Wealth Inequality in America (1 Viewer)

[Maurile Tremblay]

Money can not create money. ... The creation of money in our country is reserved to the banks ...

Are we talking about from an individual's point of view, or from society's point of view? It's true in either case that accumulated capital can generate wealth, but the mechanics are different. Since we were discussing the distributive effects, I was coming from an individual's point of view. In that case, even if we're talking about physical dollar bills instead of accumulated capital in the abstract, money can make money. I can trade you a $1 bill today for two $1 bills a year from now. As far as my wallet is concerned, the dollar bill done replicated.From society's point of view, dollar bills don't replicate; but wealth (in the form of accumulated capital) can generate wealth. If someone offers you $20 to hammer a bunch of nails (because that's how much value would be added by doing so) but you don't have a hammer, I can buy you a hammer for $10 and then we can split the $10 profit. My $10 investment just increased my own capital by $5, and it increased society's capital by $10 (even more if the hammer still has value after the job is done).

 

[GroveDiesel]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

 

[Clifford]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I'm not sure how this is relevant. This would vary wildly by person, and it's also not much of a measure since we don't know where we would be with different policies in place for the last ten years.For instance, I am significantly better off monetarily because I am 35 as opposed to 25.

 

[Rush Limbaugh Fan]

“That’s the problem with the American Dream — makes everyone concerned for the day they’re gonna be rich.”

 

[Rush Limbaugh Fan]

5 years ago I was a renter instead of owning a house. I owned one crappy car, now own two ok cars. I didn't have an HDTV, now I do. Didn't have a PS3, now I do. Had a crappy cellphone, now have a sweet smartphone. My life has certainly improved in lots of very tangible ways in just 5 years, let alone 10 or more. And I certainly wouldn't consider myself wealthy. Probably in the lower half of FBG wealth. I'm unsure why I should be upset that somebody else's life improved even more than mine.

Good thing everyone shares your same situation.

 

[fatguyinalittlecoat]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I think a lot of homeowners have lost wealth over the past 10 years.

 

[GroveDiesel]

5 years ago I was a renter instead of owning a house. I owned one crappy car, now own two ok cars. I didn't have an HDTV, now I do. Didn't have a PS3, now I do. Had a crappy cellphone, now have a sweet smartphone. My life has certainly improved in lots of very tangible ways in just 5 years, let alone 10 or more. And I certainly wouldn't consider myself wealthy. Probably in the lower half of FBG wealth. I'm unsure why I should be upset that somebody else's life improved even more than mine.

Good thing everyone shares your same situation.

Are you materially worse off than you were 10 years ago?

 

[fightingillini]

You might have heard this repeated about ten billion times the last election cycle. His point is that the rich (IE the 1%) can not possibly spend as much as the 1,000 median income people their wages would support. So by giving tax breaks to the rich and not to the middle class, they are placing spendable money in the wrong hands, and not creating near as much demand as there would be with a moderately well-off middle class.

I think it would take a lot of work to establish that. It's not obvious that "spendable money" ends up in different places depending on the progressiveness of tax policies. Spendable money includes money lent and borrowed; it doesn't have to come from directly from the spender's savings account.

So the government is essentially misplacing its bet, thinking that by giving more money to the rich, they will use those extra funds to create new jobs via hiring.

Is "giving more money to the rich" another way of saying "taking less money from the rich"?

Anyone who knows anything about business knows that having the money to hire somoene is not a reason a job gets created. His point is that jobs are only created by demand.

Jobs are created by businesses with the capital (sometimes borrowed) to create them, and a business plan to support them. It takes both capital and demand. Both are relevant to unemployment rates, but I don't think either one is the main limiting factor on employment. That's a pretty complicated subject, though; and again, I think it would take a lot of work to convincingly make the guy's point.

So if the government taxed the rich more, and used those funds to create tax breaks for the middle class that allowed them to buy more, the rich would actually get a lot richer via increased demand for the products and services they sell, and they would be FORCED to hire more people in order to meet the increased demand.

This seems very unlikely. If you take $10 from a rich dude and give it to a poor dude, and the poor dude uses it to buy $10 worth of stuff from the rich dude, the rich dude did not "get a lot richer via increased demand." He got poorer. He got the $10 back, but he increased his cost of goods sold, so he lost overall.In general, you cannot make somebody richer by taking money from him and giving it to somebody else.

Not really interested in debating sematics. The jist of what the guy said was right on, and its coming from someone with tons more knowledge of this subject than either you or I will likely ever have.His point is that

1) Lower taxes on the wealthy does not create jobs (he has a slide on the past ten years that convincingly makes this point. The evidence is right there if you choose to look at it and accept it)

2)Businesses create jobs to meet demand. Therefore demand is the true job creator, and business owners are merely a step in between the creation of the need and the creation of the job.

3) Putting money in the hands of more people, rather than putting money in the hands of far fewer people, creates more demand and therefore more jobs.

At least that is what I got from it. If you got something else that's fine.

You're correct on the demand side. The problem with your argument is that1....who is going to supply the capital to meet the demand and provide jobs? The answer is.....the rich. It's not cheap to start businesses or expand business, so you can't credibly argue that the middle class will provide the capital2. So you're only looking at the issue from one side. Job creation comes from the rich and the middle/lower classes. So you have to give the rich incentives to invest an provide capital to grow/start businesses to meet an increased demand.

3

So you can't argue point #1 IN ISOLATION. Just saying that lower taxes doesn't create jobs isn't entirely true......just as saying lower taxes on the wealthy will automatically create jobs isn't entirely true either. It just isn't that simple. Job creation is a function of a lot of variables, tax policy being one of them. Regulatory enviroment is another. Demand, and so on.

