The fundamental question: Why is inequality bad?

.....and I will help you

 

you already are; thank you.

 

Please don't feed the trolls. It only encourages them.

 

No problem.

 

I. I am not here to insult or fight or " win" an argument. I am here only to participate in civil, rational debate in order to learn and see different points of view much as Edward R. Murrow wished for.

II. When I was growing up, I was bullied, probably more so at home than at school. You see, I grew up on a farm and from a young age I wanted to have my own like vestock. I took jobs off the farm to earn money to buy my own cows and the feed. I did this several times because when it was time to sell the cows my dad would pocket all of my - literally MY money. I just thought it was because I had dine something wrong and hadn't made any money, turns out my dad was robbing me blind. So I know what it's like to work and work and work and do everything right and still, because of circumstances beyond one's, not be "successful."

I carried that with me into adulthood and for about the last fifteen years, and especially since the start of the great recession, I have seen more and more people struggle ever harder for the so-called American Dream, in a country where the biggest factor determining a person's economic status is who there parents were. I was always told that in America if you worked hard you would succeed, and yet a study conducted by Allan Krieger shows the odds of a child bon at the bottom 10% of earners has the same chance of making it to the top 10% of earners as a father who is 5' 6" having a son who is 6' 1". It happens, but not very often. That bothers me and I want to know why.

Essentially, from what I understand, there are two theories when it comes to our particular brand of capitalism. The first deals mainly with the supply side of the econseec equation and states that businesses must have am environment conducive to doing business (I.e. low taxes and little regulation) in order to encourage investment and create jobs. I can see that, and it is true to the point that there is sufficient demand. Which leads me to the second economic theory which states that consumers,with steady, good paying jobs drive the economy by creating a demand which cause businesses to expand an hire more people. It has been said that when a great amount of wealth is pooled at the top, this hinders the process.

Some argue that wealth inequality is not a problem because the wealthy still invest in bonds and businesses which create jobs. However, 70% of the economy is based on the purchase of consumer goods. The wealthiest ten percent of the people have 50% of the income and yet only account for about 40% of the spending. That's not enough to prop up our consumer based economy. But wait, the rich still invest in businesses...but what incentive do they have to invest if there is no demand for the product? The best way to answer this question is to compare the investing habits of people at various levels of median wages and purchasing power of the various economic classes. It would also be interesting to see what had the bigger multiplier effect and under which conditions. Being able to study this information we would be able to see which economic policies to pursue for our current conditions.

 

I will never support rigging the finish line. However, being against that doesn't mean one must be blind to the rigging of the starting line.

When we started this country we had to make money king, as we were done with royalty, and we had no other way to judge a man's worth who was a stranger. Back then money was a direct result of hard work and intelligence, and a man's wealth was tied to the success of the nation, meaning he had every incentive to do the best job he could for the rest of us.

None of these things are true anymore when it comes to who we let lead the nation.

A rich American can get richer while the nation sinks as a whole.

The establish atmosphere allows wealth to protect itself via the state, while curbing competition.

Free trade with developing nations has stripped the common man of his worth as a laborer, while all benefits of fiat currency have evaporated into thin air, making the wealth he does accumulate forever not enough.

Our only options are supply side economics(globalism) or demand-side statism, when the only thing that can bring back our way of live is demand side free market economics (Nationalist capitalism like western nations used to practice before the infiltration of traitors and their pipe dream).

Nothing funnier than watching college kids complain about not having any jobs when they graduate and at the same time blowing off a nationalist because they were programmed to support things like free trade and central planning of private bankers. People in debt for their own destruction.

Basically, everything IS rigged. Not just the market, but also the ideas we can choose from to fix it.

 

A nice and reasonable post.

I , too, can see the argument that money invested by the wealthy finds its way back into the economy. It does, to some extent. However, the money velocity is still lower than it has been in 50 years. That probably means a lot of the money invested by the top few % is not circulated and rather sits on the sidelines, be it in banks that do not loan money to many consumers due to higher loaning standards, or money being in offshore accounts.

Unless the money velocity comes up again, no real economic recovery will take place.

 

You make an excellent point. A good follow up to this would be a comparison of median wages, who accounts for what amount of spending (the various economic classes), money velocity and various economic indicators that measure the "health" of the economy.

 

I would imagine very few, if any who are concerned with wealth inequality would agree a plumber should be paid as much as a doctor.

 

It would be nice if we could convince the right to stop appealing to ignorance of our own laws in favor of a "work or die" ethic from the Iron Age when we could be solving simple poverty, at the rock bottom cost of a form of minimum wage, by correcting for a Natural Rate of Unemployment, on an at-will basis in any at-will employment State, through unemployment compensation that clears our poverty guidelines.

True investments in the general welfare should require a positive multiplier effect.

 

Banks don't even need money to loan. A loan can be made regardless of whether there is a balance to back it up. The bank issues the loan and then it's required to borrow from another bank to make up its reserves. Here the thing, if I go take out a 10k loan for a car, the day that I pay for it it's going right into the dealerships account, since banks can borrow between each other, the money basically was created out of thin air.

 

I don't mind engaging in politics for free, merely to harass the right; ostensibly in the name of equality.

 

Once again, to settle this discussion:

Quote Originally Posted by theferret View Post
It never ceases to amaze me how people who are NOT rich continually exposes myopic and convoluted clap trap to defend the very people who, if you're not serving them in some capacity, wouldn't wipe their feet on you.

