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Thread: Which is more important right now- a balanced budget, or low unemployment? Reply to Thread
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  Topic Review (Newest First)
10-17-2011 10:51 AM
snowjeeper no, but there is policy where it makes more sense to do that than horde billions of dollars and pay your useless executives 300 mill each.
10-17-2011 03:50 AM
blondieyo
Quote:
Originally Posted by snowjeeper View Post
Yes, they have increased profits - without hiring people. Policy needs to change to stop and prevent this from happening - but I have no idea what that needs to be. I'm sure smarter people do.
Alright, there is no way in hell there will ever be any policy that stipulates a business must hire people if they are making x amount of profit or their profit margin is increasing.
10-15-2011 09:10 AM
snowjeeper Yes, they have increased profits - without hiring people. Policy needs to change to stop and prevent this from happening - but I have no idea what that needs to be. I'm sure smarter people do.
10-15-2011 04:26 AM
blondieyo A flawed view? Yes, definitely. But completely false? No way. The private sector are greedy sons of bitches and by being greedy, they'll generally increase a countries GDP throuogh making bigger profits, which is what you want coming out of a recession. Just because you have a large percentage of people unemployed does not mean the private sector is inefficient. After a recession there is a significant decrease in demand so businesses will obviously cut jobs because they can't afford to employ people that are not needed. It's called cyclical unemployment.

And yes I do agree that monetary and fiscal stimulus through government spending is what's needed for America and many other countries at the moment but what I was trying to point out was the logic behind what they're doing now.
10-14-2011 10:40 PM
snowjeeper No doubt, I'm not saying that the government is efficient at doing something. But what I am saying is that the assumption that "private" business doing it better is completely false.

17% of the working age adults are unemployed in this country, if not for government spending (borrowing really), people would be starving out on the streets right now.
10-14-2011 09:06 PM
blondieyo
Quote:
Originally Posted by snowjeeper View Post
What "sector" something is in has little to do with being efficient, it's more the size of the organization. I've worked in both public and private, and both small and large in both of those. All large organizations are inefficient.

Privatization is not effective for everything, just like publicization is not effective for everything. There are some things that the private sector just won't be good at providing - and some things they shouldn't be making a profit off of.
Would you agree that the government is in fact a gigantic organisation? I do understand what you're saying and I know that the larger an organisation becomes the harder it is to organise it and keep it efficient.
Again i'll reiterate on a previous point, this is NOT my personal view of what works and what doesn't. This was me purely trying to explain the logic behind NOT spending your way out of a recession, a classical economists perspective.
10-11-2011 09:56 AM
snowjeeper What "sector" something is in has little to do with being efficient, it's more the size of the organization. I've worked in both public and private, and both small and large in both of those. All large organizations are inefficient.

Privatization is not effective for everything, just like publicization is not effective for everything. There are some things that the private sector just won't be good at providing - and some things they shouldn't be making a profit off of.
10-10-2011 07:08 PM
blondieyo
Quote:
Originally Posted by snowjeeper View Post
The difference is that the private sector can easily charge more money to make up for their inefficiencies.
It's not just charging more, it's actively seeking to keep costs as low as possible in order to make as large a margin possible. That's why privitisation is so effective.

A businesses goal is to make their business as profitable as possible, if it is profitable it's succesful. A government running a sector is less concerned with making a profit and more concerned with just covering their costs in order to offer a service. If they're just covering their costs the price of whatever they're providing will be less but they also won't be as tight on keeping costs low.
10-10-2011 02:58 PM
HoboMaster
Quote:
Originally Posted by snowjeeper View Post
The difference is that the private sector can easily charge more money to make up for their inefficiencies.
This is true and is reflected by a decline in consumer and employee benefits over the past 30 years. As new costs have arisen, they have been mitigated in some way or another by shoving the cost on consumers/employees. Cutting profit for the sake of efficiency is only ever a very unpopular last resort.

You can argue that because the private sector is profit driven, they do have a high efficiency rate just for the sake of making more money, (if you can make more money by running a tight ship, you will do it).

If you could make governmental agencies run on a system of non-critical incentives, they would probably be more likely to have higher efficiency rates. Incentives often corrupt institutions though, so it's a bit of a quandary.
10-10-2011 12:11 PM
snowjeeper The difference is that the private sector can easily charge more money to make up for their inefficiencies.
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