Would this help the economy?

[ThatJagoGuy]

During a post-surf piss-up yesterday, someone proposed that a three-day weekend might in fact aid the economy. My justification for this was that companies, despite having lower productivity, would have less to spend on wages. Furthermore, since spending among working classes [let's not get into a class debate over my choice of phrase] correlates higher with free-time rather than actual earning, an extra day off would encourage the casual spending that is required of the public in order to rejuvinate the economy and break the downward spiral.
Furthermore, who wouldn't appreciate a three day weekend?!

In the sober(ish) light of day, I still can't think why this isn't at least slightly plausible.

Any input or economy-saving proposals of your own?? Having shot holes in many economy-boost proposals on various forums, I'm anticipating a fair amount of derision. Sorrow-drowning whiskey at the ready.

 

[Cpt_Oblivious]

It wouldn't. Because you're earning a day's less money, but spending a day more.

So everyone would be broke after a while then become even more cautious with their money leading to even less casual spending.

 

[KSarty]

During a post-surf piss-up yesterday, someone proposed that a three-day weekend might in fact aid the economy. My justification for this was that companies, despite having lower productivity, would have less to spend on wages. Furthermore, since spending among working classes [let's not get into a class debate over my choice of phrase] correlates higher with free-time rather than actual earning, an extra day off would encourage the casual spending that is required of the public in order to rejuvinate the economy and break the downward spiral.
Furthermore, who wouldn't appreciate a three day weekend?!

In the sober(ish) light of day, I still can't think why this isn't at least slightly plausible.

Any input or economy-saving proposals of your own?? Having shot holes in many economy-boost proposals on various forums, I'm anticipating a fair amount of derision. Sorrow-drowning whiskey at the ready.

Wages would most likely be the same. A lot of companies already use a 4-day work week system, but the employees work 10 hours a day instead of 8.

 

[Soxafloppin]

Good for businesses maybe, not good for workers.

 

[littlelacysurprisepageant]

It wouldn't. Because you're earning a day's less money, but spending a day more.

So everyone would be broke after a while then become even more cautious with their money leading to even less casual spending.

This.

Everyone seems to be heading towards debt minimisation. I doubt they will spend on their day off, with less income.

 

[goatzilla8463]

Help the economy eh???

Well, the answer is to wage war.

War makes money.

 

[Timotei]

War makes money.

For as much of a peace-preaching pacifist as I am, I couldn't agree with you more.

It's a sad truth.

 

[ThatJagoGuy]

I think more countries should have siestas.

Ah, that'd be nice! I'd find the prospect of a 5-day week much appealing if I was allowed to have a kip!!

 

[TheMatt]

Help the economy eh???

Well, the answer is to wage war.

War makes money.

Do you hold stock at Fanta, perhaps? You nazi orange drink drinking sob!

Seriously though, I agree with you completely.

 

[ThatJagoGuy]

Help the economy eh???

Well, the answer is to wage war.

War makes money.

Do you hold stock at Fanta, perhaps? You nazi orange drink drinking sob!

Seriously though, I agree with you completely.

Okay, this is probably a pretty dumb question, but why does war make money?! I never quite understood where the wealth came from... unless there are clearly won spoils.

Oh, and the closest Fanta have actually come to being Nazis was when they took all the awesome chemicals out of the drinks and then spent loads of money on propaganda, lying about how it was a 'better taste'. Bastards! The other nazi stuff is just a myth, sadly.

 

[LaughingTarget]

It depends, if it was a forced law, it would have a devastating effect on an economy. It is apparent when you look at European nations with those ridiculous vacation times. Their economic growth has been stagnant for over a decade (a good year in France, for example, is a 0.8% GDP growth) and the productivity is abysmal.

To be able to take time off, you first need to produce enough to cover what you're using for those days. If you want to take three days off, you need to get 7 days worth of work done in 4.

If a company chooses to engage in a three day weekend to attract employees, this would be a temporary boom for that company. They'd attract all the highly qualified employees in the geographic region and outperform the competition. It would, however, be a temporary boost as the company would later fail attempting to outproduce the 5 day a week companies on the market. Picking up the pace would work temporarily, but even highly competent workers would have a hard time maintaining a 20% higher productivity rate.

The best way to help the economy is plain as day, but politically unpopular. The top four biggest drags on an economy and top four causes of a depression are, in order:

1. Regulations
2. Taxation
3. Welfare spending (health, retirement, unemployment)
4. Currency inflation

To get an economy back on track, regulations need to be eliminated down to a level that only punishes fraud after it happens, taxes are drastically slashed, welfare spending is eliminated (doubles the problem of excessive spending and building incentives to not work) and we stop pretending that pieces of paper that come off a printing press have value (basically, fine the United Kingdom $10 trillion for letting John Maynard Keynes live).

Obviously, this stuff is unpopular, but it's the only real solution. Every "recovery" will be illusory and just lead to bigger and bigger failures until we get a clue and realize that the above 4 will never work, no matter how smart or competent the people in power may be.

 

[historybuff]

It wouldn't. Because you're earning a day's less money, but spending a day more.

So everyone would be broke after a while then become even more cautious with their money leading to even less casual spending.

Pretty much this.

 

[Zac_Dai]

I don't know about the economy but I bet cases of work related stress would go down and latchkey kids would be happier.

 

[Danny Ocean]

Help the economy eh???

Well, the answer is to wage war.

War makes money.

Do you hold stock at Fanta, perhaps? You nazi orange drink drinking sob!

Seriously though, I agree with you completely.

Okay, this is probably a pretty dumb question, but why does war make money?! I never quite understood where the wealth came from... unless there are clearly won spoils.

