re: Obama: Extending Unemployment Benefits “Creates New Jobs”

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Quick, name a consumer good that will be produced without consumer demand to drive its production.

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All novel goods are produced without a demand. You didn't know you needed an iPhone until it was produced. You were fine with your old flip phone. You didn't know you needed Windows on your computer, you were doing fine with MS DOS.

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All novel goods are produced without a demand. You didn't know you needed an iPhone until it was produced. You were fine with your old flip phone. You didn't know you needed Windows on your computer, you were doing fine with MS DOS.

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Demand for a novel good is definitely there before it is produced. Tons of money is poured into research to calculate this demand before production begins.

But in order for there to be demand, consumers must have money.

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DOesn't take a genius to figure out consumer spending creates jobs.

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Nor does it take a genius to realize that those same benefits they receive aren't 100% of the income they would otherwise receive with a full time job; hence, they aren't going on a spending spree contrary to what you may think.

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What money are you talking about?

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Are you serious?

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Well, yeah. The "money lying around waiting to be invested", who has that and why is not invested now?

For example, I hope none of these corporate entities with lots of cash on hand are not stuffing it in upper management's mattresses. That cash is currently invested somewhere.

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The "money lying around waiting to be invested", who has that

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(Corporate) Cash stockpiles have grown by about 2% from $1.45 trillion at the end of last year, and up 81% from $820 billion at the end of 2006.

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and why is not invested now?

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Because, like I've been saying, many investments are inherently risky because the demand is not there.

Obama should extend benefits especially if he is going to continue to constrain job growth through rediculous stances on energy production and transportation as well as all of the jobs he has cost the US economy with the ACA

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But my demand for the $2 million dollar was there before the money. You were saying that demand (or at least I understood you to say) demand does not exist without money.

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And it doesn't. Desire does not equal demand. Desire plus means equals demand.

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Your assertion: NO demand----->get money----->demand exist----->buy new goods

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We are talking about basic necessities, and the desire/need for those is always there.

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Was acquiring the money an exchange of newly created value or redistribution of existing value? If it's redistribution of value then nothing has been added to the economy.

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It's not an exchange of value, it's an exchange of money. An economy only works if money keeps flowing, creating value in the process.

Look, I am as against handouts as you are, but I'm simply trying to explain the principle behind the idea that extending benefits creates jobs. And the principle is sound and it works both in theory and in practice. Obviously, there are limits to the effectiveness and at a point it becomes detrimental, but that is a different argument to make and one that I'm not going to participate in.

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Every single dollar that goes to unemployment benefits was taken out of the economy in the first place.

-1+1=0.

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All dollars are not the same. An extra dollar in the hands of a poor man will get put right back into the economy. The movement of money is what creates value and jobs.

It's a really simple concept, and the effect is similar to just adding or subtracting people (customers). If we were to lose 10% of the population, that would quite obviously lower demand for consumer goods, and in turn lower the need for production and jobs. The reverse is also true. If we increase the number of people with money in their pockets by 10%, there will be a corresponding increase in demand for consumer goods, so production and jobs will increase accordingly.

Obviously, a huge economy is much more complex than this, but there is no escaping the simple truth that more customers leads to more production and more jobs, not the other way around.

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Purchasing power comes from more efficient/better production, which is a product of capital investment. These welfare programs take that capital investment OUT of our markets. This crushes purchasing power..the very thing the "poor" need the most.

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This makes absolutely no sense. It's as if you are just stringing words together trying to bullshite your way to a point.

If the "poor" have no money, then they cannot buy any of the goods you claim will be inexplicably produced so efficiently in the absence of demand. Everybody needs purchasing power, but without money to utilize that power it is irrelevant.

You have an idea of how you want the world to work, and you want it so badly that you ignore common sense and logic.

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This really can't be refuted

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Unless, for example, there is an oilfield to be developed but the government won't allow you to invest in developing it........

Demand can be there but profitability not be there. If you raise the price to where it is profitable, then the demand goes away. On the other hand you may decided to hold off on investment because you have no idea what the government is going to do in terms of regulation and taxation. Why not hold off until that calms down? We have an extremely business hostile administration.