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Possible way to help the economy? Answered

So, I was thinking for a few days, and have came up with a few questions, and some possible answers(solutions?) 1) Companies and buisnesses are loosing employees because they can't pay them, or employees are quiting because they aren't payed enough, and therefor, companies are loosing more money, correct? Well, what if people volunteer to work at buissnesses(for this example, we'll use a restaurant) to help out. Obviously, they wold have to be qualified, and still be "hired" In doing so, companies would more help, better work efficiency and hopefully, more buissness(more money) When they get more income, they can pay their volunteers and both the buissness, and the (now paid) vounteers make more income. 2)How are we loosing money? I never really understood how we're loosing money as a nation, and why the government can't make more. Who's to say that we can't print more money, and give it to people, and companies, and even other countries? 3) People can't buy products because of the price. Companies are raising prices, which means more people can't buy products. If companies and buisnesses were to lower prices, people would be able to buy the products, thus companies would make money. Maybe at a slower rate, but eventually companies would have more money to pay employees, and more money to hire and pay more employees. Employment rates would possibly go up, and so would the economy. What are your guys thoughts?

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Tool Using Animal

8 years ago

2. Printing money devalues the currency. 1. My yard needs mowing, I want you to come over and do it, maybe I'll pay you down the road some day. 3 This i don't even understand? Vaccines aren't free, you either pay for them directly or through a tax burden. 4. See 1. and toss in the credit markets drying up.

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3 This i don't even understand? Vaccines aren't free, you either pay for them directly or through a tax burden
I didn't know that.

My yard needs mowing, I want you to come over and do it, maybe I'll pay you down the road some day.
Last time I checked, your lawn isn't a company or buisness.

Printing money devalues the currency.
It all makes sense now...Oh wait. No, nevermind.

See 1. and toss in the credit markets drying up.
(if you mean what I think you mean) I don't mean print off billions of hundreds per person/company to use how ever they please.

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PKMRock Soldier

Reply 8 years ago

1. People can't volunteer because they need to spend their available time working- they are unlikely to sign a contract and become effectively unpaid employees just on the chance of getting a job later- they are better off looking for paid work or taking benefits.<br /><br />2. Printing money doesn't create <em>wealth</em>, it just means the same amount of money is a greater number of dollars, ie. inflation. Inflation due to printing money is a Bad Thing. If I suddenly say "everyone has a billion dollars", it doesn't make everyone billionaires, it just means money is worthless because everyone has so much. <br /><br />One notable example of a country printing money in response to an economic crisis is <a href="http://en.wikipedia.org/wiki/Zimbabwe">Zimbabwe</a>. Once there were million-dollar notes in circulation, the Zimbabwe dollar lost all worth and the only currency you could actually buy things with were stable international ones (US dollar, Euro etc.). By now the Zimbabwe dollar is so meaningless that the country's official currency is now, surprise surprise, the US dollar.<br /><br />3. Every product has a best price for the seller- higher, and they lose too many sales so get less profit; lower, and they don't make enough profit on each one so don't get enough profit.<br /><br />Prices do come down in a recession, but artificially lowering them further doesn't help businesses make profit. The only way they can be lowered is if the government subsidises by paying part of the price so the seller can reduce how much the buyer pays, which is basically an indirect government handout meaning the money has to come from the government.<br />

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RedneckEngineerPKM

Reply 8 years ago

which is basically an indirect government handout meaning the money has to come from the government.

Which in all actuality comes from the tax payers so your paying for it in more than one way and a lot less efficiently to boot.  Get the Government out of our lives as much as possible and let the markets fix themselves.

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kelseymhRock Soldier

Reply 8 years ago

That last point. I'm going to try to reconstruct what you think you were typing...

I don't mean print off billions. Just hundreds per person/company...

Are you able to do arithmetic? The population of the United States is approximately 340 million. If you multiply that by 100, you get 34 billion. So, in fact, you did mean print off billions. That devalues the currency and leads to substantial inflation. Look up "hyperinflation" on Wikipedia to learn more; a little research is never a bad thing... Oh, wait. Nevermind.

