I am grappling with the best economic model 4 Somalia, especially how the business value pie is shared between owners and staff so it leads to more spending and more investment opportunities for the business class to grow from.
There is two options. Trickle down or Govt interference on Wages. Now trickle down was even called voo-doo economics by Bush and is a Reagan legacy. It makes no sense practically either and has failed leading to a working poor to emerge in the west, post-reagan. The working class are working harder and living standards are lower since the 80s till today.
Housing prices should reflect 3-4 times the average wage in order to lead to a real-estate boom. Now Housing is 10 times the average wage, even two income households are struggling to have the same living standards of a single income household pre reagan. So this philosophy doesn't lead into a healthy economy by any stretch of the imagination.
So trickle down is out of the economic posture a govt should enforce, plus theoritically it makes no sense either becuz excess wealth thru tax cuts or lower wages will just lead to offshoring not further investment to create jobs becuz the workers are essentially poorer, leading to less demand, and therefore less investment response.
The liberals propose the solution is high wages will solve the problem, but it won't. Theoritically if we impose on businesses by law that the average wage must be 1 million dollar salary, this extra cost on businesses will not be shouldered by them and be passed on to the consumers leading to prices to increase. Infact it will only lead to businesses marking up prices to reflect the average income purchasing power. So this addresses the worker wage, but living standards won't change.
So the question is what the solution? Businesses/Govt must sit down to discuss their shared interests first. Our shared interest is to shift the poor to the middle of the pyramid, this will help govt in their tax revenues so it can do it's task around public investment, it helps the business class to make it's money continously work thru new investments to support the growing demand, not money that is idly sitting there and losing 3% value each year thru inflation.
If u have 100k sitting idly in an account, over 3 years u lost 10k waryaa thru inflation, this compounds even more if it's 30 years to the point ur capital is worthless. Saving accounts r only for day to day expenses, u must put all yourexcess money(after expenses) into investments, assets, etc. Heck even put it towards ur retirement fund, do something with it, dont let it sit in saving account. Even @Angelina knows this.
There is two options. Trickle down or Govt interference on Wages. Now trickle down was even called voo-doo economics by Bush and is a Reagan legacy. It makes no sense practically either and has failed leading to a working poor to emerge in the west, post-reagan. The working class are working harder and living standards are lower since the 80s till today.
Housing prices should reflect 3-4 times the average wage in order to lead to a real-estate boom. Now Housing is 10 times the average wage, even two income households are struggling to have the same living standards of a single income household pre reagan. So this philosophy doesn't lead into a healthy economy by any stretch of the imagination.
So trickle down is out of the economic posture a govt should enforce, plus theoritically it makes no sense either becuz excess wealth thru tax cuts or lower wages will just lead to offshoring not further investment to create jobs becuz the workers are essentially poorer, leading to less demand, and therefore less investment response.
The liberals propose the solution is high wages will solve the problem, but it won't. Theoritically if we impose on businesses by law that the average wage must be 1 million dollar salary, this extra cost on businesses will not be shouldered by them and be passed on to the consumers leading to prices to increase. Infact it will only lead to businesses marking up prices to reflect the average income purchasing power. So this addresses the worker wage, but living standards won't change.
So the question is what the solution? Businesses/Govt must sit down to discuss their shared interests first. Our shared interest is to shift the poor to the middle of the pyramid, this will help govt in their tax revenues so it can do it's task around public investment, it helps the business class to make it's money continously work thru new investments to support the growing demand, not money that is idly sitting there and losing 3% value each year thru inflation.
If u have 100k sitting idly in an account, over 3 years u lost 10k waryaa thru inflation, this compounds even more if it's 30 years to the point ur capital is worthless. Saving accounts r only for day to day expenses, u must put all yourexcess money(after expenses) into investments, assets, etc. Heck even put it towards ur retirement fund, do something with it, dont let it sit in saving account. Even @Angelina knows this.
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