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no cap- why care what's spent?

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03-22-2010, 09:44 AM

Monkeydad

Living Legend

Join Date: Mar 2006

Location: PA

Age: 46

Posts: 17,460

Re: no cap- why care what's spent?

Quote:

Originally Posted by SirClintonPortis

I can think of two reasons.

1. The laborers are given a disincentive to put in the maximum amount of effort. According to the consumption-leisure model, when wages get REALLY HIGH, laborers will choose to work less and spend more time with leisure.

2. Risk of getting burned if the cap comes back

Especially #2.

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