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Rock Soldierkelseymh

Reply 8 years ago

Except, I didn't say print off hundreds per person/company. Ever.
I said,
"I don't mean print off billions of hundreds per person/company to use how ever they please."

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thematthatter

8 years ago

1) Moral is a powerful thing. People DONT work for free. Even people who volunteer at organizations, everyone gets "something" out of it, even if its a feel good feeling. If your boss is a jerk or you cant feed your starving babies then your not going to stay at a company. And when you dont get paid for something you get bummed out and quality of work suffers. . 2)The government is always going to be in debt, it owes people in the form of savings bonds, owes money to other countries and other stuff. Printing more money is like writing bad checks, it makes your other checks worthless if you don't have the funds to back it up. . 3) Raw ingredients cost money, this makes products more expensive. Candy will be expensive this year because the price of sugar to make it. Candy companies cant lower the price lower than the price to make it, no matter how many stoners or little kids buy it.

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RedneckEngineer

8 years ago

1. Companies provide a service or product of some sort. When the government becomes involved in some fashion that effects the way a service or product is produced the price WILL go up for them. And they must raise the price they charge to make a profit. At a point where the price is too high for consumers to continue to use the service, they stop spending there money on it. Which in turn causes the company to lose money. A company is only in business to make money. If the company can't make money it try's to save money by cutting costs. Employing people is a cost just as much as lowering quality of the service or product. Eventually the company will go under. Who is hurt? The people employed, the customer, and the company. The only one not hurt is the Government. You want to fix things get the Government out of peoples lives. It's that simple. 2. We are losing money because the Government is not held accountable for the reckless spending that they do. Any time a government is not held responsible for its actions you are sure to see the fall of that country sooner or later. Printing more money is exactly what Goodheart said above. Nuff said. 3. See answer in #1 above. Its all a circle. Once the Government is involved things spiral downward. Now I'm not advocating no Government. What I am advocating is simple freedom. Get the government out of our lives and let the People fix things. Some people will be hurt, some will not, and some will excel. Thats the nature of things.

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Goodhart

8 years ago

#2: some background: originally, paper bills or notes as they were called, were contractual and binding agreements between the note holder, and the Gov. that "such and such amount of gold or silver was what the note was worth and it could be traded in for such. When it got to the point where there were more notes circulating then gold, they stopped being silver certificates or gold certificates .
From that point on, the driving force behind whether the dollar does well or not, is the faith people put in it, since it is no longer worth any actual exchange rate for gold and silver as it once was.

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Tool Using Animal

8 years ago

"My yard needs mowing, I want you to come over and do it, maybe I'll pay you down the road some day. Last time I checked, your lawn isn't a company or buisness." Oh I see, you are already weaseling out of doing free work. Excuses excuses ;-) "Printing money devalues the currency. It all makes sense now...Oh wait. No, nevermind." Printing money does not create wealth, it dilutes the value of the existing money, it makes everything cost more because your dollar is worth less.

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gmoon

8 years ago

1) The limiting factor here is the "volunteers," not the employers. If someone is hurting financially, can they afford to work for free? It's also a recipe for abuse--what if the employer continues to utilize the free labor after they are solvent enough to pay?

There is a watered-down variation of your idea at work--existing employees get reduced pay and furloughs, essentially "volunteering" to work for less... (none of which helps to foster the type of trust necessary to make the "volunteer" idea work.)

2) See this link on history of inflation (looks like they are pushing gold, but it's a decent synopsis.)

The photo below of a woman feeding a stove with paper money (Germany, early 1920's) illustrates what happens when governments print money indiscriminately. European monetary polices are particularly anti-inflation, as they've seen this multiple times in the past... They'd be the first to rebel; they were very miffed at the fed for dropping the funds rate.

Given all that, in the US we are indeed printing money at an alarming rate in an effort to stimulate the economy. It's a delicate balancing act...

3) Companies do indeed drop prices in hard times--at least when they have excess inventory. Eventually inventories dry up, and businesses cannot continue loosing money indefinitely. Add to that the higher cost of production (oil price jump last year, for instance.) Business try to fight higher prices by increasing productivity (increasing ratio of production : employees)--but that often means laying off workers.

Infl3.png