I believe your point #24 should say "Business create jobs to meet demand if the jobs added will add long term extra value to the bottom line". Businesses aren't going to hire even if demand increases if the increased expense of hiring outweighs processing the extra demand. Also, companies need to see an increase in long term demand in order to believe that hiring will help their bottom line. If demand is just a short term fix (ie like a transfer payment stimulus), companies will likely just make their current employees work harder or just hire seasonal/temporary workers to meet the short term demand.

Regarding point #3, I won't disagree that putting more money in hands of more people will increase demand. The issue is.....how do you do it?5 I would like our government to have pro growth policies so that we increase the number of wealthy people.....have more people go from middle class to rich, or lower to middle class. I understand that we have wealth inequality in this country, and it's never going to change....the rich are going to get richer. IMO, it's not the government's responsibility to spread wealth around for the sake of fairness. You keep taxing the successful at alarming rates, then you will give people less incentive to become successful.6 And that's wrong.

1. I'm not trying to provide my argument, I am trying to tell people about someone else's argument whose opinion is way more valid than mine. I just happen to agree with him. Just want to make that clear. Best to just watch his video:

A billionaire isn't your typical business owner, so while I know my knowledge is not the same as the guy you're quoting, there's a lot more than just his opinion. I haven't see the video, but can you prove that the billionaire didn't cherry pick his facts to support his ideology of higher taxes for the rich (if that is what his position is). That's becuase taxes and job creation isn't 100% correlated, and it's not even close.Large public companies can raise capital from thousands, if not millions of investors, so I can see why a billionaire investor of large companies can see that capital can be raised by middle class people.....however, the rich (and Wall Street) is likely providing the most significant piece of a large companies' capital.

My comments are more geared towards a small, medium sized company (say under 250 employees) where the owners are raising most if not all of the capital. And small, medium sized companies is where most of the jobs are. You don't see many folks that are below upper middle class owning and investing in businesses.

Again, I am not arguing that lowering taxes on the wealthy will automatically create jobs. It could, but again, there are many factors that go into job creation. But common sense tells me that if you raise corporate income taxes (or personal income taxes on business owners), that companies will do 2 things... 1) raise prices and pass through to the consumer, or 2) cut expenses in another way to make up for the tax increase. If they can pass the cost to the consumer, then taxes has a much less effect on jobs. If they can't, then a company has to figure out how to reduce expenses to cover the reduced profit margin, and job losses could be one way to do it.

As I said before, you can't argue that increasing taxes kills jobs or decreasing taxes increases jobs in isolation. You would have to see what other factors that apply to the examples that the billionaire used as evidence.

Look, we disagree with your point #5. You believe in wealth redistribution. I don't. I would rather have pro growth policies that result in more people accumulating wealth. You can't it both ways, high economic growth and socialistic policies.

Regarding point #6. We have the highest corporate tax rate in the world. Now I understand that many corporations pay much less than that (and some don't pay their fair share like GE), but our tax system is set up so that multinational corporations can park cash offshore and they have no incentive to bring it back to the US. I believe in a lower corporate tax rate (with very few deductions), so that a company like GE is paying a similar rate as a small corporation. The top personal tax rate is 40%. But that's just federal. Add in state, FICA, Medicare, property taxes.....and the succesful are pay well over 50% of their income in taxes. That's alarming to me. So what is actually "fair" in your mind?

I am not an expert on this topic, but common sense is that taxes is only a part of the equation regarding job creation. Raise them, it's a drag (but could be overcome), lower them, it's an incentive (but not guaranteed to create jobs).

 

[GroveDiesel]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I'm not sure how this is relevant. This would vary wildly by person, and it's also not much of a measure since we don't know where we would be with different policies in place for the last ten years.For instance, I am significantly better off monetarily because I am 35 as opposed to 25.

If the argument is that this gap is increasing because the rich are gaining at the expense of everyone else, then your age doesn't really matter. And if you are better off now than you were before, I think it seems pretty bitter to complain that you deserve to be even more wealthy. You're going to have to show some serious proof that you should have been even better off than you are now.

 

[fightingillini]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I think a lot of homeowners have lost wealth over the past 10 years.

While that's true that house prices have dropped over the last 10 years, most still have that house, so they aren't really worse off materially. They just have less equity in their house (if not negative equity)

 

[fatguyinalittlecoat]

While that's true that house prices have dropped over the last 10 years, most still have that house, so they aren't really worse off materially. They just have less equity in their house (if not negative equity)

You're worse off materially if you have less equity in your home. Not to mention the many people that have been foreclosed upon over the last ten years. Seems like there are probably a lot of people financially worse off than they were 10 years ago.

 

[Ramsay Hunt Experience]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I'm not sure how this is relevant. This would vary wildly by person, and it's also not much of a measure since we don't know where we would be with different policies in place for the last ten years.For instance, I am significantly better off monetarily because I am 35 as opposed to 25.

If the argument is that this gap is increasing because the rich are gaining at the expense of everyone else, then your age doesn't really matter. And if you are better off now than you were before, I think it seems pretty bitter to complain that you deserve to be even more wealthy. You're going to have to show some serious proof that you should have been even better off than you are now.

You should probably provide some proof beyond anecdotes as well. My net worth is lower than it was in 2003. My salary is higher, but I have more debt and less assets as I don't own a home. But that doesn't tell us anything. Nor does your situation.We would expect a 35 year old to have a higher salary than a 25 year old. A more fair comparison would be a 35 year old today against a similarly situated 35 year old in 2003. Or a recent college graduate entering the work force today against a similar graduate 10 years ago. I'd wager that recent graduate is more likely to have more school debt while accepting a starting salary that is very similar to what was being offered in 2003 (fields like nursing seem to be a notable exception).