When a big war is on, several things happen:

1. The working population is more likely to put up and shut up when it comes to the actions of their employers, so they can pay less/demand more time.

2. The arms industry kicks up a gear.

3. The Oil industry really kicks up a gear, think what all of those tanks are running on!

4. A whole feckload of your population dies.

5. Won spoils, as you say.

6. Some other stuff, I've not really thought about this before, this is just off the top of my head.

I don't know about the economy but I bet cases of work related stress would go down and latchkey kids would be happier.

Sure, but who the hell cares about that, right?

 

[NeutralDrow]

Help the economy eh???

Well, the answer is to wage war.

War makes money.

Do you hold stock at Fanta, perhaps? You nazi orange drink drinking sob!

Seriously though, I agree with you completely.

Okay, this is probably a pretty dumb question, but why does war make money?! I never quite understood where the wealth came from... unless there are clearly won spoils.

I'm fairly sure "spoils of war" are illegal these days. Even if they aren't, reparation for the aggressor country would be...frowned upon, to say the least.

And war would basically make money in one way: the government would spend an asston of money. With the twist that few would mind it as much.

Oh, and the closest Fanta have actually come to being Nazis was when they took all the awesome chemicals out of the drinks and then spent loads of money on propaganda, lying about how it was a 'better taste'. Bastards! The other nazi stuff is just a myth, sadly.

By propaganda do you mean the horrifically annoying commercials?

And I partly agree. The only good Fanta is made in Japan. I miss apple flavor...

 

[LaughingTarget]

When a big war is on, several things happen:

1. The working population is more likely to put up and shut up when it comes to the actions of their employers, so they can pay less/demand more time.

2. The arms industry kicks up a gear.

3. The Oil industry really kicks up a gear, think what all of those tanks are running on!

4. A whole feckload of your population dies.

5. Won spoils, as you say.

6. Some other stuff, I've not really thought about this before, this is just off the top of my head.

This is a great time to introduce this wonderful concept:

http://mises.org:88/OneLesson_2

For those who don't want to bother watching the video, this is called the broken windows fallacy, created by, of all people, a French economist by the name of Claude Frédéric Bastiat.

The basic story is that if a child were to break the window of the baker, he would have to hire the glassier to replace the window. He would pay the glassier, who would then buy shoes, clothing and other things. The act of breaking the window created the spending of the glassier, thus it appears the economy has been boosted. However, we fail to take into account what the baker would be doing with that money if the window wasn't broken in the first place and the town's economy really wasn't stimulated, it's just poorer by one window.

War is the same fallacy on a grander scale. All war does is break stuff. Sure, people are put to "work", but they aren't making anything, they're destroying things. Then they can be put to "work" rebuilding after everything was destroyed, but in reality, all they're doing is putting everything back in order from before everything was trashed. The world is instead poorer by the value of every destroyed building, bridge and by every round of ammunition shot, every bomb dropped and ever life lost. The "stimulus" is an illusion, it doesn't really exist. After all that time and manpower was wasted since it didn't accomplish anything but putting everything back in the original state. Work is pointless if it doesn't expand wealth, something you can't do if all you're doing is repairing what you just broke.

I can easily put 100% of the people on the planet to work. Half of them will dig holes, the other half will fill them in again. They're working, but nothing is getting done. Nothing of value is being built, and the people are worse off because of it.

 

[Pendragon9]

The problem is that poor people are getting poorer and rich people are getting richer. While poor people pile up by thousands, rich people store and hide their cash away, refusing to spend it on even the smallest necessity.

I would say force the rich people to spend their money, but again some people find this "wrong".

So we're pretty much screwed.

 

[LaughingTarget]

The problem is that poor people are getting poorer and rich people are getting richer. While poor people pile up by thousands, rich people store and hide their cash away, refusing to spend it on even the smallest necessity.

I would say force the rich people to spend their money, but again some people find this "wrong".

So we're pretty much screwed.

Want to know what's funny? The more "progressive" a tax system gets, the poorer the poor get and the richer the rich get. It's an accounting phenomenon of after-tax returns. Simple math example:

A businessman builds a widget for $90 and sells it for $100. He is taxed at 30% for $3 and keeps $7.00. He wants this 7% after-tax return on revenue.

Now, let's assume the taxes are raised on this evil rich person to 40%. He wants to maintain a 7% return on revenue. It still costs $90 to make the widget, but now he has to sell it for $101.87. He is taxed at the higher rate of 40% and pays $4.74 in tax instead of the $3 he paid before. He now makes $7.12 after tax. By hiking the tax rate, the rich person just made an additional $0.12 profit on each widget he sells.

 

[Alarid]

What does the effect of extra vacation time in other countries have on their economy? I know some European countries have much longer vacation periods than most American companies. I would see a similarity in free time to having an extra day a week off.

You would think it would slow down production, but it actually increases productivity for their workers, since they have an adequate amount of time to rejuvinate for the 4 days they work, and it frees more days to schedule for more employees.

 

[ThatJagoGuy]

The only good Fanta is made in Japan. I miss apple flavor...

I found some of the original, awesome E-number filled Fanta in France. Mmmmmm, hyperactivity!

What does the effect of extra vacation time in other countries have on their economy? I know some European countries have much longer vacation periods than most American companies. I would see a similarity in free time to having an extra day a week off.

You would think it would slow down production, but it actually increases productivity for their workers, since they have an adequate amount of time to rejuvinate for the 4 days they work, and it frees more days to schedule for more employees.

That sounds logical - I get pretty fed up in a five-day week but I imagine I'd be more focussed on my work if it were only for 4 days at a time.