Why The Economy Went South

I am not so naive as to think any one factor is responsible for the economy being weakened. But I can say with certainty just exactly what the pivot point was - the one thing that started the pendulum swinging the other way. Are you ready? The increased minimum wage, courtesy of the only thing the Democrat Congress is solely responsible for.

How can that be? After all, aren't low income people getting more money to spend? Wouldn't that juice up the economy?

On the surface (which is the only way Democrats ever see anything), that would appear logical. But conservatives are a bit wiser and smarter - they tend to look below the surface.

Let's get one thing straight - every time we increase the minimum wage, we do great harm to the economy. Period. If you do not believe that, consider what really happens when the minimum wage is increased.

Let's start with where those extra funds for wages will come from. I certainly hope you are bright enough to realize the employer is not going to take it out of his own pocket. If he did, there would be no gain to the economy because for every dollar extra that low income workers now have to spend, the employer has one less to spend, so it would be a wash. More to the point, the employer is not going to jeopardize his own security by paying that money out of his own pocket, even if he could afford to. That leaves only one place where the money can come from - the employer must increase the prices of his products and services. In short - you, me and the low income person will have to pay more for our goods and services.

About the extra dollar per hour...

It does not benefit the low income family at all. Not one iota. Why? Because for every dollar extra that he gets paid, he must now pay an extra dollar for the higher priced goods and services, because the prices of products and services had to increase in order to pay the minimum wage.

But it gets worse. Now a spiral has been set in motion. With rising prices (caused by an increase in minimum wage), all other income earners are now suffering a loss. Their income did not go up, but the cost of living has gone up. In order to avoid losing ground, every other employee across the country must request a raise in pay, to cover the cost of living increase. And once again, where do you think all that raise money is going to come from? You guessed it - another increase in prices of products and services.

With this second round of price increases, the low income person is now spending more in higher prices than he is getting in increased wages, resulting in a net loss, causing more poverty.

Common sense and logic indicates that forced wage increases result in damage to the economy, higher prices, inflation, recession and more poverty - exactly the opposite effect that was desired.

And that is why conservatives oppose minimum wage increases.

And that is the precise moment that the economic pendulum began to swing the other way.

And that is why I can say with certainty that the economic momentum was stopped by the Democrats - again!