Money shall be published from time to time.” This means that all programs, bureaus and boards the federal government is funding, un-Constitutionally, would come to a crashing halt. ALL of them. As an example of how much Big Brother (the same idiots that came up with the idea of jacking up minimum wage in the middle of a possibly decade-long recession) has run the US into debt, let’s take a look at how much debt we’re really in: “According to the annual report of the Social Security system’s trustees, that program’s unfunded liabilities now exceed $18 trillion. Medicare is in even worse shape. The most recent estimate of its finances, also released this week, warns that Medicare owes $36.8 trillion more in benefits than it is expected to be able to pay for. And that is the optimistic outlook: it assumed that all the projected savings from President Obama’s health care reform actually happen as promised, something that even Medicare’s own actuaries are deeply skeptical of. If those savings don’t materialize, Medicare’s debt could actually top $90 trillion! Add it all up, and total US debt actually exceeds 900% of GDP. That’s somewhere in excess of $120 trillion. We are beginning to talk real money here.” http://m.nypost.com/p/news/opinion/opedcolumnists/trillion_the_shocking_true_size_tOxcrobUBUup9IEW3vQAhJ And this is the environment in which the Obama Regime wants to increase overhead for businesses? Unfunded liabilities aren’t the entirety of spending, but they are the vast majority, eclipsing even defense spending. This is completely the result of ignoring the Constitution, and refusing the honor the 10th Amendment. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, respectively, or to the people.” Not one spending program that falls under the heading of “unfunded liabilities” is the product of powers “…delegated to the United States by the Constitution”, and we’re paying the price for that. With the federal government’s insatiable lust for spending (which resulted in the creation of unfunded liabilities), they raise taxes, again-and-again, resulting in higher and higher overhead to live your daily life, as well as higher-and-higher overhead for the businesses on which you depend. These things are classified as “direct taxes”, and the federal government was never intended to tax individuals, directly, nor tax business entities, simply for existing. Article 1, Section 9 of the United States Constitution: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before direction to be taken.” Yes, there should be no such thing as corporate taxation, social security tax, FICA, capital gains tax, etc. If the government, especially the current regime, was interested in stimulating business growth, as well as seeing wages increase, they’d return to the Constitutional way of levying taxation. Article 1, Section 8 of the United States Constitution: “The Congress shall have the Power To lay and collect Taxes, Duties, Imposts and Excises to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;” (Note: the Constitution says “provide for the…general Welfare”, not PROVIDE welfare. That’s for another topic, however.) With the elimination of unfunded liabilities, that would be close to $100 trillion (that’s $100,000,000,000,000.00 USD) taken off the backs of the American taxpayers. Individuals would benefit, because they would get to keep more of their own money, as opposed to being victimized by confiscatory taxation, in violation of their 4th Amendment Right: “The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particular describing the place to be searched, and the persons or things to be seized.” Business would profit, by seeing a great deal of their federal-in-origin overhead vanish. When that happens, they will have more money. People with more money use it to save, and to go out and utilize the goods and services of businesses. Businesses that have more capital will expand. Expansion of business commonly takes on such forms as acquiring more equipment (which means buying it from other producers, benefiting their business), and even PAYING THEIR EMPLOYEES MORE. Fancy that. A federal government constrained by the laws, as put down in the Constitution to protect the public, would be forced to live within it’s means. Having less overhead, itself, it wouldn’t REQUIRE as much of others money to survive (and it isn’t surviving; even with revenues at an all time high, the government is still continuing to grow and spend, out of control, and demanding more and more money), and would constrain it’s spending to Constitutional ends, such as maintaining military forces, border defense, roads and travel, etc. To continue to fund these ends, the federal government could utilize: Duties/Imposts: The US could apply a modest tax on the purchase of goods & services purchased abroad. For instance: people purchasing vehicles from foreign corporations (Toyota, Porsche, etc.) could see a modest tax. Bringing in foreign foods, computers, etc. could see a duty applied. Exportation could also see a duty applied. However, excessive duties will result in such things as tax evasion, and possible tariff wars with other nations, as they apply their own duties to products Americans will utilize. Also, raising the prices of imported goods to prohibitive levels will render them unpopular, and cut sales. Imposing excessive duties/imposts on exports will result in greater trade deficits, such as what we’re facing, today. Excise: Placing an excise on specific goods can also fund the government. Examples could be the purchase of vehicles, gasoline, diesel, certain types of machinery, electronics, etc. Again, excessive taxation will not benefit the government, as they will price things out of the reach of people with lower incomes. Capitation: If the government absolutely has to tax directly, then it would be by capitation. States with higher populations would pay more than states with lower populations. California, for instance, would pay more than Rhode Island. All this revenue would only go toward Constitutional expenditures, thereby lifting a great weight off the backs of people and businesses, leaving them to do things like pay employees higher wages, without fear of their businesses facing insolvency. Social programs/social spending would be left to the People and the States, meaning programs like Social Security, Medicaid, Medicare, etc. People could go to their states for these programs, or to private entities. When these programs are put in the hands of the People and the States, they will become more efficient, and probably much cheaper. Social Security could be diversified by offering either state government run programs (such as the current federal government run program), or free market solution options. Furthermore, the States will be more effective in weeding out ineligible people, like illegal aliens, than the federal/national government has. Then, there’s the savings related to the much more limited pool size. As opposed to paying to support over 300,000,000 people, a state like Michigan would only have to pay for about 9,833,360 people. Some states, however, would still face problems (i.e.: California), due to inherent corruption, pandering to illegal aliens, selling out to unions, etc. With the program on a much more local level, it would be up to the People of California to do something about this. The bottom line is that, as I said, the article about ‘proving Republicans wrong’, was pure crap, and that it was clearly written by someone that has no grasp of business, macroeconomics, the Constitution, law, or too many other things.

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~ by virusx on September 14, 2013.

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