Thursday, October 09, 2008

The Vicious Cycle

This graphic (shamelessly lifted from Morgan's post) says it all. And it ties in with this post (which has been getting a lot of hits from Google lately. At least people seem interested in checking out what the whole "jobs overseas" bit is about).

Of course, that's just the Jobs Overseas angle, and on a larger scale "State" can be replaced with "Federal" (if "state" can be taken here in the bigger meaning of the word "State", as in "Nation-State") and it still holds. In addition, "Businesses Move Jobs Overseas" is a subset of "Businesses Can't Afford to Hire Americans". So they either lay off Americans and hire nobody, thus shrinking their business and permanently employing fewer people, being less productive, adding fewer dollars to the taxable economic bottom line, further reducing government revenues ... or, they hire people overseas which might at least keep the corporate profits here in America where our government can tax them. Better for the government to tax more money than less money from the same company. Bottom line here is increasing taxes on companies has a detrimental effect on the company, the Americans working for the company, and the government collecting taxes from the now diminished company profits.

Economics is not a zero-sum game, ye Progressives.

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