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Forums - Politics - Is "the rich getting richer" a problem?

Aielyn on 13 June 2012
TheProphet said:
Do not covet thy neighbour's ass. Covetesness is a very powerful desire that does no good. Skill are distributed unevenly, so wealth always will to. 'The rich getting richer' is a socialist cry to hate the rich. Without the rich we would be all living in proverty. A few rich helps society. Just look at the soviet society. Even the poorest in America are richer than 90 percent of the world. Thou shalt no covet, it is bad for you, and the people you are jealous of.

That's quite the Ice Cream Koan, you've got there.

And I'm sorry, but no, the "poorest Americans" are just as poor as the poorest people in just about any country in the world. If you think otherwise, then you have lived a very cloistered life.



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Red4ADevil on 13 June 2012

It's only a problem when its the rich corrupt buisnessmen that have been influencing our gov. The other rich are not really a problem.



richardhutnik on 14 June 2012
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?



Kasz216 on 14 June 2012
richardhutnik said:
Kasz216 said:
Badassbab said:
Kasz216 said:
Badassbab said:
I don't think it's a case of the rich getting richer which is the issue, the rich will nearly always get richer. The key issue is when the rich are getting at the expense of others. So for example the board of directors are getting richer by making everyone work longer, for the same or less and by giving each worker ever more tasks without hiring more staff. So while in a way they've made the company more efficient and cost effective, this only really benefits them and no one else. The Government isn't collecting more taxes, the workers aren't getting paid more and society barely benefits from this approach. The only possible benefit is with the extra money the directors are paying themselves they will have more money to spend say on luxury or other items.

Actually, if they the empoyees are workin longer for the same amount and the employers are making more money.  The government is getting more in taxes.

Additionally, say the employees are working for less... and the employers are just "stealing" that money.... the government still gets more in taxes thanks to progressive taxation.

Depends really. The extra money the Directors make could be paid as dividends which is taxed at a lot less than what the Government would tax on a salary.  Or it could be retained earnings in which case there's no tax provided it is invested back into the company.

If it's retained as earnings the rich aren't getting richer though.

Dividends are a good point.  Though I would point out dividends would also be paid out to other working class/middle class people.

Stockmarket participation rate in the US is extremly high... not even counting things like pension funds.

And that, to reference my other JP Morgan thread, where "too big to fail" is now being discussed, is seting up yet another prime situation where if Wall Street goes bat loco, on a larger scale than JP Morgan did again, there will be strong pull for yet another bail out, lest people's life savings get wiped out.

It'd have to be a LOT larger.  Since despite the huge loss JP Morgan is going to turn a profit.  Though, if paid through by dividends then the rich wouldn't be getting richer in that case, since there wouldn't be any.  (or much.)

Afterall dividends are paid out from excess profits.



S.T.A.G.E. on 14 June 2012
Mr Puggsly said:
S.T.A.G.E. said:
The rich getting richer is a problem if they fail to create jobs. The rich getting richer creates a massive imbalance of resources and and power. Those who become rich kind of have a duty to give back (through domestic job creation) so the economy can run with fluidity. The people need to make money to spend money to keep the economy running and not being rich need a safety net of funds to fall back on through savings. The w. ealthy run the show in America because of the great imbalance at the expense of the people and its become obvious who congress supports. I guess history repeats itself.

I can't help but think... more jobs would be created if job creators didn't have to put up with so many regulations.

Frankly, I don't have any bitterness towards companies hiring overseas. Those people arguably work harder, you can pay them less, give less benefits, and they're less likely to sue. In America, well you just wait for your employees or customers to sue you. They're always looking for an excuse.

Internal growth is exactly why Germany is becoming one of the most efficient countries during this world crisis. They train their own properly and allow their economy to grow from within to the point where Germany was expected to bailout Greece. Most (excluding companies like VW) don't leave their workers out in the cold so they can profit off of cheaper workers. Personally most German businesses believe they have the best workers in the world, sounds eeriely similar to how the US was when everything was self made after WWII doesn't it? If the top 1% sell out the US when it comes to jobs, then it can be expected that the divide will grow. When a company in the US tries to grow they are quickly bought out and put under so that the larger corporations can grow without much competition. They will grow around us to a staggeringly dangerous point. The way things are going Capitalism will soon evolve into something as the gap between the middle class dwindles and the divide between the rich and poor grows. The US is supposed to be the land of opporunity, for all who enter. You can find good workers anywhere and this is true who work arguably harder for less, but wheres the opportunity domestically? Please....the way this country is going there is no quick fix and the businesses know it. They have to be regulated because they've grown around the country itself. I don't want to even get into their influence on congress. When you see the mentalities of most of the top American businessmen you start to realize their connection to money is on the level of obsessive and though they give back a bit to the community, they don't want to give a good enough portion back to the economy. To put it simply, my grandfather told me the biggest savers have always been the wealthiest. 



