Economics, ORLY?

It is not the government's responsibility to create jobs. It is not the responsibility of the private sector to create jobs. Jobs are a result of a growing economy and expanding wealth. It is the responsibility of the government to produce an environment (without extended and over active interest) conducive to promote the growth of the economy.

Thus, let us address the common liberal claim: Republicans and Conservatives, alike, give subsidies to companies who ship jobs over seas.

Lets break this down into parts: (1) creating jobs, (2) out sourcing, and (3) subsidies.

How are jobs created? Jobs are created when supply and demand allow jobs to be created--mainly when demand exceeds supply. Thus, labor, a variable resource, is increased to help increase the supply of a given product. It is not economically viable to hire more workers when the economy is bad. It is not economically viable to hire labor when one's products are not in demand. It is not economically viable to hire more labor when the necessary labor is already available.

A company must have the resources to expand its labor force. When a company is taxed, it limits the available resources, limiting a companies ability to hire labor, open factories, buy supplies, etc. Taxing corporations limits available resources. It is said that companies don't pay taxes, this is true, they merely pass on the taxes to the consumer. However, taxation does limit resources, an important fact for later.

Out sourcing? Companies out source because it is cheaper to produce a given product outside of the country than inside. What makes it difficult for companies to produce in America? Taxes. Labor is a variable resource, but it is equivalent regardless of location. A manual worker in Mexico is financially equivalent to a worker in America--but the cost is cheaper. However, managerial and technical crafts are not as equally transferable, thus, many American companies shipped its managerial staff to train cheaper labor, and then get down sized. Out sourcing is a natural capitalist response to cut costs and produce a profit. People are not out sourced out of fairness, dislike, or disdain. It is a matter of numbers. This will be discussed later.

Subsidies are as old as manufacturing itself. It has been proved that subsidies and incentives are better at getting companies to reform its methods than punitive taxation. Would a company be more likely to produce an electric car by offering a huge bounty and incentive for those companies that do, or to punitively tax for companies that continue to produce gas consumptive cars? If the answer is not obvious, you are a fool.

There is no morality, no personality, and no individuality in the market system!

Stop trying to make it happen! It is an emotionless system, and that is okay!

So let's look at all of the factors:

You are now the proud owner of a toy company, RepublaToys Inc. You became very popular with your line of political action figures. You have successfully expanded your business from a sole proprietor, running from your home, to a publicly traded corporation. You have recently bought many factories across the country and have expanded your labor force. However, this is your first year as a corporation and its tax time. The current corporate tax rate in America is approximately 38%.

Thus, when next year comes around, you need to get your profit level up. You did well last year, but investors are looking for a better return. You discover that Ireland is inviting corporation to build there, their corporate tax rate is 12%. Thus, you close 1/2 of your factories and ship them to Ireland. The minimum wage is higher in Ireland, but you are not expected to pay benefits because of Ireland National Health Services (NHS).

Your second year in business you make a killing. you show immense gains and your investors are pleased. However, Americans are complaining about the lack of jobs you produce. Thus, the federal government offers subsidies to your business if you will agree to make 5,000 jobs this year. You open a new factory, make the jobs and receive the subsidies. You make a profit from your factories in Ireland, but your American factories break even.

The next year, there is an economic down turn in America, that only slightly affects Europe. You are forced to lay off more workers, until you decide to move your head quarters to Ireland.

Thus, America has lost lost of jobs and necessary revenue to run the government. How do they respond--they increase the corporate tax rate to 40%.

So you see, this whole system of creating jobs and giving subsidies falls second to the free market system. If you f....funk with the system, you funk with the available jobs.

Simple solutions:

1. Lower the corporate tax rate; even better, get rid of it!
2. Stop allowing Non-profits, who in their very nature do not worry about making a profit, control what is acceptable for "socially beneficial" corporations. I.e. Greens: get over it! Socialists: leave the money alone and jobs will be created; Liberals: government cannot do what free markets can
3. Offer subsidies and incentives for companies who open factories, develop new technologies, and create market viable solutions to the worlds problems

Simply put:

• Oil companies: let them drill, tax them less, have more money for your stupid pet projects
• Detroit Car Co: get rid of emissions and mileage standards

Liberals, leave the market alone!