 

[fightingillini]

While that's true that house prices have dropped over the last 10 years, most still have that house, so they aren't really worse off materially. They just have less equity in their house (if not negative equity)

You're worse off materially if you have less equity in your home. Not to mention the many people that have been foreclosed upon over the last ten years. Seems like there are probably a lot of people financially worse off than they were 10 years ago.

You're worse off financially, not materially with less equity in your home. Note I said that most still have that house. I understand many have foreclosed and they are worse off materially and financially.

 

[Christo]

While that's true that house prices have dropped over the last 10 years, most still have that house, so they aren't really worse off materially. They just have less equity in their house (if not negative equity)

You're worse off materially if you have less equity in your home. Not to mention the many people that have been foreclosed upon over the last ten years. Seems like there are probably a lot of people financially worse off than they were 10 years ago.

Many people has chosen to be foreclosed upon.

 

[DrJ]

While that's true that house prices have dropped over the last 10 years, most still have that house, so they aren't really worse off materially. They just have less equity in their house (if not negative equity)

You're worse off materially if you have less equity in your home. Not to mention the many people that have been foreclosed upon over the last ten years. Seems like there are probably a lot of people financially worse off than they were 10 years ago.

Many people has chosen to be foreclosed upon.

I wish I had that choice.

 

[Politician Spock]

Money can not create money. ... The creation of money in our country is reserved to the banks ...

Are we talking about from an individual's point of view, or from society's point of view? It's true in either case that accumulated capital can generate wealth, but the mechanics are different. Since we were discussing the distributive effects, I was coming from an individual's point of view. In that case, even if we're talking about physical dollar bills instead of accumulated capital in the abstract, money can make money. I can trade you a $1 bill today for two $1 bills a year from now. As far as my wallet is concerned, the dollar bill done replicated.From society's point of view, dollar bills don't replicate; but wealth (in the form of accumulated capital) can generate wealth. If someone offers you $20 to hammer a bunch of nails (because that's how much value would be added by doing so) but you don't have a hammer, I can buy you a hammer for $10 and then we can split the $10 profit. My $10 investment just increased my own capital by $5, and it increased society's capital by $10 (even more if the hammer still has value after the job is done).

As I said before, a person can use money to obtain more money.You can say that from this point of view or that point of view that it looks like it is being "created", but that is just a word choice to describe the fact that it is being obtained.In our current monetary system there are only two events that create dollars:1) Printing by the Federal Reserve... The 12 private Federal Reserve banks print them out of thin air and then uses them to buy assets, usually US Treasury bonds. They can also eliminate dollars from existence by selling their assets, such as US Treasury bonds.2) Fractional Reserve Lending.... A bank holds your deposit in the bank as the reserve for the loans it makes from it. The reserve ratio limit determines just how much money that can be created from this process. For example, if the reserve ratio limit is 10%, and you deposit $10,000 in a bank, that bank can lend out $100,000. Prior to electronic systems, it took quite a while for your $10,000 to produce $100,000 in the banking system, as the bank could only loan out $9,000 first, and then that $9,000 would eventually get deposited into the banking system (the same bank or a different bank) allowing another $8,100 loan to be created from it, and then $7,290 is created from it, and then $6,561 is created from it, etc, etc.... until the $10,000 produced $100,000 (or $90,000... I forget which). But with electronic banking today, that round about process isn't even necessary anymore. The bank can just take that $10,000 deposit and immediately generate a $100,000 loan from it. And like the Federal Reserve can eliminate dollars by selling their assets, Fractional Reserve Lending eliminates dollars when loans are paid back. Their reserve limit allows them to create the dollars into existence again with a new loan... assuming a qualified applicant wants the loan.5 to 7% of the dollars are created from Federal Reserve Printing. 93 to 95% of the dollars are created from Fractional Reserve Lending. ZERO of the dollars are created by someone investing their own money to "create" more money. They are just obtaining money created from Federal Reserve Printing or Fractional Reserve Lending. The currency aspect is a facinating aspect of it all, given how wealth, whether nominal or real, changes based on the creation of more houses, ashtrays, mudpies, etc... as well as the destruction of houses, ashtrays, mudpies, etc... Just in a barter system without currency these wealth changes, or appearence of wealth changes, hold true. But add a currency that is also experiencing creation and elimination and the distribution of wealth can occur even when no assets are being created or destroyed at all.To understand what is going on now, the baby boom generation produced a massive amount of currency into existence through the fractional reserve lending money creation process. They borrowed money to buy houses, cars, funiture, vacations, college eductations for their kids. When a huge percentage of the population is in their "debt generation" period of their life, the economy is flooded with dollars and booms. This is why the 80's and 90's were so good.But when that same generation then begins to approach retirement, they are motivate to eliminate their debts. When they do this, they are eliminating Fractional Reserve Lending created money from existence. This is no different than the rock falling on the house and making the other 9 houses cost more. When dollars are eliminated, they are worth more, which means prices of goods become cheaper. While we'd love this from a loaf of bread, gallon of gas, gallon of milk aspect, this effect is devestating to those who own assets such as stocks and real estate as those are investments that are supposed to obtain more money for those people (or create money if you'd like to use that word). So the rich, those who own assets such as stocks and real estate, HATE IT when money is elimintated from existence, causing their investments to go down in value.So if the baby boomers are having such an impact on the existence of Fractional Reserve Lended dollars, how can we stop prices from falling? Easy... offset it with dollars created by the Federal Reserve.What we are experiencing today is a massive force of deflation (the elimination of Fractional Reserve Lended dollars) with an equally massive force of inflation (the creation of Federal Reserve Notes). As long as the Federal Reserve can print at the same rate that the baby boomers are eliminating dollars, things appear like everything is okay.But here's the problem.... the dollar isn't just a US currency. It's the world reserve currency. Nearly every country in the world uses it to conduct international trade. So while we don't experience drastically rising prices from the Federal Reserve printing because we have the baby boom generation offsetting it with their negative effect on the Fractional Reserve lending system... other countries don't have a baby generation problem in their banking system. So they DO experience inflation as a result of our Federal Reserve printing. A good way to describe this is that we export our inflation, which is something that only the keeper of the world's reserve currency can do. To make a long story short, we are the cause of currency wars. Other countries are having to manipulate their currencies to offset the negative effects they experience from what we are doing. One of the results of this is that dollars are coming back into the US. This is causing US assets such as stocks and real esetate to rise, despite average household income still falling.And THAT is why the rich are getting richer and the poor are getting poorer. It's an issue with our currency... how it is created, how it is eliminated, and how it is currently flowing internationally.

