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  • The Demand for Demand

    You can cut until you have no deficit, yet your problem will still be the same: growth.

    Yes, the American economy needs to find strong and wise areas to make cuts within all types of government services, but that’s not that the real issue. You can cut until you have no deficit, yet your problem will still be the same: growth.

    The real issue is demand and finally we are looking at the area of demand through job creation. There can be no extra or long-term demand, without Americans having long-term and sustainable wages, so they can be consumers again. It’s so simple – – when people work, they buy. When people buy, employers need more workers — and more workers create a greater tax base: it’s self-fulfilling.

    The real problem is that their have been very little incentives to hire, because most companies and small businesses are not only doing more with less, they are keeping a lot more of their money that would have went to salaried employees that they’ve downsized, so it will tough to make them move, just for moving’s sake — we will need to find a peripheral benefit that makes sense to them.

    The other problem is that there needed to be a demand shakeout anyway, because people were over-leveraged with credit cards, so after the implosion of 2008, people had no choice but to scale back and live within their means, many who not only had prodigious credit card debt, but they also just lost their jobs, so demand was also hurt because reality set in and people started saving more and buying less: also, the high unemployment adversely affected consumer demand, because with the help of unemployment insurance, people were buying essentials, as opposed to anything that might be considered a luxury.

    So we have to get enough Americans working again — get them deeply ingrained within the economy again, so that employers will see the benefit of hiring additional workers, both service and tech. The federal government also has to provide clarity on taxes and health costs, which would allow businesses to calibrate the additional costs or not to their enterprises, which would allow them make prudent financial forecasts about their offering.

    Lastly, whatever incentives and measures are incorporated, they must be done smart and fast, so the government might have to act antithetical to itself, and move fast, while focusing on high-performance, not rhetoric. What’s the alternative?

    Good luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals

    Filed Under: Gamechangers


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