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Baalzamon on 14 June 2012
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.



Money can't buy happiness. Just video games, which make me happy.

S.T.A.G.E. on 14 June 2012
Baalzamon said:
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.


Its quite simple, if the income gap stretches further, there will be some sort of vocal backlash within this country and it will cause a forced reformation. Just saying.



Kasz216 on 14 June 2012
Baalzamon said:
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.

You'd actually be surprised.

Economics is a LOT more tightnit and soloperspective then politcs often make it out to be.

There are disenters, like in just about everything, however thise disenters are mostly in the realm of academia far removed from practical application.

It just gets made to look like more of an arguement because "The arguement should suffer because we think such and such is more fair despite it hurting the economy" is a harder sale then "this will help the economy, listen to this guy who's given up what he learned and wrote for so long for his beiefs." (Usually Krugman.)

 

This thread, and the debate on economis is pretty much the same as always.  Would you rather everyone do better, with a few guys doing waaaaaay better then you.... or would you rather everyone do a little worse, but be more equal.

 

Me, i'd take option 1, even if i thought the guys doing "WAAAAAY" better don't deserve it.    Most people however, would pick option 2, as you find in modern game theory.

 

For example, if you set up an expeirment were You give one guy $100 and he can decide how much he wants to give a second party.  If he decides to give them say.... $30, that second party is extremly likely to "Blow it up" and create it so that NOBODY gets any money if given the option.

Outright injuring himself and the first person, just because he didn't get an equal amount.  Such a thing is outright stupid in my opinion.... because well, your costing yourself 30 bucks you didn't have before, because some stranger is getting 70 .

30 bucks is still 30 bucks.

That's not even taking into account any number of factors he may of opted for taking a lions share.  (Poor economic conditions, sick relatives, give to charity, who knows.)



Baalzamon on 14 June 2012
S.T.A.G.E. said:

Its quite simple, if the income gap stretches further, there will be some sort of vocal backlash within this country and it will cause a forced reformation. Just saying.

Forced reformation?  Sorry, but I don't believe it will happen.  The only way to ever fix the income gap from continuing to grow would be to tax the rich much more, and proceed to redistribute this wealth to the "poorer" people.  This ought to go over really well (I'm sure some people would just love it).

The ironic thing is, if you do something like this, many of the people that originally complained in the worst place would be worse off than they currently are (according to economic theory).  But, since all people seem to care about is that it isn't fair that their neighbors make more money than they do, perhaps they would be happy in a society where more wealth is redistributed to the poor.



Money can't buy happiness. Just video games, which make me happy.

Aielyn on 14 June 2012
Baalzamon said:
Forced reformation?  Sorry, but I don't believe it will happen.  The only way to ever fix the income gap from continuing to grow would be to tax the rich much more, and proceed to redistribute this wealth to the "poorer" people.  This ought to go over really well (I'm sure some people would just love it).

The ironic thing is, if you do something like this, many of the people that originally complained in the worst place would be worse off than they currently are (according to economic theory).  But, since all people seem to care about is that it isn't fair that their neighbors make more money than they do, perhaps they would be happy in a society where more wealth is redistributed to the poor.

Why is there always this stupid false dichotomy in people's views? Why is it always "redistribute wealth" and "let the rich get richer" as the only two options?

The world is far more nuanced than that. It is possible to come up with a tax system that has even extreme levels of tax for the very rich, but that actually encourages economic growth and boosts investment. The result ends up being that the rich don't make quite as much money, but they still make loads of it, and everyone else makes significantly more.

What's more, the same types of solution can also solve government debt, without in any way depressing the economy. It has just one caveat - the tax money has to be spent on things that feed back into the economy. It is possible to analyse the net impact on both debt and the economy of anything that the government spends money on. Some of these, such as spending on preventative medicine, actually saves the government money, without negatively impacting the economy. Others, such as infrastructure spending, can actually boost the economy while being a net neutral effect on debt - that is, neither increasing or decreasing either a surplus or deficit relative to not spending the money.

It sounds counterintuitive, but that's because everyone focuses on the idiotic false dichotomy, and insists on simplifying everything down to soundbites. The world is more complicated than that, and it's about time that people stopped treating it like it's so simple. And I aim this comment at people on both sides of the traditional split.