The fundamental question: Why is inequality bad?

Perhaps inequality increases everyone's income. What do you think?

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You have income inequality if they make the same money?

What do they both deserve in your opinion?

 

No. They are not keeping it. If you take a hundred dollar bill out of your pocket and deposit it in your bank, you are loaning that hundred dollars to the bank. You no longer have the dollar and now the bank does.

 

Try this question;
If they could both be given unlimited access to goods and services of all types from land to mansions with the only proviso being that sometimes they'd have to share and that they could not but and sell these items would you think that was agreeable or would you still rather that the doctor have more?

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Um no that money is still yours. Thus you may withdraw all of it.

 

You understand that when you deposit money into the bank you are loaning them the money, right?

 

Inequality, in and of itself, has no impact on 'everyone's income'. Demand for labor increases wages, if that's what you mean.

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If money were backed by gold, then I'd agree with you. But it's not, so I don't.

 

Indeed they may use that as loaning collateral but that doesn't mean you didn't just let them hold your money.

 

Oh really. Would you advise communist Cuba to increase inequality for he benefit of all?

Interesting what is money backed by and what is that backed by?

 

Laying all the problems and definitional issues aside. That person's wealth would still be spent in the exact same simple ways I described prior in my first post to the thread identifying Reich's lies. They would spend some outright, put some in domestic banks where it would be loaned out and spent, put some in foreign banks, same and disproportionately to US benefit, put some in bonds... spent on municipal improvements, put some in listed stocks... used as leverage to fund acquisitions, P&E, R&D, Hiring... spent, put some in private placements via PE, VC and hedge funds... spent, donate some to charity... spent. Upon death, that person's estate would be reduced by at least half by the tax man. Same would happen to each of his heirs when they died.

But really, it's a childish and absurd hypothetical that leads to no useful conclusions.

 

I would advise Cuba to have a free market. This would introduce the prosperity it once had before communism took over. Inequality is natural. I would rather have the inequality of freedom than the equality of communism any day of the week.

Let me know when Americans are rafting their way to Cuba.

 

This is the inconvenient fact behind wealth inequality propaganda that the Complex LW desperately wants to conceal, other than a % of incorrigibles whom no amount of redistribution and artificial income bases will help, the poor and the rich are the exact same people, just at different points in time. Have posted this over and over, never any acknowledgement or refutation from the Complex posters here. There really is no refutation, most people start out poor, doctors in residency saddled with debt for example, earning less, then earn more over their careers. Here's Thomas Sowell describing it from about 6 minutes on.

https://www.youtube.com/watch?v=bGuNNyOTRnI

McDonalds has over 100% turnover. Entry level jobs are meant to be just that, the START. Trying to freeze at a point in time for some wealth inequality appeal is dishonest.

 

Where it is SPENT by those who receive it as loans, bond proceeds, increased stock prices, charity, the only money not spent is money buried or burned, or rather NONE.

 

Not sure about the money in Scotland, but in the US, we have a fiat currency:

"While gold- or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is defined by law as different from its market value as metal.[SUP][/SUP]"

 

It's not necessarily inequality per se, it is poverty and the struggling conditions of the laboring class. Sure, there is such a thing as the "trickle down effect", but in other ways the presence of wealth can make the poor worse off, if the individuals with money buy up all the land. In the cities where the jobs are, living space is a scarce commodity.

 

You need to learn how money and banking works, is multiplied, in fractional reserve banking.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

See especially the graph, "the expansion of $100 through fractional-reserve banking..." in the money multiplier section.

 

I would advise communist Cuba to dispense with communism, and embrace capitalism and freedom. After which, income inequality will surely appear, because, income inequality is merely a side effect of The People's freedom to choose one's own path. Some will choose a path to wealth, others will choose a path to poverty. Early guidance is key to steering young people to the correct path. In the US, almost everyone who works a full time job can retire a millionaire, if they start young, plan wisely and avoid the common pitfalls.

