On Wed, 02 Apr 2008 14:53:44 -0400, "Max B. Sawicky" <sawicky at verizon.net> wrote:
> If the wage with no EITC is X and the wage after it is X - a + EITC,
> how big do you think 'a' is, and why? According to Doug, a = EITC.
I'm not so good at this math stuff, and I have no idea what "EITC" is, (though I suppose TC stands for "Tax Credit"), but let's see how it goes.
If wage is X and cost of living is C (including location and other rents, naturally) and X goes up, by say XTC, what happens to C?
Now let me know if this is crazy, but more money chasing the same goods and locations means, it seems, higher prices? (especially higher rents).
How much up? Well if the amount of extra money competing for the same goods and locations is XTC, what's to stop landlords and there fellow rentiers from raising prices to absorb XTC?
Therefor, yes if "a" in your formula is the value of higher prices (especially rents), then it will indeed equal any TC.
And if the ability to accumulate wealth and form capital is !"$%&* and therefor !"$%&* = X - C, and if a rise in X means a rise in C, then how does a tax credit or anyother factor of nominal wage effectively cause a real change in !"$%&*?
Sorry if my math is wanting for not having consulted Capital v.III
"It is sometimes said it would illogical for labour to resist
a reduction of money-wages but not to resist a reduction of
real wages [...] experience shows that this is how labour
in fact behaves"
-- John Maynard Keynes,
The General Theory of Employment, Interest, and Money
-- Dmytri Kleiner editing text files since 1981
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