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by zdragnar 1833 days ago
They aren't related at all, because the federal budget and revenues don't need to balance. They rarely ever do.

On the other hand, tax credits can be (but arent guaranteed to be). That is, if a tax credit incentivizes creating jobs that would not have existed (in the US) otherwise, those jobs end up also stimulating other economic activity. Tax incentives at the state level tend to be closer to zero sum (or a net loss) if the jobs would have been created anyway, or when thr incentives aren't strictly tied to quantifiable completion metrics like factory completion, number of positions filled, etc. (Much ado about Foxconn in Wisconsin, etc)
1 comments
Ericson2314 1833 days ago
Huh? Yes federal debt doesn't matter but that's why they are similar—they are both shifting power to capital away from labor.

The fact that governments try to do Keynesian by making manufacturing jobs in 2021 kills me. We're decades past the point where those sectors were sufficiently unproductive to benefit the workers as they did in the glory days. Boost demand directly (UBI), keep an ey on imports, and let private capital fend for itself.

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zdragnar 1833 days ago
> they are both shifting power to capital away from labor

This doesn't make sense to me. There wouldn't be labor to empower if the tax credit was one of the factors that determined whether the plant would be opened here or not.

Zero-sum would imply that, were the tax credits not handed out, the revenue would instead go to some other program- except that in this scenario, there is no revenue without it.

Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.

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Ericson2314 1832 days ago
> There wouldn't be labor to empower if the tax credit was one of the factors that determined whether the plant would be opened here or not.

Think owners vs non-owners. The non-owners don't cease to exist if they are unemployed (or underemployed). We live in a world with massive material surplus, so the idea that we can't afford these people's basic needs without the plant is just wrong.

From that perspective, if the government is propping up businesses without propping up a weak labor market (either by more demand or fewer working hours), it's perpetuating system where employers have too much leverage.

> Zero-sum...

Right now the US federal government is uniquely capable of running deficits. I'm not worried but zero-sum in that sense.

> Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.

Yeah I don't want trade war, I want race to the top. Higher wages, fewer working hours, etc.

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Ericson2314 1833 days ago
Really the US should pay for UBI in Germany, south Korea, etc. to boost export prices there so it's a race to the top.
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imtringued 1832 days ago
This would require an international clearing union.
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Ericson2314 1832 days ago
How so?
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