You can't cut your way to prosperity. Any business that does that

[muntrv]

is usually about to go under.

[Pholus]

1. I saw stock prices tend to rise on layoffs though. Isn't that the general reasoning here?

[muntrv]

2. In the short term they do.

[Pholus]

4. But people don't learn from the long history of what happens next.

Too short sighted, planning for a big haul in one quarter instead of a steady living over a lifetime.

And that MBA philosophy, that you don't need to know the details to manage, is now being applied to our government.

:)

[Horse with no Name]

3. Exactly. When their business is down--they SPEND money

on advertising and marketing or hiring someone else to turn their business around.

[Zax2me]

5. Um, of course you can. Good companies do.

All successful businesses cut.
They cut under performing employees - replace with viable ones that do more with less head count.
They cut wasteful spending.
They cut over-staffed manager positions.

I'll tell you what they don't do.
They don't spend projected/potential future revenue today.

Those that do?
Usually about to go under.

[spooky3]

6. re: future revenue, haven't you ever heard of venture capitalists?

They'd have no place to put their money if businesses didn't spend potential future revenue.

Most successful businesses borrow against projected future income, or obtain investors/stockholders to get capital, at some point.

The cuts you are describing in the first pgh. are not analogous to the cuts in the debt. ceiling bill.

What successful businesses do NOT do, is refuse to consider ways of increasing their incomes, particularly when there are sales to be made and services to be provided.

And, there is a considerable diversity of effective strategies tailored to the times and places and industries in which they are operating.

See how easy it is for your analogy to fall apart?

[spooky3]

8. How Apple Would Solve Debt Crisis

http://finance.yahoo.com/banking-budgeting/article/113237/how-apple-would-solve-debt-crisis-marketwatch?mod=bb-budgeting&sec=topStories&pos=7&asset=&ccode=

"So, what would happen if Apple had to tackle the debt crisis? First, it would eliminate spending that's not working. Then it would make a commitment to spend if necessary. Third, it would look for ideas to spend on. Finally, it would call customers' bluff. How much are you willing to pay for what the government gives you?

Ultimately, what's happened to our government, lawmakers, elected officials and ourselves is that we've have taken on a mind-set of defeat. It doesn't seem to matter that the business model — taxing for revenue, spending for growth — isn't broken. After all, it's working in Germany, Canada, India and China.

We've given up on the model because of our debt situation. It's a problem, and a pressing one. A default or lower credit rating would cause further damage to our credit picture.

But there are really two ways to handle it. We could take a balanced approach of reining in spending and increasing revenue (cutting costs, raising taxes), or we could simply cut, slashing incomes (Medicare, Social Security, the military). These drastic cuts, which will balance annual budgets, are in effect a surrender."

[PDittie]

7. Businesses that cut expenses to make budget

usually do so in order for a few guys at the top to make their bonus. It's a symptom of weak and morally bankrupt management that is even worse when they're trying to make a monthly bonus instead of a quarterly one.

Newsflash: Nobody gives a shit about the future beyond their next paycheck, or their next meal, or their next orgasm. NOBODY. That's why not just our government but our planet is in the condition it's in.

That's how the poor people live their lives, and because the rich people were too greedy to share, they're going to eventually join the poor people. Mostly because the poorest of the poor are going to come for them. I'm pretty sure society as we thought we knew it even just a few years ago is all over but the crying. A few more wars, a lot more fighting and hunger and pestilence, and a few relatively well-to-do holdouts scattered around who have their resources guarded fairly well.

Where are you planning to spend the end of civilization? Might want to start thinking about it.

But hey, cheer up! Go back to playing Angry Birds or something.

[RT Atlanta]

9. THIS is the correct analysis

without a commensurate increase in revenue, you're still not bringing in new $ to pay off the old debt.

Oh yeah, throw in a few wars, one of which is in the "Graveyard of Empires" and you have recipe for disaster.

[JoePhilly]

10. Government isn't a business ... the GOP thinks its is ...

but its not.