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Global SAD v1 has been baked and failed.
SAD v2 is based on the concept of zero startup cost and zero profit (+/- 1%). If someone has an idea for a business, the government comes up with the startup costs paid by taxes. The business can get more investment if the demand is still strong i.e. a 1% profit,
but doesn't get any otherwise (sliding scale down to -1% profit).
Otherwise the game is the same, pay people, pay corporate and personal tax. The government then funds all the investments and takes any profit. Well it's either that or digging the great big US trench.
In some way the idea could be phased in by working back from a +/- 100% scenario, possibly with employment prospects being factored into the investment amounts.
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Like the sentement of this idea. The trouble is we have a govement (in the UK) that cannot be trusted to sort out their own personnal finances so I don't think many would trust them to run everything (which is what they try to do now, and look at the mess). |
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Could you elaborate? - If i have the 'idea' of selling bright-pink computers, the governement pays for the first ten computers + paint, plus painter for 20.000$ ; I then sell the computers for 30.000 $ (or am i only allowed to sell for 20.200$ ?) - then i pay taxes and get to keep 1% of ... 10.000? 20.000? 30.000? |
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//get to keep 1% of ... 10.000? 20.000? 30.000// |
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You get $100 profit, plus as an individual you get paid whatever your salary is in the company. You could pay yourself anything, but there would also be another company waiting to cut your margins. |
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There are obviously a few holes in the idea, like exactly how much 'free' investment you can have, and continue to have. |
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The basis of the idea though is that you can start from scratch and compete with a mega cooperate on equal terms. |
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Ok, $100 and a free mint. |
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So... bring down all barriers to entry with government funds. Sounds...halfbaked []. |
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If the government takes all the profit, then where's the incentive to come up with good ideas? |
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Bigsleep, do you have an idea you want the government to help you start? |
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//where's the incentive to come up with good ideas?// |
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Its the nature of things. Only businessmen are in the profession of making money, the rest do what they do. |
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I have quite a few ideas, most of them go in the bin as employers go down, or crazy employers embark on 'strategies' rather than a business plan that enables an idea to come to fruition. |
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Doesn't this kind of scenario basically replace investors with the government? |
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Basically the business would be publicly owned rather than privately, and many businesses allowed to grow beyond their capabilities too quickly, and others left without the funds they need ? |
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//Basically the business would be publicly owned rather than privately// |
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Its difficult to say as the idea renders ownership meaningless. It's not so much nationalised business, as nationalised investment and profit. |
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//many businesses allowed to grow beyond their capabilities too quickly// |
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The idea gets a bit sketchy there, but I did mention earlier the rate of investment is linked to the business track record and the employment opportunities e.g. if you took on more staff, this would justify better investment the following year. |
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Honestly, who needs a profit if expansion is both monitored and sponsored by an external agency ? Sure business angels and the like provide a kind of middle ground, but go that route and the company gets sucked into the whole making money / bubble like economics. |
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I'm a little confused by the +/-1% +/-100% side of it. Are you saying the company gets to keep 1% of it's net profit? |
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If this is the case, wouldn't the managers be able to simply rack up the wages to plough the profits into the staff rather than letting the government have it? |
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If the managers overdo it and end up making a loss, do they need to get more 'investment' from the government in order to keep running? If the company goes bust, do the government then have to sell off the assets and pay the debtors? |
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//Are you saying the company gets to keep 1% of it's net profit?// Yes. Who needs profit ? |
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//If this is the case, wouldn't the managers be able to simply rack up the wages to plough the profits into the staff rather than letting the government have it?// Absolutely, but bear in mind there would be competition and the lack of profits affects future investment. |
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//If the company goes bust, do the government then have to sell off the assets and pay the debtors?// Yes. The company would be forced to downsize so that e.g. another company could make better use of the assets e.g. physical factory. |
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[-] Government can never pick as good as individuals. |
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That is by definition, not just an idea. Individuals know what they want, and government has to ask them. |
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Of course, if it was done, I'd be first in line to start multiple businesses with tax payer capital, and use my family as the 'employees'. |
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//Government can never pick as good as individuals// |
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It's very naiive to think you have free will in those terms. I would immediately cede my votes in some areas to people who know what they are talking about. |
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//I'd be first in line to start multiple businesses with tax payer capital, and use my family as the 'employees'// |
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The businesses still need to make a profit and destroying your relatives' business reputations to make some quick cash is a one time deal. |
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Problems: Lack of personal motivation to grow, maintain, or prevent loss to profit margin beyond 1%, government ineptitude in all matters financial, additional overhead required to police & maintain a system suceptible to corruption. |
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Benefits: Lowers barriers to entry. |
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So basically it's Big Business: Now with more government-sponsored incompetence! No carrot, no stick, a thick new layer of red tape and beaurocracy, and anyone can do it. |
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Unless I'm missing a big upside, this idea sleeps with the fishes. [-] |
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//Lack of personal motivation to grow, maintain, or prevent loss to profit margin beyond 1%// |
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There's plenty in the idea. You would in effect, eventually lose your business if not maintaining a profit. The government incompetence could be mitigated by subcontracting the business overseeing, and having an overview committee kind of an OfOfInvestment (in UK speak). |
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The Big Business criticism is a valid one and another vague area of the idea. But just like business today various loopholes need to be closed. |
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Low barriers to entry was not the primary focus of the idea, but obviously it would be much easier to start a business. The main point was to drive business out of business. As I said earlier "Only businessmen are in the profession of making money, the rest do what they do". |
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I rate pure businessmen on a lesser level than people who want to build the tallest building etc. At least there is a point to building high rather than making the biggest pile of cash that can possibly be imagined (as the host country digs deeper into debt). |
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Not bad. This would be a long time overcoming corporate resistance, but if the general concept were instantiated as part of the ongoing 'bailing' of businesses or as part and parcel of government created jobs programs I can see where enterprise or start ups may see this as a low-cost, minimal risk source of funding capital. |
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Subscribers wouldn't be looking to set the world on fire with their first steps, but an incentive to outperform exists and the rewards (albiet delayed or muted) also exist but as with ownership or bonded capital rather than as with derivative or equity capital. |
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