GOP-Tea Economic "Solutions" - Wage indexing (and back door wage cutting)

NEW RULE OF ECONOMICS: WAGES WILL FALL AS HEALTH COSTS RISE

First, it's just stupid to ask employees to "contribute" to their healthcare premiums, apart from, say a co-pay. Why pay people, just to take it back in the form of a "contribution"?

What's really going on?

Well, the GOP-Tea appear to have thrown in the towel on any prospect of health cost containment, because, the effect of their proposal is to say that wages will fall as health costs rise, so that budgets don't get out of balance (and the richest won't be asked to pay new taxes to re-balance).

The current danger? Adding union-wage "brinkmanship" to the equation:

Milton Friedman's teacher Jacob Viner always argued that it was "unbalanced deflation" -- i.e., declines in asset prices and wages and incomes while debts remained the same -- that was the cause of the Great Depression. So did monetarist school founder Irving Fisher.

Ask yourself: if everybody's salary in America were to be cut right now by 25 percent -- but everyone's mortgage payment, everyone's credit card balance and interest payment, and every corporation's debt interest payments remained the same--would we see a recovery or another chain of financial bankruptcies that would push the economy down further?

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