Is "the rich getting richer" a problem?

[kaneada]

Chark said:

drakesfortune said:

Chark said:
There exists a diminishing return on the benefits one rich individual can have on society. 

 

NONSENSE!  Says who?  You?  Your liberal professors?  Nonsense.  That's a statement with nothing but wind behind it.  That's like me saying all butterflies are orange, because that's what I think.  Or all teachers are bad.

Bull!  Some rich people get to a point where adding money to their pool doesn't help anyone.  MOST rich people aren't idiots throwing their dollars under the mattress though!  Most rich people have almost ALL of their wealth invested in stocks or bonds (funding our ridiculous deficit).  How many rich people do you know that just sit on a big pile of cash under their mattress?  NONE do that.  Even if they have it sitting in a bank account, are you so clueless about economics that you think that the money is really sitting in the bank in a vault somewhere?  What does the bank do with the money they take in?  They loan it to MAROONS like you to buy things like houses, or to small businesses to finance the creation of new wealth.  If the rich guy invests it in stocks, as most do, then that money is being put to use by companies to create wealth and grow jobs.

The idea that the rich getting richer is bad for you is so incredibly stupid.  It's the drivel that comes out of leftist universities today, and it's the reason so many people are clueless about economics.  Wealth redistribution is the WORST way to manage a nation's wealth.  It flushes it down the toiled, subtracting from the wealth of ALL people.  Whereas a rich guy investing his money, or sitting on it in a bank, is benefiting the wealth CREATORS in our society.   

Aye carumba.  This is what we get for not teaching economics in schools.  We have a nation of economically retarded individuals.

 

Thank you for all the kind words. Notice in your first sentance after you say "Bull!" you are supporting my statment of diminishing returns based on the individual involved. I never stated that the returns were static across the board and as a diminishing value there will always exist some benefit. The concept is that higher returns can sometimes be acheived from other individuals who aren't rich. Acheiving those returns is often addressed through a system of loans, as stated.

I stated that the rich getting richer effect is good, not bad. Also, isn't it a tad unfair to generalize the education system as leftist? My univesity happens to be vastly conservative and I was taught traditonal economics and non-keynsian modern economics, after the fed essentially. 

Progressive taxes are not the same as wealth redistribution and I never claimed that was what I felt should be done economically. The United States federal income tax has always been progressive.

There is one part of this argument that really doesn't make sense to me, so help me out here. The rich, no doubt, invest money into stocks and bonds, and that money is in turn turned into loans that are often taken by the middle class; but if the middle class debt to income ratio is high (which is the case in America) then it doesn't matter how much money there is to loan to the middle class. Loans will get rejected based on this.

With that being said, there is nothing wrong with some wealth being distributed as loans in this system, it is one way that middle class prospers, but this does not help the overall economy, which there is data that indicates that the average wealthy person spends in the same range on services and goods as the average middle class consumer. When you consider that gains for the wealthy have raised steadily and substatially over the last 30 years, and wages for the middle class have stagnated over that same period of time, a problem with the current implementation of trickle down economics starts to show its flaws. A job that paid 45K in 1980 only pays marginally better today while if the rate of increase that existed in the 1970's held true then that job would pay around 94k a year, which would maintain with the rate of inflation.)

The point I'm making is not that rich shouldn't get richer, and its not that the rich don't invest in the middle class, its that they are not investing evenly. Placing money in stocks and bonds, does invest money into companies which could be used for job creation; however, if consumer demand is low why would that company create jobs that only hurt their bottom line? That would be a waste of invested money. Instead if those investments were placed into employee salaries, then the middle class that would profit from that would be able to invest in loans, services, and goods, which would in turn spark comany growth, job creation, and higher bottom lines for these companies.