Well, now that the whole election-year aftermath is over, I’m resigned to quietly proving to myself that Bush is an idiot. One of his recent defenses for the Tax Cut was that it would put more money in people’s pockets, giving them more money to spend on fuel. “Pffffft,” I said. (The spittle factor was HUGE.) “That’ll just end up causing inflation.”
BUT WAIT, my poor, racked brain said. I was a wholehearted supporter of the Green Party in the last election. I voted for Nader (in New York, where it had no bearing on the outcome) based on his environment, worker’s rights and viable-third-party issues. One of the most important things to me was that he wanted to raise the minimum wage to $7.15 as soon as possible, to match the “real dollar” spending value of the 1960s.
I’m so sad. I can’t help but feel like I only liked that plank because I’m a college student making just over the minimum wage, even though I truly believe in a living wage.
Would raising the minimum wage result in massive inflation, as chasing the oil crisis with a tax cut would? Is there any way to defend a raise in the minimum without it causing inflation?
For all the bluster and blather surrounding Bush, you’d think that “proving he’s an idiot” wouldn’t be hard to do…
Can I see your crystal ball sometime? I wanna see what the lottery numbers are next week… (I seriously doubt that the tax cuts will cause much inflation…)
Well, sure, the stronger the economy is, the more likely it’d be able to handle a raise in wages. The economy isn’t as toughened right now as it was a year or two ago (damn Dotcom crash!), but it hasn’t (yet) fallen as far as some people worried.
Oh, and welcome to the SDMB. Just for future reference, political threads like this usually end up in Great Debates. So if your thread disappears, that’s probably where it’ll be. Just for your information.
I won’t go into a full-bore discussion about Bush or any other politicial issues, but let me reassure you that we’ve had some pretty dim bulbs as president and we made it. Short of revolution, there’s only so much damage one politician can do in four years, and the system’s set up so that there are a lot of counter-balances. Just the situation with Jeffords, the Vermont Senator, is a prime example.
Inflation would be a secondary problem. The most noticable problem would be the rise in unemployment. Price floors always create surpluses, it’s one of the first things they teach you in Economy 101. A minimum wage is a price floor for employment, so they’ll always be a surplus of employable laber as long as you implement a minimum wage. Raise the minimum wage, and you increase the surplus.
The only way to balance this is if the value of the wage itself decreases. This would be called “inflation”.
I just wish that such market rules still worked on oil companies and other near-monopoly markets.
(I seriously doubt that the tax cuts will cause much inflation…)