Comments | talk_politics: An Important Question

meus_ovatio in talk_politics

An Important Question

Mar 18, 2011 18:49

States in America provide, on their own, about 50 billion dollars of tax incentives to various companies to lure them in and provide jobs. The financial sector, if you are not aware, recently received Billions upon Billions of dollars in order to stabilize our economy. The auto and airline industries have also received their share of help. Our ( Read more... )

stimulus, economy

Comments 22

policraticus March 19 2011, 00:54:16 UTC

No. But we treat it that way.

(The comment has been removed)

stewstewstewdio March 19 2011, 01:52:40 UTC

a child with a special need or disability, and also gifted IQ

Yes. We are military savants.

Transition transmission surferelf March 19 2011, 02:13:48 UTC

I think most of this has to do with the transition from an industrial economy into something else. The old systems don't work the way they used to, and we haven't yet figured out the new ones. Until we do, there will be a lot of bumbling and fumbling and such.

Re: Transition transmission meus_ovatio March 19 2011, 02:14:21 UTC

Oh great, the economy is a pissed-off teen.

Re: Transition transmission a_new_machine March 19 2011, 14:38:53 UTC

This exchange needs DQ'ing.

Re: Transition transmission sandwichwarrior March 19 2011, 16:14:36 UTC

I 2nd that motion.

redheadrat March 19 2011, 04:17:02 UTC

Tax incentives work since there are pros and cons to building value in every locality. By bringing work to the state, jobs along with individual payroll taxes are gained (regardless of company profitability), and welfare expenditures are reduced (sometimes).

So when done right, the state will have net $ benefit even with zero taxes being collected from a business. In addition to that, teh tax incentives usually expire (10 years in Philadelphia), but most companies stay after such term.

Auto industry should have gone through a bankruptcy after the first round of government loans defaulted.

Airlines don't really get help from the government, usually quiet opposite.

Farming industry is a different story. Government subsidies keep US farming ahead of the curve. USA is currently one of the handful of countries that can easily feed itself with no imports of any food. Take away the subsidies and the supply will dry up.

I think that USA should stop subsidizing food export programs.

meus_ovatio March 19 2011, 04:18:54 UTC

But who cares if State X gets job over State Y? That isn't economic growth. That is just placement issues. The business is already there and already going to operate, it's just a question of where, and I don't care of Alabama or Washington gets them. States aren't separate economies. I can't imagine why anyone would ever pit a nation against itself economically like this.

redheadrat March 19 2011, 04:26:26 UTC

States are fairly separate economies. Many states have bigger budgets than some European countries.

You also have to realize that many businesses are not actually here, they don't exist in the economy yet. Often the start-up costs along with more draconian taxes (top line revenue vs. bottom line income) prohibit establishing of a business in one territory, but make it possible in another.

When BMW built its plant in USA, they did it only because of some clear tax and customs incentives. They could build that plant in Mexico with ease.

Lastly it is about getting businesses to the excess capacity points. When you have an excess capacity, you make incentives, when you have scarcity you withdraw them.

meus_ovatio March 19 2011, 04:29:56 UTC

Lastly it is about getting businesses to the excess capacity points. When you have an excess capacity, you make incentives, when you have scarcity you withdraw them.
That's a nice hypothetical for a command capitalism directed by the rational agents of a centralized authority... but it has nothing to do with how it actually works.

States are fairly separate economies. Many states have bigger budgets than some European countries.
I don't see what the arbitrary geographical and political lines have to do with the actual economic map. We are designed to not be fairly separate economies. They don't start and end at the border.

Thread 13

sandwichwarrior March 19 2011, 16:25:42 UTC

To piggy-back on what surferelf was saying I think a large part of it has to do with trying to enforce the "status-quo" rather than adapting to a changing dynamic. Holly crap _____ industry as we know it is disintergrating! Did anyone ever stop to think maybe that's a not such a bad thing?

Instead we get, "oh they're too big to fail"

The Dinosaurs smell a change in the air, and roar their defiance.