

Sorry, Kids. We Ate It All. - rpm4321
http://www.nytimes.com/2013/10/16/opinion/friedman-sorry-kids-we-ate-it-all.html

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chrisbennet
There is no evidence that "cutting corporate taxes to zero" will cause
companies to hire more people.

(2012) New Study: No Evidence That High-End Tax Cuts Help the Economy:
[http://www.offthechartsblog.org/new-study-no-evidence-
that-h...](http://www.offthechartsblog.org/new-study-no-evidence-that-high-
end-tax-cuts-help-the-economy/)

(2012) Nick Hanauer's (banned) TED talk: "Rich people don't create jobs"
[http://www.youtube.com/watch?v=CKCvf8E7V1g](http://www.youtube.com/watch?v=CKCvf8E7V1g)

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mathattack
I still think we will muddle through it. Things that aren't sustainable don't
continue. People will start charging more to lend to the US. Systems will feel
stress. Health care will be rationed because there is no other way. Everyone
will work longer because there is no other option. We may need to inflate some
if our wealth away to lighten the debt load.

The wake up will be someone else's system collapsing first (Japan? France?)
which will cause global economic stress. After the flight to US dollars, our
borrowers will force us to get our act in gear.

~~~
jstalin
My bet's on Japan.

~~~
mathattack
I love Japan as a country so I hope you are wrong. The demographics suggest
you are right. The powerful interest groups that Friedman mentioned also exist
there too.

Two differences with Japan: First, their debt is domestically held so they can
avoid bond vigilantes. Second, as a country and culture they have been able to
come together and solve great problems when they get consensus. (They just
haven't had that consensus in decades)

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Retric
Nice how they just stuck in _cutting corporate taxes to zero_. Sadly job
creators are mostly small companies withy tiny tax burdens highly profitable
companies tend to grow little because there extracting profit vs increasing
the number of jobs in search of future growth.

~~~
ixnu
Do you have any evidence to support this? The data that I can find point to a
more subtle conclusion that does not fit this oft-repeated statement (myth?).

"We find that the relationship between firm size and employment growth is
sensitive to these issues. However, our main finding is that once we control
for firm age there is no systematic relationship between firm size and
growth."

[http://econweb.umd.edu/~haltiwan/size_age_paper_R&R_Aug_16_2...](http://econweb.umd.edu/~haltiwan/size_age_paper_R&R_Aug_16_2011.pdf)

EDIT:

I should say that it's not that small businesses don't create jobs, it's just
a particular type of small business (young ones) that create most of them.

Additional discussion -
[http://www.richmondfed.org/publications/research/econ_focus/...](http://www.richmondfed.org/publications/research/econ_focus/2013/q2/pdf/interview.pdf)

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Retric
Your missing the point it's not a question of size it's a question of
profitability.

There is a popular idea that reducing taxes on profits would spurn significant
job growth. However doing so in no way changes the math on how many job's
maximize profits. Further, profitable company's that higher people temporarily
reduce there profitability which directly reduces their tax burden and has the
same effect cheaply and automatically. Also, profitable company's can borrow
money to assist growth so if you look at things from an accounting perspective
removing all taxes on profits has a tiny impact on how fast a company can
grow.

Note, there are ways to change the tax structure to actually promote job
growth in the short term. Such as a reduction in payroll taxes for company's
that employ more people now than they did at any time in the last 5 years.
However, none of them change the long term math on what the ideal number of
employees for a stable company is.

~~~
ixnu
The implication (point?) of the research is that older companies (regardless
of size) create fewer jobs relative to younger companies.

I would disagree with the statement that reducing taxes on profits has
absolutely no impact on overall job growth. Furthermore, a reasonable
conclusion would be that reducing taxes on young (and almost by definition,
small) companies independent of profitability would have a greater beneficial
impact on job growth than reducing taxes on highly profitable and older firms
(large or small).

Based on the research, maybe the best course of action for job growth would be
to reduce all taxes (profitability and payroll) for young companies regardless
of size and profitability rather than an indiscriminate scheme that reduces
payroll taxes based on time constraints (such as 5 years of expanding
employees) for all firms large and small.

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jdmitch
_Whenever Druckenmiller (a friend) is challenged by seniors, who also come to
his talks, that he is trying to start an intergenerational war, he has a
standard reply: “No, that war already happened, and the kids lost. We’re just
trying to recover some scraps for them.”_

Are there still any scraps? I thought you ate it all!?

~~~
wheaties
But unfortunately SS only worked when more people were joining the workforce
than were leaving. Also, the life expectancy was not as great. SS is an inter-
generational transfer of wealth, decided by our parent's parents but paid for
by the children of each generation.

~~~
richieb
Unlike in the past when the elderly lived and were supported by their kids....

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tekalon
I don't know. I see that currently due to the recession. My siblings and I
have been supporting our parents in some form or fashion for years (and they
aren't even close to retirement).

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wiremine
I keep wondering: if we applied 50% of the effort we applied to stopping SOPA,
what would the world look like?

~~~
twoodfin
Assuming "we" is the young, tech-focused, urban demographic of hn: At least
from my anecdotal experience, that demographic did apply an awful lot of
effort in 2008 to get the President they wanted, a supermajority in the Senate
they wanted, and a House majority they wanted. Did anyone think that a
Washington that looked like that would have any incentive at all to modernize
(sorry, "privatize"!) Social Security?

