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Old 10-18-2012, 02:37 PM   #75
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Default Re: Unemployment Drops Below 8%, Conservatives Cry Conspiracy

Originally Posted by KevinNYC
Joe there is something in economics called a multiplier effect. So the effect is not one to one. Those construction workers would have a higher income and they would pay taxes on that and they spend more money on lunches at work and transportation, work clothes, beer and tips at their local bar.

So not only does the construction worker now have more disposable income, the restaurant owners and waitresses have a little bit more, the gas station owner has a little bit more and the clothing store owner and the bartender has a little bit more disposable income.

The real job losses in this current recession has been state and local workers. The private sector has created over 4.5 million jobs since unemployment bottomed in Jan 2010, however government jobs (which usually keep pace with population growth) have not only not kept pace, but are a down over a million jobs since Obama took office.

What's the effect of that? This estimate says with the multiplier effect

This is apples to oranges. Each taxpayer is not paying the full amount of the worker's salary, but a very tiny fraction of it.

All you're doing in this scenario is shuffling the money around. Instead of the taxpayers having it, the construction workers have it. Instead of taxpayers giving money to the restaurant/bars of their choice, the construction workers give it to the restaurant/bars of their choice.
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