 

[Clifford]

You might have heard this repeated about ten billion times the last election cycle. His point is that the rich (IE the 1%) can not possibly spend as much as the 1,000 median income people their wages would support. So by giving tax breaks to the rich and not to the middle class, they are placing spendable money in the wrong hands, and not creating near as much demand as there would be with a moderately well-off middle class.

I think it would take a lot of work to establish that. It's not obvious that "spendable money" ends up in different places depending on the progressiveness of tax policies. Spendable money includes money lent and borrowed; it doesn't have to come from directly from the spender's savings account.

So the government is essentially misplacing its bet, thinking that by giving more money to the rich, they will use those extra funds to create new jobs via hiring.

Is "giving more money to the rich" another way of saying "taking less money from the rich"?

Anyone who knows anything about business knows that having the money to hire somoene is not a reason a job gets created. His point is that jobs are only created by demand.

Jobs are created by businesses with the capital (sometimes borrowed) to create them, and a business plan to support them. It takes both capital and demand. Both are relevant to unemployment rates, but I don't think either one is the main limiting factor on employment. That's a pretty complicated subject, though; and again, I think it would take a lot of work to convincingly make the guy's point.So if the government taxed the rich more, and used those funds to create tax breaks for the middle class that allowed them to buy more, the rich would actually get a lot richer via increased demand for the products and services they sell, and they would be FORCED to hire more people in order to meet the increased demand.

This seems very unlikely. If you take $10 from a rich dude and give it to a poor dude, and the poor dude uses it to buy $10 worth of stuff from the rich dude, the rich dude did not "get a lot richer via increased demand." He got poorer. He got the $10 back, but he increased his cost of goods sold, so he lost overall.In general, you cannot make somebody richer by taking money from him and giving it to somebody else.

Not really interested in debating sematics. The jist of what the guy said was right on, and its coming from someone with tons more knowledge of this subject than either you or I will likely ever have.His point is that

1) Lower taxes on the wealthy does not create jobs (he has a slide on the past ten years that convincingly makes this point. The evidence is right there if you choose to look at it and accept it)

2)Businesses create jobs to meet demand. Therefore demand is the true job creator, and business owners are merely a step in between the creation of the need and the creation of the job.

3) Putting money in the hands of more people, rather than putting money in the hands of far fewer people, creates more demand and therefore more jobs.

At least that is what I got from it. If you got something else that's fine.

You're correct on the demand side. The problem with your argument is that1....who is going to supply the capital to meet the demand and provide jobs? The answer is.....the rich. It's not cheap to start businesses or expand business, so you can't credibly argue that the middle class will provide the capital2. So you're only looking at the issue from one side. Job creation comes from the rich and the middle/lower classes. So you have to give the rich incentives to invest an provide capital to grow/start businesses to meet an increased demand.

3

So you can't argue point #1 IN ISOLATION. Just saying that lower taxes doesn't create jobs isn't entirely true......just as saying lower taxes on the wealthy will automatically create jobs isn't entirely true either. It just isn't that simple. Job creation is a function of a lot of variables, tax policy being one of them. Regulatory enviroment is another. Demand, and so on.

I believe your point #24 should say "Business create jobs to meet demand if the jobs added will add long term extra value to the bottom line". Businesses aren't going to hire even if demand increases if the increased expense of hiring outweighs processing the extra demand. Also, companies need to see an increase in long term demand in order to believe that hiring will help their bottom line. If demand is just a short term fix (ie like a transfer payment stimulus), companies will likely just make their current employees work harder or just hire seasonal/temporary workers to meet the short term demand.

Regarding point #3, I won't disagree that putting more money in hands of more people will increase demand. The issue is.....how do you do it?5 I would like our government to have pro growth policies so that we increase the number of wealthy people.....have more people go from middle class to rich, or lower to middle class. I understand that we have wealth inequality in this country, and it's never going to change....the rich are going to get richer. IMO, it's not the government's responsibility to spread wealth around for the sake of fairness. You keep taxing the successful at alarming rates, then you will give people less incentive to become successful.6 And that's wrong.

1. I'm not trying to provide my argument, I am trying to tell people about someone else's argument whose opinion is way more valid than mine. I just happen to agree with him. Just want to make that clear. Best to just watch his video:

No offense, but I didn't read any further than the first bolded. Then I scanned and saw the second bolded. If you admit you are no expert, why not listen to someone who can legitimately claim to be one?

These are not my opinions, though I agree with them. His opinions are also not the only ones that come from someone who has run multiple companies, hired workers, increased profits, etc. If you watch the video and look at his background and say BS, fine, but hear the guy out.

