Friday, February 25, 2011

Union busting bill passes Wisconsin assembly; multiplier effect forgotten

The famous legislation to strip public employee unions of collective bargaining rights has passed the Wisconsin state assembly, the lower legislative house.

Now, the question is how long the Democratic Senators can hold out, staying aout of state, with state trooers braying down their necks.

The recent local headlines say, "Will lower wages aid Wisconsin’s economy?," for example the area HeraldNet.

With the excited push, by Republican politicians (and growing numbers of Democrats) and some media allies, to eliminate jobs or drive down wages, people have forgotten their basic economics courses and the multiplier effect that they learned about.

Since the 1980s we have watched the evisceration of industrial jobs. Now we are seeing a trend in a similar trend with the downsizing of public sector work. But the policy shapers are forgetting the bad effects of reducing money circulation. in the idea of money circulation, When money is introduced to the economy, the circulating effect is a mushrooming of money everywhere as money is spent and the money will circulated broadly.
(For more detailed explanation of the idea, see this wikipedia summary or this summary.

In short, watch America slip in the direction of Russia, a large land, a large population, a declining standard of living.

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