Posted by tecwrg on 2/27/2013 9:40:00 PM (view original):
Posted by bad_luck on 2/27/2013 9:09:00 PM (view original):Why would anybody hire employees they don't need?
Posted by MikeT23 on 2/27/2013 8:11:00 PM (view original):So there's a magic deficit level that will make you want to hire employees you don't need?
Posted by bad_luck on 2/27/2013 7:33:00 PM (view original):No, that's what you're saying. You'd love for me to say but I didn't.
Posted by MikeT23 on 2/27/2013 7:30:00 PM (view original):So the answer is no amount. There is no amount the government can lower the deficit that would make you want to hire someone you don't need.
Oh, I see what confuses you. I didn't answer the way you wanted me to with a number.
I'll try to reword for you.
If I have the confidence in our government to not raise my taxes to create revenue for their out of control spending, I'd be more inclined to increase my expenses. As it stands, I don't think they can do it. I think my personal taxes and my business taxes will increase in order to increase government revenue to fund their projects.
So you're saying that your hiring decisions are not based on the amount of the deficit.
Get someone smarter to read, and explain, my response to you.
Awesome. What is it?
I guess badluck didn't find a smart person to explain it to him.
I'll answer your question first, tec, and maybe you can explain to him.
Most companies are overstaffed. They do this to cover for vacations, sick days, basic incompetence, peak demand periods, etc, etc. If they weren't, boards like this would go silent at noon on Tuesdays except for three unemployed dudes and a night shift worker. So, in reality, they have employees they don't need already. But, if you're not overstaffed, you'd hire an employee you don't need in anticipation of the need. Say your business makes $1000 day. You have a new contract on the line that will begin next month. You'll make $1200 a day and your already thin staff will be overworked. So, in order to properly serve your new customer, you'll need to add a worker. You hire someone a month in advance for training and evaluation. They make $100 a day. You've "wasted" $2000(20x100) in overstaffing but you'll make that back in 10 days next month and your new customer, or old customers, will not suffer because your new employee will be fully trained. That's a simplified version dealing with set numbers, employees and customers. That's not real world, in most cases, but it's why a business would hire an employee they don't need.
Now, applying this to badluck's micro-question, there is no magic number. I don't deal with specific numbers like that because that's not how it works. So it's a confidence level in our government. Both for me and for my customers and even their customers. So this is the answer:
"If I have the confidence in our government to not raise my taxes to create revenue for their out of control spending, I'd be more inclined to increase my expenses. As it stands, I don't think they can do it. I think my personal taxes and my business taxes will increase in order to increase government revenue to fund their projects."
And that's why an increasing deficit bothers people and affects business/consumer confidence.
2/28/2013 9:11 AM (edited)