Original_To:  BITNET%"politics@ohstvma.bitnet"
Newsgroups: bit.listserv.politics
Date:         Sat, 25 Jul 1992 22:59:00 EST
From:         the anti-elvis <199561011@VUVAXCOM.BITNET>
Subject:      brett's economic development speech

hi brett:

i'm going to give a simplistic overview of your plan to see
if i have it right.  let me know if i stray.

to create jobs in CT, CT needs to revise taxes so that corporations
have incentive to stay in/return to/come to CT.  this, i understand,
is a common technique, not only in terms of taxes, but also in pollution
control standards.

you pretty much opened the speech with this, after going on a bit
about small businesses.  now, i see how small businesses will benefit
from reduced taxes, but i don't see small businesses moving around like
that for tax reasons.  maybe i missed the point.

now, i understand that this is just the way things work in political/business
relations, but doesn't it seems sort of like one would be *bribing* the
company to give you jobs?

also, you said that much of your proposal could be extended to the federal
system, but this may not be one of those things.  on the federal level, if
a company moves from one point in the country to another, N people lose their
jobs and N other people get jobs in the new area, with a net change of jobs
of 0.  if we were to extend this to competition with other countries, rather
than simply between states, the result would be 1) US labor standards would
lower to match mexican labor, resulting in a significant decrease in the
standard of living for most americans, simply to keep the jobs in this country
(this is an option that very few people would stand for), or 2) many companies
move their operations into foreign lands and many people in the US become
unemployed (a common practice that many people are getting really annoyed at).

do you have any ideas about what may be done to keep companies from moving
their operations into other countries?

lets see.  the rest goes like this:  reduce taxes and reduce expenditures
even further, thus creating a surplus tax pool, that is divided into
the Education Pool and the Capital Pool.

Education Pool:  this money is used to educate the welfare recipients
(or is this to be extended more widely), with the assumption that the reason
that many of these folk cant get jobs is that they do not have the requisite
skills and lack the opportunity to gain such skills.  this provides a well
educated worker pool.

Capital Pool:  the state becomes a minority investor in new businesses for
on average 5-7 years and 10 years max.  the state provides services that
help those businesses survive.

if both plans are executed concurrently, then there will be an increase in
jobs at the same time that there is an increase in the number of people
with those skills ready to assume these jobs.  this reduces welfare expenses
and provides the govt. with investment gains, thus possibly enabling the
state to further lower taxes....

ok.  looks really good to me (i hope that your health plan looks as good :).
it seems to me that you would not be able to make the tax cut in the beginning,
in order to finance the investments that would pay off later.  the tax cut
would have to come a few years down the line.  either that, or the state would
have to borrow (or print, on the Freeman Plan) a lot of money to finance this,
which would not necessarily be a good thing.

the other difficulty would be with all those government employees that would
become jobless for the time that it took to get all those new businesses going.
they would provide a hefty savings in labor, but would cost dearly in lost
taxes and welfare payments.  i don't know how in depth your analysis was with
these figures, but i would be interested in finding out what this would
entail (as opposed to just running fictitious numbers through my head).

i am not saying that i think that your plan would not work.  i would, however,
like to see how you have dealt with these things.

brni
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