Like I said, I don't expect anyone to listen to me. I have never run a company or made decisions on hiring, nor have I been privvy to the tax system that Hanaeur has been privvy to. That is why I listen to him.

So instead of writing a treatise that starts off acknowledging you have no knowledge of any of the points I am trying to relay (which, again, are not my own), why not just watch the video and decide for yourself what you agree and disagree with?

ETA: Hanauer got his business start at the family-owned Pacific Coast Feather Company, where he continues to serve as Co-chair and CEO.

http://en.wikipedia.org/wiki/Nick_Hanauer

 

[Clifford]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I'm not sure how this is relevant. This would vary wildly by person, and it's also not much of a measure since we don't know where we would be with different policies in place for the last ten years.For instance, I am significantly better off monetarily because I am 35 as opposed to 25.

If the argument is that this gap is increasing because the rich are gaining at the expense of everyone else, then your age doesn't really matter. And if you are better off now than you were before, I think it seems pretty bitter to complain that you deserve to be even more wealthy. You're going to have to show some serious proof that you should have been even better off than you are now.

I now remember why I gave myself a month off from this place.Nowhere anywhere did I ever say I should be better off than I am now. All I did was post a link to a billionaire talking about this subject and attempted to accurately relay his points in the hope that people would listen to someone more accomplished than themselves.

 

[[icon]]

Many people has chosen to be foreclosed upon.

Engrish?

 

[17seconds]

Thoughts?

Why should I care? What difference does it make to you or me that someone we've never met has a buttload of money?

You are missing the point. The concepts being discussed in the links are about overall distribution, not one individual vs. another.You must agree that income/wealth distribution affects the economy, right? I've never met anyone who would say a flat, socialistic distribution leads to the same economic prosperity and growth as ramp or exponential distribution does.If you agree with that, then there must be distributions that are better or worse. Yet you say you don't care. So you must think the current distribution is ideal?

I'm not missing the point. The overall distribution is based on individuals. And as MT has already stated, there are many more factors that go into making a healthy economy than just income distribution. Focusing on one factor is meaningless.

You missed 2 points there. Doing it on purpose? You are making unrelated points.point #1. These 2 things can be true at the same time: it can make no difference to me whether another individual makes a buttload of money, yet it can make a difference to the economy if income distribution is one way or another. You tried to relate something that is unrelated.point #2. I never said income distribution is the only factor. Again, you tried to claim a point was being made that was not.And you never answered the questions. Do you think income distribution doesn't matter at all? A flat (socialist) distribution is the same as an exponential distribution?

 

[GroveDiesel]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

I'm not sure how this is relevant. This would vary wildly by person, and it's also not much of a measure since we don't know where we would be with different policies in place for the last ten years.For instance, I am significantly better off monetarily because I am 35 as opposed to 25.

If the argument is that this gap is increasing because the rich are gaining at the expense of everyone else, then your age doesn't really matter. And if you are better off now than you were before, I think it seems pretty bitter to complain that you deserve to be even more wealthy. You're going to have to show some serious proof that you should have been even better off than you are now.

I now remember why I gave myself a month off from this place.Nowhere anywhere did I ever say I should be better off than I am now. All I did was post a link to a billionaire talking about this subject and attempted to accurately relay his points in the hope that people would listen to someone more accomplished than themselves.

I never talked about nor referenced your post about the billionaire's views. I hadn't even read it. I asked a simple question and you responded and my response was to that. Not sure why you're getting all worked up.

 

[Christo]

Thoughts?

Why should I care? What difference does it make to you or me that someone we've never met has a buttload of money?

You are missing the point. The concepts being discussed in the links are about overall distribution, not one individual vs. another.You must agree that income/wealth distribution affects the economy, right? I've never met anyone who would say a flat, socialistic distribution leads to the same economic prosperity and growth as ramp or exponential distribution does.If you agree with that, then there must be distributions that are better or worse. Yet you say you don't care. So you must think the current distribution is ideal?

I'm not missing the point. The overall distribution is based on individuals. And as MT has already stated, there are many more factors that go into making a healthy economy than just income distribution. Focusing on one factor is meaningless.

You missed 2 points there. Doing it on purpose? You are making unrelated points.point #1. These 2 things can be true at the same time: it can make no difference to me whether another individual makes a buttload of money, yet it can make a difference to the economy if income distribution is one way or another. You tried to relate something that is unrelated.point #2. I never said income distribution is the only factor. Again, you tried to claim a point was being made that was not.And you never answered the questions. Do you think income distribution doesn't matter at all? A flat (socialist) distribution is the same as an exponential distribution?

I didn't answer your second question for the same reason I didn't answer the other ridiculous question posed to me--because they have no basis in reality. The planet will explode before the US has an economy with a flat distribution or an economy where 99.999% of the wealth is concentrated in one individual.And I have been very clear about the answer to your other question, within the realm of reality income distribution does not matter to anyone who isn't just looking for a reason to

 

[Ramsay Hunt Experience]

I have to admit that I'm not sure why we'd take Hanauer's word for it, even if I'm sympathetic to it. I'm sure I can find a billionaire or two to disagree with him. Jack Welch, perhaps.

There are plenty of economists who think the Great Divergence is a "big deal." Krugman and Stiglitz, certainly. But you can probably also find other Nobel laureates who won't make the conservatives here have a conniption. I can quote Greenspan. And you can find guys like Thomas Sowell who don't think it's a big deal.

If we just want to argue from authority let's just have both sides post their lists.

 

[17seconds]

Thoughts?

Why should I care? What difference does it make to you or me that someone we've never met has a buttload of money?

