The common Conservative thread is that ‘big Government’ takes all the money via ‘high taxes’ so there is none left in the private sector to invest.
That is one of the reasons for the sequester. Cut the size of Government so that it reduces the tax burden on the private sector.
But with the Stock Market at record highs, corporate profits at record highs, why isn’t the private sector hiring?
Where is the private sectors investment in America?
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‘Here are two things that are true about the economy today’.
(1) ‘The Dow Jones industrial average is poised to set a new record as corporate profits stretch to all-time highs’.
(2) ‘There are still fewer working Americans today than there were before the start of the Great Recession’.
‘The fact that these two things can be true at the same time might outrage you. But it shouldn’t surprise you’.
‘Taken together, these graphs don’t tell us that corporations have utterly decoupled from the economy’.
‘When the economy crashes, we all crash together: corporate profits, employment, and growth’.
‘But when the economy recovers, we don’t recover together’.
‘Corporations rack up historic profits thanks to strong global demand, cheap global labor, and low interest rates, while American workers muddle along, their significance to these companies greatly diminished by a worldwide market for goods and people’.
‘A growing economy and lower unemployment should eventually give U.S. workers a long-deserved raise (and so should rising labor costs overseas that persuade more companies to hire domestically)’.
‘But improvements in technology and the ability of companies to hire locally as they chase worldwide demand are just two factors that should restrain any optimism we can keep corporate profits from gobbling up more and more of the economy. Workers still need help — and they certainly won’t find it in the sequester’.
From : http://www.theatlantic.com/business/archive/2013/03/corporate-profits-are-eating-the-economy/273687/