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Kasz216 on 23 November 2010
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HappySqurriel said:
binary solo said:

Funny thing is the capitalist system relies on a minimum level of unemployment to keep wages and inflation down, and hence profits up and prices down. 4% unemployment as about as low as a capitalist system can go without putting significant upward pressure on wages, and with upward pressure on wages is upward pressure on inflation. Inflation is a much more insidious erosion of wealth than taxes, because in general the taxation % remains pretty stable (in stable economic conditions) but inflation continually, irrevocably and inexorably diminishes your purchasing power. And inflation reduces profitability.

People who bleat about taxes haven't got a clue. Its inflation that gets you in the end. It's inflation that means your retirement savings plan is never worth what you think it will be worth. It's inflation that means you can't afford as much stuff this year as you could last year (assuming you've kept your job and same rate of pay). It's inflation that means your power bill keeps going up. All the while taxes remain the same year on year on year. Every extra dollar you earn may only mean another 60c in your pocket after income tax, but next year that 60c will only get you what 57c buys you this year, and the year after that it's only gonna get you 54c worth of stuff.

So killing off the unemployed won't do much to your taxes, but it'll make inflation spiral out of control. That will surely make those who are working and paying a tiny bit less tax poorer in real terms.

Having lived through inflation caused by a labour shortage, and having dealt with inflation caused by reckless government and central bank policies, I will take inflation caused by a labour shortage every day. When you have inflation caused by  a labour shortage your wages will increase at a rate far closer to inflation, and since the value of your currency is not being destroyed, products and services made outside of your region will become more affordable; and (since there is  a labour shortage) you're far more likely to find a job opening for a more "senior" position, and it is easier to increase your standard of living.

When you have a government that kills of private sector jobs though high taxes, moronic regulations and crowding out along with inflation caused by the central bank devaluing money you end up with stagflation. In this environment you're lucky if you can find a job so it is difficult to get a raise that comes close to the rate of inflation, it is difficult to find a job in a more senior position so you can't increase your "pay-grade", and the cost of both foreign and domestic goods are increasing at an alarming rate.

 

 

Now, back to the original topic ...

The unemployed should (obviously) not be killing themselves, but a lot of the unemployed need to reconsider the kinds of jobs they're looking for. Long before you hit the 99 week cut-off (in the United States) you should have started to consider that your choosen career path may not be viable anymore, or the location you're living in might not be the right place for you anymore.


How about Inflation caused by reckless government spending and unemployment?

I mean, currently they want to spend more because they don't think our inflation is high enough.