You are missing the point. The concepts being discussed in the links are about overall distribution, not one individual vs. another.You must agree that income/wealth distribution affects the economy, right? I've never met anyone who would say a flat, socialistic distribution leads to the same economic prosperity and growth as ramp or exponential distribution does.If you agree with that, then there must be distributions that are better or worse. Yet you say you don't care. So you must think the current distribution is ideal?

I'm not missing the point. The overall distribution is based on individuals. And as MT has already stated, there are many more factors that go into making a healthy economy than just income distribution. Focusing on one factor is meaningless.

You missed 2 points there. Doing it on purpose? You are making unrelated points.point #1. These 2 things can be true at the same time: it can make no difference to me whether another individual makes a buttload of money, yet it can make a difference to the economy if income distribution is one way or another. You tried to relate something that is unrelated.point #2. I never said income distribution is the only factor. Again, you tried to claim a point was being made that was not.And you never answered the questions. Do you think income distribution doesn't matter at all? A flat (socialist) distribution is the same as an exponential distribution?

I didn't answer your second question for the same reason I didn't answer the other ridiculous question posed to me--because they have no basis in reality. The planet will explode before the US has an economy with a flat distribution or an economy where 99.999% of the wealth is concentrated in one individual.And I have been very clear about the answer to your other question, within the realm of reality income distribution does not matter to anyone who isn't just looking for a reason to

You keep coming up with new reasons to avoid debating the concept, so forget it.

 

[Unlucky]

MT and fightingillini both referenced the need for capital for companies. Getting capital doesn't seem to be a problem that is restricting growth in our economy, however. Lack of demand is causing slower growth. This is why the argument that the rich need to keep more money so they can invest it is a faulty one. Companies aren't hiring due to lack of demand. Not lack of capital to pay workers.

The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)

I will argue that money changing hands in the economic cycle fuels growth. I spend money -> you make money -> you spend that money -> Christo makes money, etc. What I'm arguing is that we can increase growth if the government taxes the rich at a higher rate and SPENDS that money back into the economy. (not using to reduce deficit) Instead of the rich investing that money (which isn't creating enough jobs) the middle class and poor spend the money and create demand, which creates jobs, and we have a positive feedback loop.

Tax rates and policy have swung too far in favor of the rich, and some rebalancing could improve the economy. In no way am I suggesting the pendulum swing back to rates of 70%, but returning capital gains rates to match regular rates and creating a couple of new brackets at $1 Million and $10 Million with 5% rate increases at each bracket could make a lot of sense.

 

[Christo]

The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)

I've seen nothing to suggest that has caused slower economic growth.

 

[Christo]

Thoughts?

Why should I care? What difference does it make to you or me that someone we've never met has a buttload of money?

You are missing the point. The concepts being discussed in the links are about overall distribution, not one individual vs. another.You must agree that income/wealth distribution affects the economy, right? I've never met anyone who would say a flat, socialistic distribution leads to the same economic prosperity and growth as ramp or exponential distribution does.If you agree with that, then there must be distributions that are better or worse. Yet you say you don't care. So you must think the current distribution is ideal?

I'm not missing the point. The overall distribution is based on individuals. And as MT has already stated, there are many more factors that go into making a healthy economy than just income distribution. Focusing on one factor is meaningless.

You missed 2 points there. Doing it on purpose? You are making unrelated points.point #1. These 2 things can be true at the same time: it can make no difference to me whether another individual makes a buttload of money, yet it can make a difference to the economy if income distribution is one way or another. You tried to relate something that is unrelated.point #2. I never said income distribution is the only factor. Again, you tried to claim a point was being made that was not.And you never answered the questions. Do you think income distribution doesn't matter at all? A flat (socialist) distribution is the same as an exponential distribution?

I didn't answer your second question for the same reason I didn't answer the other ridiculous question posed to me--because they have no basis in reality. The planet will explode before the US has an economy with a flat distribution or an economy where 99.999% of the wealth is concentrated in one individual.And I have been very clear about the answer to your other question, within the realm of reality income distribution does not matter to anyone who isn't just looking for a reason to

You keep coming up with new reasons to avoid debating the concept, so forget it.

New reasons? It's the same reason. You guys insist on debating scenarios that have no basis in reality.

 

[Clifford]

I have to admit that I'm not sure why we'd take Hanauer's word for it, even if I'm sympathetic to it. I'm sure I can find a billionaire or two to disagree with him. Jack Welch, perhaps.

There are plenty of economists who think the Great Divergence is a "big deal." Krugman and Stiglitz, certainly. But you can probably also find other Nobel laureates who won't make the conservatives here have a conniption. I can quote Greenspan. And you can find guys like Thomas Sowell who don't think it's a big deal.

If we just want to argue from authority let's just have both sides post their lists.

I'm not asking people to take what he is saying as gospel, just asking for then to listen with an open mind. I'm sure there are plenty who would disagree as well. Steve Wynn might, for example, I don't know.I really don't understand why people can't look at this based on the point he is making rather than based on a bunch of other points no one seems to be making. Anyway this is feeling pointless.

To me his point about earning 1,000x what the median earner makes, but not being able to spend 1,000x times as much makes so much sense it's hard to understand what else there is to say. Even if he's buying jeans at $500 a pop, he can't make up for the volume.

His point is not that people should not be allowed to be rich. His point is not even that the rich should pay higher taxes.

His point is that both numbers and common sense show that reducing taxes on the wealthy significantly did not increase jobs at all, and instead coincided with the biggest job loss we have seen in some time. As he points out, if the adage were true we would be awash in jobs right now.

Anyone can look at the numbers and tell that we are not. So, we should all be able to call BS on the belief that lowering taxes on the wealthy creates jobs. We might disagree with what creates jobs, but we should all be able to agree that reducing taxes for the wealthy does not. We should also all be able to follow that simple logic that increased demand will eventually outpace the vehicles of production if the vehicles of production don't increase along with demand. Therefore, demand is the principal actor that dictates when companies hire new people.

