Don't know what changing the wages of employees would have to do with increasing demand for the company's product
More money available allows one to buy more things. My wifes spending patterns are more than enough evidence of that truism.
Constant wage, but falling prices, allow a greater amount of product to be purchased, demand rising with availability of funds to increase standard of living.
Increasing wages and falling prices provide for an even greater market expansion.
or how a choice of increasing wages vs decreasing prices is relevant to anything I have said.
The response was to Your Nightmare, in regards to tax incidence commentary to you. It is my practice to address both persons engaged with a specific comment to which I frame a reply. For all except the first in the "To: field, its is a mere notice, not reply.
Changing the wages of Company A does not create greater demand for A's product.
This is one point we differ I do not see adding 30% on to the price of the products through the FT LOWERING prices just the opposite.
While I would love to believe that wages are going to rise and prices fall I can't fit it into any economic model with which I am familiar. This scenario is never going to be acceptable to the Class Warriors since it would mean excess profits as the companies would be gaining the SS taxes generally paid for workers at first cut. Capacity utilization rates will be crucial in determining the direction the economy would go. Given an unemployment rate as low as it is should profit increases stimulate more hiring inflationary pressures will be greatly increased. I can't see taking such a step as FT without great cautions being exercised the wrong step could be disastrous.