Is "the rich getting richer" a problem?

[richardhutnik]

Kasz216 said:

Aielyn said:

richardhutnik said:
If the wealth increases spread more evenly, then yes that can happen.  If it is in terms of rich getting richer, where the advantages have an exponential effect, and the games are selectively at the top, then that is a problem.  I assume GFC here stands for "Global Financial Crisis".

I should clarify that I'm referring to "the rich getting richer" in isolation - that is, the rich getting richer at the expense of growth for everyone else.

If the economy becomes stronger, making everyone else truly richer, the rich will also benefit from it. But the converse doesn't work.

Which itself is extremely rare.

In general, when the rich get richer, the economy expands and everybody does better... and yes this is backed up by evidence and is one of the most basic economic realities.  It isn't the other way around, because the rich are getting ricehr BY growing the economy.... they're the ones who are doing it... because they're the only ones equipped for mass wealth creation.

 

I do agree that tax cuts are fairly pointless towards the economy outside of a short term boost.  Though tax raises due nothing but cause a short term to medium term slowdown.

It depends on what the rich do with the money.  If the rich offshore their wealth, invest in China and build factories there and so on, there is no guarantee it benefits the economy of the country where they are at.  Causing an increase in the trade deficit of a country will end up resulting in a hollowing out of means of production, and the country ends up trading off its assets in exchange for imports of goods and services.  The money of the wealthy would end up not growing the economy locally.  In this, there would actually be greater positive economic impact if the government taxed the rich and spent the money on things produced by domestic production.

Anyhow, this is jus a side look at things.  It isn't about what happens regarding the compounding effect and it happening and whether or not that is good or would need to be tempered at least.