| Kasz216 said: Wealth is part of a whole. That is why we have recessions. Which are usually caused by "growth" without takeaway. There is no such thing as everyone winning when it comes to the economy because wealth is part of the whole. For one to gain, another must lose an equal amount. If not eventually the market will adjust eventually, and everyone will lose a small amount to offset for the ratio. |
One thing a lot of people forget is that wealth and poverty are relative relationships. As an example, a person in the western world would (probably) be considered poor if they simply could not afford to buy an iPod or videogame console; in contrast, a person in many countries around the world would be considered wealthy if they could feed their family 3 meals a day.
In a free market ecconomy there will always be wealthy people and there will always be poor people mainly because wealth is the incentive for working harder and doing more. This doesn't mean that living in poverty will always represents the same lifestyle as it does today; in fact, in most parts of the world people who are poor today are living a (much) more luxurious lifestyle than the middle class from their grandparents generation.
This is certainly not a popular concept with politicians because they can simply buy votes with the promise of making everyone far wealthier by stealing the wealth of the rich.
On a side note ... About 18 months ago I began to predict a (fairly) deep recession/depression in the US ecconomy because housing prices were unrealistic, and these high "values" for the home allowed homeowners to create imaginary wealth; I was by no means alone as thousands of bloggers began seeing the cracks in the system, although most were called crack-pots by the established analysts for predicting a recession in 12 to 24 months.
The reason why this is important is that the upcomming recession is necessary. Although it will not be entirely fair the recession will end up heavily punishing people who tried to cheat the system; trying to avoid the recession will likely end up punishing everyone equally (even those with good financial management). One of the things that keeps the ecconomy healthy (preventing hyper inflation for instance) is the moral-costs from foolish financial management of companies and households.
