Is "the rich getting richer" a problem?

[Baalzamon]

richardhutnik said:

Baalzamon said:

Lafiel said:

yea the problem is money has gravity, it atracts more money

market regulations and taxation has to keep that in check, because too much money accumulating on some few individuals is bad for the rest

Why is that bad for the rest (Outside of the fact that money buys corruption)?

People say stuff like this all the time, but can never provide any definitive proof.  Prove to me with a definitive argument that people are legitimately worse off when money continues accumulating more and more on a select few (which is actually quite a bit...1% is 3 million Americans).  Prove to me that without this money as it is now, people would somehow be better off.

I took about 5-10 minutes to google here to try to come up with some answers, which is connected to the subject here.  I can go and post something on the Huffington Post here, and will.  Apparently a report out of the IMF speaks of how increased income inequality can slow down economic growth:

http://www.huffingtonpost.com/2011/09/20/income-inequality-economic-growth_n_969933.html

There are numerous other ones also.  If you point here is to try to persuade people that it isn't a problem, please go and find some evidence it isn't.  But, apparently there is information out there on this. 

And this is the IMF article:

http://www.imf.org/external/pubs/ft/fandd/2011/09/Berg.htm

 

The Gini Coefficient is one measure that this looks into.  Are you seriously looking for answers or just want this issue to go away?

Well a major problem is that in general, economics is a bunch of bunk (in my opinion).  Do people work incredibly hard to figure some of these things out?  Sure they do.  But there are only a few things in all of economics that a majority of economists believe the same thing in.  Every other thing is subject to multiple niterpretations (i.e. it is simply what we believe to be the case, but in all reality, we actually have no clue which answer is correct).

Don't get me wrong, I have my own personal feelings about economics and what I like and don't like, but I have had some very good discussions with my father on this very topic.  Despite me liking certain ideas (i.e. lower government spending, etc.), that doesn't mean that lower government spending is actually the best thing for our economy.  Just like I have nothing wrong with the income gap, but I can guarantee you I would be able to find a ton of economists that tell me it is a good thing while there are a ton that will tell me it is a bad thing.

Now, despite me not having an issue with the income gap, I can think of multiple things on why it isn't the greatest.  First off, it makes people incredibly angry.  Rather than giving people the want to work harder so they can reach the point where they are rich, these super rich people might be to a point where it actually discourages such things.  People in lower classes will simply think, "that will never be me."  On the other hand, if we look at what rich people actually do with their money, then we need to realize that (in many cases) this money is being put where it will eventually be reinvested into the economy.

Basically what I'm saying without continuing on forever, is that I don't know whether the income gap is a good thing or bad thing, but there is no definitive proof out there (economics is almost 100% theories) to say one way or another.  People come into topics such as this and state things and say they are bad as if what they are saying is 100% fact.