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"You might think that I am off base, but I am published by the Securities and Exchange Commission."

Thomas Paul Murphy

Monday, July 15, 2013

Flawed Economic Logic in the United States 07 15 2013 Update #2

Flawed Economic Logic in the United States 07 15 2013

Businesses were originally granted the limited liability in corporate status because they created a product that benefited the public and also they created employment.  Whether it is implied that they created employment or that they actually created employment as a corporate status is irrelevant.  The impetus is that they were granted limited liability because they would create employment and create employment in the United States.  That is indeed part of creating a product that benefits the public; that they public of the United States are employed in manufacturing it

The fact is that they moved employment out of the United States.  So is it still valid that they should be allowed to have limited liability?  When someone violates conditions of an agreement or contract they have nulled and voided that contract?

What am I getting at?

Why should the interest rate the American Consumer pays be higher than that for a United States Corporation that uses foreign employment?  In effect the American Consumer is financing the low labor rates in other countries because the Corporation does not have to pay as much money on the interest on its debt as the American Consumer, the heart of America, does on his debt.

It takes very little increase in the balance on a consumers credit card before the monthly interest on that credit card is as much as the price of one typical item that he buys!!! In effect for every $40 dollar item an American Consumer buys every  month he also buys one for the Bank!

It doesn't make any sense.  The way to change it is to limit the interest rate on consumer credit cards to less than one percent while at the same time determining that such and such consumer can not spend frivolously past his means.  And how many consumers really live within their true means?  And do rich people actually live within their true means if they did not have the bank balance that they do?  No they don't!

In conclusion the high interest rate on the consumer credit versus Corporate Credit finances low rate employment in foreign countries by United States Corporations.

Some type of crucial action has to be done concerning this.

I have a bachelors degree in Business Administration from the University of Milwaukee Wisconsin with a double major in Accounting and Finance.  Graduated in 1991 and passed the CPA exam that same year.  So my concepts are not flights of fantasy.

Copyright 2013 Thomas Paul Murphy
Originally published on 07 15 2013 at: www.themilwaukeeandwisconsinnews.blogspot.com

You crack up the family car and maybe you don't get the keys again.  And maybe you don't get to drive that car ever again because you ruined it?  Can you fix that family car yourself?

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