Firing Freeze

Discussion in 'Economics' started by tradersboredom, Jan 11, 2009.

  1. tradersboredom

    tradersboredom Guest


    ' the employees are also customers of the cars'

    theory is that if auto industry lays off workers other industries will lose revenue and business and they start to layoff workers.

    what you have is a dominoes effect of layoffs companies dependent other companies who failed or went bankrupt also go bankrupt. etc etc.

    layoff autoworkers wont' buy homes or new cars or electronics and have a ripple effect on the economy.

    luckily the gov't sector is like 40% of the economy or 40% of jobs dependen on gov't sector which is the cushion of the economy
  2. luckily the gov't sector is like 40% of the economy or 40% of jobs dependen on gov't sector which is the cushion of the economy

    We'll probably get even luckier if the gov't hires more people.
  3. That would be "good" because it would alleviate unemployment. :cool:
  4. BabyDrew


    Too bad the economy is driven by supply and demand, not consumerism and employment...otherwise this would make sense.
  5. How can you have supply and demand if no one is earning money to buy things (demand) or working to produce things (supply)?
  6. clacy


    Where do you think supply comes from?

    Where do you think demand comes from?

    Maybe I should have reversed that, because demand forms first, then supply, but the fact is without jobs, you have much less demand, which means less jobs.

    And if you don't think the economy is driven by employment and consumerism, please tell us what it's driven by.

    Supply and demand = employment and consumerism

    **Disclaimer** I in no way endores a firing freeze or the expansion of the government in this situation
  7. We're all eagerly awaiting the time when Gummint employs 80% and the private sector employs 20%. The economy will be "bullet proof" !
  8. burn8


    I have been saying for years that the govt should hire everybody. Next step should be to bump the minimum wage to $30-$40/hr.

    Then everyone should call in sick for the rest of our lives and enjoy a comfy early retirement.

  9. BabyDrew


    Demand: If you can explain where this comes from, then you'll be a rich man. Demand just happens on its own based on whatever people happen to want at any given time. It doesn't have anything to do with whether or not people have the means to acquire this object...only that people want it.

    Supply: Obviously, this is how much of any object is in the marketplace. Supply has nothing to do with the production and labor that prepares the commodity, just how much is in circulation.

    Error in fiscal policy comes from the misconception that employment is the same as supply and consumerism is the same as demand. That is not true.

    The best way to describe it is with a commodity that is not produced by human labor. Depending on your location in the world, fresh water will vary in price. Water in the Saudi Arabia costs more than water in Michigan. The demand for water is the same in both places (people need the same amount of water everywhere) but the supply of water in Michigan is virtually infinite whereas the supply of water in Saudi Arabia is almost non-existent.

    The argument that employment increases demand is false. Demand exists because people always want more stuff. The demand for housing does not disappear when nobody has money....everybody still wants a house. That kind of thinking develops a ponzi economy where people build cars to make money to buy cars...the only way to sustain that economy is for more and more people to build and buy cars (kind of like the housing and credit bubbles).
  10. I think your definition of demand is not being used in the economic sense of the word. Demand in the economic sense means the ability to buy a good you want. Saying "everybody still wants a house" is not demand if they have no money to buy it. That is desire/want not economic demand.

    Both supply and demand are needed and are essentially the same thing. Nobody would be producing goods/supplies if there was no demand and there would be no demand if no one was making money by producing goods/services. Demand is a better economic driver with healthy competitive supply only because there are more people searching out the most cost effective, efficiency and quality wise, goods/services available.
    #10     Jan 12, 2009