Let's cut all the BS by wanna-be economists and the like....it's quite simple: In a community of people who SHARE COMMON RESOURCES/SERVICES within the context of competition for limited resources and opportunities, you cannot sustain a concentration of wealth for a very small percentage without eventually creating and perpetuating a level of indentured servitude/economic apartheid.

There are far too many examples of towns and cities in the USA who demonstrate this. Eventually, the folk who cannot enjoy any of the luxuries they help create and maintain without being in a constant state of fear of impending financial doom will rebel...or they get fed up with living in poor conditions that designate shoddy materials & food just because they are poor. So rather than go through this, just eliminate by law the various ways in which the concentrated wealthy manipulate the system to maintain their (mostly unnecessary) dominance. I'm not talking about "soak the rich", I'm talking about truly giving the poor, working and middle class a shot at the "American dream". As the famous line from the movie, "Wall St." goes, "How many yachts can you ski behind?"

 

Your assumption is that banks actually use the deposits and lend them out again at the multiplier rate to people who spend the money.

Since the GR, they have not:



Banks are sitting on trillions of dollars that are not being lent out.

At the very time our economy need spending the most, trillions of dollars that would be spent if the money was either going to the middle class or the government are instead sitting in the bank accounts of the wealth. And that doesn't even count the tens of trillions sitting in offshore accounts.

 

The rich don't keep piles of $100 bills in their mattresses. They loan or spend these bills, handing them to other people to loan or spend who, in turn, hand them over to other people loan or spend.

 

So let me guess, your solution is just take it from them and give it to everyone else to spend. So, how much of your money are you ready to give up? I'm sure there is someone with less than you that could use it. And, don't be silly to think you get to decide who gets it or how they use it.

 

The ultimate goal of those who gripe about inequality is to forcibly take the property of others. Regardless of all their graphs and handwaving, they essentially want to forcibly take the lawful property of their fellow man. Very uncivilized, in my opinion.

 

And, breaking a Commandment.

 

Well, yeah. That too.

There's a whole crap-ton ethically wrong with the idea of taking the property of others in order to use it for your own purposes. Apparently, many of these folks were never taught that the ends don't justify the means.

 

Then maybe you can explain why the money velocity is at a 50 year low?



Someone is not spending the money. And it is not the bottom 50%, who spend all they make, and even more while going into debt.

 

You can not fix "income inequality". It will always exist as individuals are paid a wage based on their education, experience, skill. And, individuals salary is also based on supply and demand. Number of individuals able to perform the job and the number of jobs available. Wages are based on the employees contribution to the overall success of the business. So, jobs that require little or no education, experience or skill while important to the businesses success employee individuals that are easily replaceable while jobs require a college education and our X years of experience or a learned skill are more valuable and warrant a higher wage. That is just the way it is.

In previous years, there were plentiful manufacturing jobs that paid higher wages and offered good benefits. With advancements in technology and lower operating costs overseas; these jobs have virtually disappeared. That, IMO is the biggest cause of the income gap. In fact, I was just out of College working for the V.A. Hospital system when computerization began to effect my employees. The V.A. Administration sent out a directive that required all Department heads to determine how computerization of jobs in their department could reduce the number of employees needed to perform those jobs. The goal was to reduce the number of employees needed. Period.
Unions drove up wages and the cost of employee benefits and companies took advantage of the lower wages they could pay people in other Countries to perform the same jobs. As this all started, there was no adjustment in the Educational system to deal with the loss of occupations replaced by computerization and the loss of the manufacturing industry as we had known it.

We have almost reached the point where the top 50% pay virtually all federal ordinary income tax collected by the Federal Government. Once more that 50% of wage earners owe zero ordinary income tax, we are doomed.

 

Perhaps, but that doesn't contradict what I said in the slightest. The rich don't keep piles of $100 bills in their mattresses. They loan or spend these bills, handing them to other people to loan or spend who, in turn, hand them over to other people loan or spend.

 

You guess wrong.

I've stated my solutions many times. Reverse trickle down. Make education available at lower cost or low interest rate loan to make sure all Americans are trained. Empower unions to represent more workers to leverage better wages. Raise the minimum wage to levels that keep up with wage growth so that working people can make a above poverty level living. Expand and enforce FLSA laws so that people are paid for work and overtime. Cut FICA taxes working middle and lower class folks pay. Raise taxes on the richest to make up the difference and bring down the debt. Eliminate (like Reagan did) the difference between investment income taxes and earned income taxes so that there is not a tax disadvantage to earning money. Create jobs through Govt programs so that there will be more competition for workers.

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See above. Banks are loaning trillions of dollars. The rich keep tens of trillions in offshore accounts and the stock markets, which do little to create demand for goods and services in the economy.

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Then they've been doing a very poor job. Because it is the rich that have been taking more and more of the nation's income and wealth.

 

When you buy a share of stock, your dollars don't go "into" the stock market. Your dollars go to the person who sold you the stock. You own the stock, and the seller now owns your dollars. So when a rich guy buys a share of Apple stock, his money goes to the working class guy who just sold his apple stock. The money goes round and round. Unless you dig a hold and put it in, it is never really "in" anything.

 

Yes, the incomes of the rich have been contributing more and more to the sum of all the incomes in the nation.

And, let me guess, because of this you want the government to take their property and give it to others.