So what we should all be looking at is how we can put more money into the hands of the middle class as priority #1 in turning around the economy and stimulating job growth. Instead we're talking about where we were 10 years ago and throwing around ridiculous terms like socialism and "wealth redistribution".

Just seems like a waste.

 

[Clifford]

MT and fightingillini both referenced the need for capital for companies. Getting capital doesn't seem to be a problem that is restricting growth in our economy, however. Lack of demand is causing slower growth. This is why the argument that the rich need to keep more money so they can invest it is a faulty one. Companies aren't hiring due to lack of demand. Not lack of capital to pay workers. The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)I will argue that money changing hands in the economic cycle fuels growth. I spend money -> you make money -> you spend that money -> Christo makes money, etc. What I'm arguing is that we can increase growth if the government taxes the rich at a higher rate and SPENDS that money back into the economy. (not using to reduce deficit) Instead of the rich investing that money (which isn't creating enough jobs) the middle class and poor spend the money and create demand, which creates jobs, and we have a positive feedback loop.Tax rates and policy have swung too far in favor of the rich, and some rebalancing could improve the economy. In no way am I suggesting the pendulum swing back to rates of 70%, but returning capital gains rates to match regular rates and creating a couple of new brackets at $1 Million and $10 Million with 5% rate increases at each bracket could make a lot of sense.

If people actually read this you might have saved this thread.

 

[Chadstroma]

Why should wealth be equal?

 

[Ramsay Hunt Experience]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

 

[Chadstroma]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

At what point is unequal equal enough?

 

[17seconds]

Thoughts?

Why should I care? What difference does it make to you or me that someone we've never met has a buttload of money?

You are missing the point. The concepts being discussed in the links are about overall distribution, not one individual vs. another.You must agree that income/wealth distribution affects the economy, right? I've never met anyone who would say a flat, socialistic distribution leads to the same economic prosperity and growth as ramp or exponential distribution does.If you agree with that, then there must be distributions that are better or worse. Yet you say you don't care. So you must think the current distribution is ideal?

I'm not missing the point. The overall distribution is based on individuals. And as MT has already stated, there are many more factors that go into making a healthy economy than just income distribution. Focusing on one factor is meaningless.

You missed 2 points there. Doing it on purpose? You are making unrelated points.point #1. These 2 things can be true at the same time: it can make no difference to me whether another individual makes a buttload of money, yet it can make a difference to the economy if income distribution is one way or another. You tried to relate something that is unrelated.point #2. I never said income distribution is the only factor. Again, you tried to claim a point was being made that was not.And you never answered the questions. Do you think income distribution doesn't matter at all? A flat (socialist) distribution is the same as an exponential distribution?

I didn't answer your second question for the same reason I didn't answer the other ridiculous question posed to me--because they have no basis in reality. The planet will explode before the US has an economy with a flat distribution or an economy where 99.999% of the wealth is concentrated in one individual.And I have been very clear about the answer to your other question, within the realm of reality income distribution does not matter to anyone who isn't just looking for a reason to

You keep coming up with new reasons to avoid debating the concept, so forget it.

New reasons? It's the same reason. You guys insist on debating scenarios that have no basis in reality.

You must have been a hoot in philosophy class

 

[badmojo1006]

How many people here can legitimately argue that they're worse off materially than they were 10 years ago?

It all depends on the person, but I am way less off now then I was 10 years ago

 

[17seconds]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

At what point is unequal equal enough?

When it is better for the economy.You guys keep assuming this is about fairness, or about rich people not deserving something. Paranoia

 

[Unlucky]

The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)

I've seen nothing to suggest that has caused slower economic growth.

Let me help you get started: One ArticleIn case you weren't sure if the tax cuts favoring the wealthy have led to this inequality: Then try this article

 

[humpback]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

At what point is unequal equal enough?

When it is better for the economy.You guys keep assuming this is about fairness, or about rich people not deserving something. Paranoia

So what's the "fair share" nonsense about?

 

[Ministry of Pain]

It just shows that we are coming to the end of the American Empire and there is an ongoing redistribution of wealth to other countries and eventually the poor and middle class will turn on the rich since we got 'em numbers wise and we'll overthrow the government. Someone will step up and be a new dictator and America will join the sad ranks of other countries like North Korea and Iran.

 

[MaxThreshold]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

At what point is unequal equal enough?

When it is better for the economy.You guys keep assuming this is about fairness, or about rich people not deserving something. Paranoia

So what's the "fair share" nonsense about?

oof! That's gonna hurt 1.7seconds. Can't wait for the answer.

 

[Unlucky]

It just shows that we are coming to the end of the American Empire and there is an ongoing redistribution of wealth to other countries and eventually the poor and middle class will turn on the rich since we got 'em numbers wise and we'll overthrow the government. Someone will step up and be a new dictator and America will join the sad ranks of other countries like North Korea and Iran.

This is sarcasm, right?

 

[Chadstroma]

Why should wealth be equal?

Nobody is arguing it should be. Some people argue that wealth should be less unequal. There's a difference.

At what point is unequal equal enough?

When it is better for the economy.You guys keep assuming this is about fairness, or about rich people not deserving something. Paranoia

This whole thing is about 'wealth inequality'... so I ask, why should wealth be equal. I am told that some argue wealth should be less unequal... so, I ask what does that look like. I am told that it is about the economy and that I am paranoid. ok.

 

[Jewell]

It just shows that we are coming to the end of the American Empire and there is an ongoing redistribution of wealth to other countries and eventually the poor and middle class will turn on the rich since we got 'em numbers wise and we'll overthrow the government.

