November 21, 2011

A CEO's Decision!

If you were the CEO of a large, very profitable, cash plush, corporation employing thousands of workers, which of the two scenarios below would encourage you to hire more employees.

Scenario one: Congress enacts a new bill lowering your personal and corporate income taxes

Scenario two: Congress enacts a bill to spend money to repair the nations infrastructure and education. Under this scenario your advisers believe that the demand for the products you produce will increase and therefore, so should your sales and profits.

Remember, when making your choice, the question is which alternative is most likely to cause you to add to the number of workers you employ.

Scenario one represents what the Republicans are advocating and scenerio two represents the plan favored by most Democrats.

3 comments:

  1. Too restrictive of a question without enough details. There's no real discussion to be had with what's laid out here.

    It depends on the industry, but why would I want to hire Americans when I have unrestricted access to Indonesians, Egyptian, etc workers at a fraction of the cost? So improving US infrastructure will have far less of an effect until that problem is resolved.

    Also, if I'm a CEO, I'm not looking for the scenario that would cause me to hire new workers years from now. I want my corporation's numbers to look as good as possible next few quarters. Scenario one does that.

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  2. Valid points! However, the answer to the question is the stimulus creates more jobs. Lowering taxes does not do that. It may increase the net worth of company and CEO, but it does nothing for jobs.

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  3. Well sir, the question is, what would you do? And I think you know the answer.

    Any rational CEO would pick #2. Sure, lowering taxes is always welcome, but it does virtually nothing to incentivize hiring more employees. Let's face it, new employees without (the prospect of) new customers is just wasted money. That's why many firms are sitting on piles of cash at the moment.

    And that, sir, is (one of the reasons) why the Republican party of today is hopelessly wrong. And in your heart of hearts you know it!

    (by BruceS - I tried logging in with Google but it didn't work)

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