Slashing spending is only part of the answer and sometimes makes it worse.. .

[Paula Sims]

OK, this is part rant, part editorial.

Yesterday my husband was downgraded from full time worker with paid vacations, sick days, and holidays to temp worker - when we have work, we'll call you. That's all he's getting paid for. He's an engineer (process, petrochemical), Yale/MIT educated, and 62. All flags for - this is your last shot and you're lucky to have this. Because of medical issues since literally 2 weeks after we were married 30 years ago, finances have been tight although I have good income from my very stable job of 30 years and that's where we get our insurance. But enough about us, here is the parallel. . .

The reason hubby (and several other staff) were let go were because they weren't billing time -- too much overhead. The boss is a greedy SOB and wants a certain profit margin, won't reduce his billing rate. My husband has even taken unpaid time off to keep his job (which did save him) but his unbilled time was still too high. So instead of lowering the company's billing/charge rates or getting rid of the corporate perks like 35 garage parking spaces at $500/mo - you know, things that keep the managers happy and fat - they take it out on the people that need the money.

However, there's one part of the equation they don't bother asking about -- how do we raise income? Why aren't the sales people out there getting jobs? Why isn't management finding out why they aren't getting jobs?

So here's the parallel to this country - there are ways to cut costs, and we all can agree on that. However, cutting benefits to those who need it isn't the way to do it because if they can't afford to buy things, the economy won't stimulate. You HAVE to raise taxes on those that don't pay their fair share -- that's the basics of accounting: ASSETS = LIABILITIES + EQUITY. It's called a balance for a reason. And in fact, looking at the equation, if you increase Equity (Taxes - income) AND liabilities (stimulus spending), you'll increase assets. If you slash equity and liabilities, assets decrease.

And before you try guessing which company it is -- don't bother. We have at least 5 friends in the same position.

[guillaumeb]

1. And you are not alone in this. Very well said.

And your husband is an engineer. One of those high skill jobs that supposedly will never go away. A job that laid off union workers are supposed to retrain for.

A friend of mine works for an insurance company. They laid off their entire IT Department and outsourced the work to India. More of those high skill jobs that are suggested as the solution to outsourcing of manufacturing.

And to add to your argument, 70% of GDP is composed of consumer spending. What affects consumer spending affects the GDP, which in turn affects the tax base in a community which further affects community workers, etc. A downward spiral to nowhere.

[dubyadiprecession]

2. I know what your saying.

Henry Ford realized this too, he paid his workers more so he could sell more of his cars.

[Warpy]

3. Face it, America needs a raise

more than the people in this country need anything else. With a substantial rise in the minimum wage, more people will be paying taxes, more people will be out there with the money to demand more goods and services, and the pipeline the supply siders have choked for the last 40+ years will actually start to move.

A rise at the bottom has a ripple effect all the way up--that's how the money pump works, bottom to top. Siphoning money off the top to recirculate it at the bottom through public works jobs is how a wise government goes about restarting a stalled pump while sowing the seeds for a large and stable middle class.

Part of the proof of this is the dead silence from doomsayers six months after every raise at the bottom. Before it, everybody was going to go out of business and a fast food burger was going to go up to ten dollars. After it, the burger is the same price it started and demand has increased that the franchisee is thinking about opening up a couple of new restaurants to handle it. That's how it works.

Cheap labor conservatives have had a long run but their economic theory doesn't work. Even the plutocrats are getting a little testy since it's harder to get their numbers to go up using hedge funds and accounting shenanigans.

It's time to get things back on track. Raise taxes on the rich and corporate. Give the bottom a big raise in the minimum. Repair the infrastructure for the next big boom because with money recirculated at the bottom, it will happen.

[PoindexterOglethorpe]

4. Without knowing any more than what you've posted,

I want to suggest that the fundamental problem is people with MBAs, or even undergraduate business degrees.

Some years back I took several business courses, thinking I might make that my major, and I was somewhat shocked to learn that a fundamental teaching in business is that if you can run one business, you can run any other. The notion that different businesses might require different skill sets was completely off the table. And by then, 1978, most businesses were being run by men who'd not necessarily ever worked in that particular field, but had instead been hired because they had a business degree of some sort, and maybe experience running some other business.

So if you'd been in fast food you could now be in marketing for a chain of health clubs. Or be the CEO of a for-profit college. You get the idea.

Which is why people like your husband are left out in the cold. They are simply numbers on a balance sheet. The health problems aren't even on the radar for the company, no matter how much they matter to you two. They can cut him back to on call, not have to underwrite leave time or retirement, and their bottom line looks better. The human costs are completely irrelevant.

I suspect that the human costs matter a great deal in places like Sweden, a country roundly vilified by the lovers of Ayn Rand getting ready to run this country. I shudder for all of us.