Sunday, June 12, 2016
It's common cents
"What happens when you give rich people money?
They keep it!"
So said economist Dr William Sprggs at the Connectict AFL-CIO Convention this week.
It's something I've always thought.
It's common sense.
I have had times in my life when I was financially comfortable and other times when I struggled, due mostly to the many layoffs I endured before I started working in healthcare.
I have had times when I was on unemployment and food stamps.
I can guarantee you that at those times, if you gave me an extra $100, I would have spent it because I was in need.
If you gave Donald Trump $100, if you put it in his bank account, do you think he'd run out and spend it?
Would he even notice?
Of course not.
So, why is this important?
We hear so often that we must "grow the Ecconomy" to produce jobs and give people a better life.
We hear that we must give large corporations take breaks and incentives to stay in state and produce jobs.
The problem is.....
It doesn't work.
Giving rich people doesn't stimulate the economy and produce jobs.
Giving poor and working class people money does.
If we raise the wages of a minimum wage parent by $100 a week, they will immediately use that money.
They will buy groceries, and shoes, and books, and the people they buy them from will have increased sales and income, and if those people are small business owners, they will respend the money on supplies, an evening out at a local restaurant, or hiring one more employee because they are busier.
Investing money on the poor and middle class leads to a reinvestment, growth, and jobs.
An austerity budget like the State of Connecticut now faces does just the opposite.
A laid off worker stops spending in the community they live, income of the entire community decreases, leading to a shrinkage of the Ecconomy and a loss of jobs.
Giving tax breaks and incentives to small businesses, the poor and the working class creates a growing Ecconomy.
Giving tax breaks and incentives to Donald Trump, Hedge Funds, and the Wal Marts of the world does not grow the Ecconomy and create jobs, it shrinks it because the money is not reinvested at the same level that it is given.
The rich don't spend money,
They hoard it.
Its common sence.
And common cents.