 

Ah yes, Thomas Sowell. I in fact got it from his "Basic Economics". I've read his "A conflict of Visions" and "Intellectuals and Society" too. Have you read them? I recommend them all, as well as all his other books. Sowell is simply brilliant.

 

Everyone can retire a millionaire?

I take it this that you are a at least a millionaire and likely a multi millionaire?

Fascinating. Do tell. I take it a domestic cleaner can achieve this too as long as they forgo some things. What would those be?

 

Um no I don't actually.

That money you give to your bank remains legally yours. Its a fact you seem to want to miss out.

 

Are you concluding that our wealth is unrelated to the resources existing on the earth?

 

Nope. Per this article on deposit accounts the depositor surrenders legal title to the deposited money.

For example, a depositor opening a checking account at a bank in the United States with $100 in cash surrenders legal title to the $100 in cash, which becomes an asset of the bank. On the bank's books, the bank debits its currency and coin on hand account for the $100 in cash, and credits a liability account (called a demand deposit account, checking account, etc.) for an equal amount. (See double-entry bookkeeping system.)

 

I'm concluding that demand in the marketplace is unrelated to "income inequality". Unless and until someone can show that the rich having "a larger slice" means that the size of my "slice" is limited in some way.

 

I don't see what part of "it doesn't matter who the depositor who owns the deposit is, all that is necessary for the money to be spent is that it be loaned out to someone who spends it" isn't sinking in with you. People don't borrow money and then bury it in the back yard. They buy cars, houses and other things with it. Banks loan out money right up to the limits of their reserve requirements, so that there are vast pools of Richie Rich's money sitting around not in the economy is a myth by definition of how banks work and how money is multiplied through the banking system.

 

Obviously, too much inequlity is bad, because eventually the rich guy won't have enough customers to make him rich, Henry Ford would tell you that if he was alive.

 

This is quite OT for this thread (apologies to the OP), but:

I am not a millionaire... yet. It took a long time for me to come to the realization that funding retirement should be a priority. But had I known when I was a teenager what I know now, I absolutely would already be. I spent my early life doing things I should not have, living beyond my means, buying depreciating stuff on credit, partying instead of working/learning, etc. I, like so many others, torpedoed my own yacht.

Time is key. If you wait until you're 30, it becomes much more difficult.

1) Earn every penny you possibly can, via whatever methods you can muster.
2) Save and invest (wisely) every penny you possibly can.
3) Understand 'wants' vs 'needs'. (A car is often a "need", whereas 24" chrome rims for that car are a "want")
4) And you will most likely retire wealthy.

You can become a millionaire by investing a monthly amount like an automobile loan payment, if you start early enough in life. During the 20th century, the US stock market returned an average of 10.4% per year. That's through umpteen recessions AND the great depression.

If we assume a conservative 7.5% growth rate over the next 50 years, and you contribute $200/mo to your savings over that time period, you will retire with $1,244,927.26. So, for the monthly cost of a (cheap) car payment, you're a millionaire. It takes the knowledge and discipline to do it. And, it takes a lot of work.... a LOT of hard work. More work and more discipline than most people are willing to exert, sadly.

 

I have already shown you this with my example of the earth being the “pie”. Landowner income, which comes in the form of economic rent, is not earned by expanding production. This rent income gives the landowner a share of production without him adding to production. He gets consumer goods but does not produce consumer goods … so where does his purchasing power come from? It can only come from lowering the purchasing power of actual producers. Rich landowners can only get their income through the process of making actual producers poorer. Adam Smith pointed this out over two hundred years ago in 'The Wealth of Nations' … I don't know how you could have missed it.

Suppose that I am young, just starting out (I own no land), and i work at McDonald's on the west side of town. I pay income taxes and sales taxes. The government uses that revenue to make major improvements to the roadway on the east side of town. I am poorer because I have to fund this infrastructure. The landowners on the east side of town are suddenly much richer, and receive more rent then they did before, because of the government spending. My slice of the pie has been reduced, while the rich landowners on the east side of town enjoy a larger slice, at my expense.

I hope I never hear this stupid argument from you again.