Correct in the big picture regarding the end of the American Empire, but wrong in the details. The American poor will not have to overthrow the government. Instead, to tie in another thread, it will be more like a Hugo Chavez situation. Chavez was elected three times because he was able to use rhetoric, resentment, anti-elite sentiment, and media control to get the poor (the majority) to elect him.

 

[Christo]

The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)

I've seen nothing to suggest that has caused slower economic growth.

Let me help you get started: One ArticleIn case you weren't sure if the tax cuts favoring the wealthy have led to this inequality: Then try this article

"may take a toll on growth""might mean lower levels of economic growth"

"might shorten the nations economic expansions"

"might mean less stable economic expansions and sluggish growth"

"inequality might help explain the recession and the sluggish recovery after it"

"economists and policy experts are facing the thorny and politically freighted question of what the United States’ inequality might mean over the next several years"

 

[Unlucky]

The tax changes over the last 30 years have allowed the money to pile up at the upper end, where it's just sitting. That is the gist of the problem being discussed here. When tax policies allow the money to accumulate at greater rates at the top and that results in slower economic growth, then we have a problem. (looking at Christo)

I've seen nothing to suggest that has caused slower economic growth.

Let me help you get started: One ArticleIn case you weren't sure if the tax cuts favoring the wealthy have led to this inequality: Then try this article

"may take a toll on growth""might mean lower levels of economic growth"

"might shorten the nations economic expansions"

"might mean less stable economic expansions and sluggish growth"

"inequality might help explain the recession and the sluggish recovery after it"

"economists and policy experts are facing the thorny and politically freighted question of what the United States’ inequality might mean over the next several years"

All you asked for was something to suggest it.

 

[Ministry of Pain]

It just shows that we are coming to the end of the American Empire and there is an ongoing redistribution of wealth to other countries and eventually the poor and middle class will turn on the rich since we got 'em numbers wise and we'll overthrow the government.

Correct in the big picture regarding the end of the American Empire, but wrong in the details. The American poor will not have to overthrow the government. Instead, to tie in another thread, it will be more like a Hugo Chavez situation. Chavez was elected three times because he was able to use rhetoric, resentment, anti-elite sentiment, and media control to get the poor (the majority) to elect him.

Sounds like another politician I know...

 

[zDragon]

And here we are back at my original point; I haven't seen anything that convinces me it's a problem.

Let's start over then. Do you see any potential problems arising when a country has its wealth concentrated into a smaller and smaller group of people?

None other than some people in the media and on message boards whining about it.

Imagine a scenario where 1 person in America controlled 99.99999% of wealth. Can you envision any negative consequences of that situation?

Why would anyone even pretend to respond to this question? It's simply trolling or shows that no one should ever consider anything you say as serious again.One person have over 15 Trillion while the rest of the nation has about 150,000 to work with. Then take our population is around 313 million or so?

 

[Jewell]

Some 95% of 2009-2012 Income Gains Went to Wealthiest 1%WSJ, September 10, 2013

Research released this month shows that the incomes of the well-off have largely climbed back from the toll of the most recent recession while those of the poor have yet to start recovering.

According to the latest version of “Striking it Richer: The Evolution of Top Incomes in the United States,” by Emmanuel Saez, of the University of California, Berkeley, the income inequality gap has been expanding, rather than narrowing, as the 2007-2009 recession recedes. That trend has been unfolding for more than 30 years, with the highest earners only temporarily set back by the most recent downturn.

The findings, based in part on U.S. income-tax data and census figures, update Mr. Saez’s earlier work with Thomas Picketty, with initial income estimates for 2012. The research will be updated again in January 2014.

Among the highlights:

–All told, average inflation-adjusted income per family climbed 6% between 2009 and 2012, the first years of the economic recovery. During that period, the top 1% saw their incomes climb 31.4% — or, 95% of the total gain — while the bottom 99% saw growth of 0.4%.

–Last year, the richest 10% received more than half of all income — 50.5%, or the largest share since such record-keeping began in 1917. Here is how the top earners break down: Top 1%: incomes above $394,000 in 2012; Top 5%: incomes between $161,000 and $394,000; Top 10%: incomes between $114,000 and $161,000.

–The housing and stock markets give and they also take away. The one-percenters saw their incomes slide 36.3% during the 2007-2009 recession; incomes of the 99-percenters fell 11.6% during the downturn. “The fall in top decile income share from 2007 to 2009 is actually less than during the 2001 recession from 2000 to 2002, in part because the Great Recession has hit bottom 99% incomes much harder than the 2001 recession, and in part because upper incomes excluding realized capital gains have resisted relatively well during the Great Recession,” Mr. Saez wrote.

 

[Johnnymac]

I think MOP pretty much has the right idea. This country is a pile of dog#### sliding downhill faster than a freight train. It's all because we have allowed big business to control everything. Politicians don't care about Joe Blow (the vast majority of the american people), they do care about money and power. It will end someday and it won't be a good thing for anyone in this country.

 

[tommyGunZ]

I think MOP pretty much has the right idea. This country is a pile of dog#### sliding downhill faster than a freight train. It's all because we have allowed big business to control everything. Politicians don't care about Joe Blow (the vast majority of the american people), they do care about money and power. It will end someday and it won't be a good thing for anyone in this country.

That's a cop-out, IMO. Politicians are only doing what their constituents want them to do.

 

[tommyGunZ]

The bigger problem is that we have almost 1/2 the American public who believe that the rules as currently concocted need to be amended to tilt the game more in favor of the 1%, and that those who have been "losers" in the wealth distribution game are the problem.

It's insane.