4 ms·
> People aren't asking for "income equality" they are asking for some level of humanity and democracy to be restored to our version of Capitalism, to strengthen
by Pyxl101 11y ago
> People aren't asking for "income equality" they are asking for some level of humanity and democracy to be restored to our version of Capitalism, to strengthen that capitalism.
That phrase could mean anything in practice that anyone wants it to mean. If we're going to discuss these things, we should be specific. What specific policy is desired, and how is it going to help? "Humanity" and "democracy" are not economic policies, nor are they specific enough goals to design policies around.
I am unsure whether economic equality is a goal that we should strive toward. I wonder if a better measure for our economy would be how well off people are at each place in the distribution. Almost all middle class people in America today still have really nice TVs, mobile phones, Internet, etc., which suggests that their standard of living is quite good in absolute terms. We should be looking at absolute terms, not relative terms.
Taxing the wealthy has undesirable effects. It's not as if wealthy people take their money and put it under their mattress. No, they invest it. That investment money flows to other corporations who then spend it on goods and services, or spend it on their employees. All of the wealth that the rich accumulate makes its way back into the economy, except it's at the direction of the rich according to their investment decisions. The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs.
That's certainly valuable, and I believe it makes sense for the government to have tax revenue to spend on its programs, but I don't necessarily think that more revenue for more programs will lead to better results. I'd rather that we spend substantially less on wars, for example, and redirect that money into infrastructure for our own country.
Take the F-35 development program - the government has basically thrown over a trillion dollars down the drain (I'm being hyperbolic, but it's really pretty bad). A trillion dollars!! The government would have plenty of tax revenue to spend on smart infrastructure investments if it stopped throwing money away on programs like that.
I'd hazard a guess that wealthy investors through their investments are more effective at creating wealth and raising the standard of living in the country than the government is (on a marginal basis from where we are today). Investors are far better at examining where their money goes, what effect it has, and doubling down on investments that demonstrate promising results, and pulling the plug on pointless ones. The government by comparison keeps burning more and more money on programs that are clearly ineffective - examine the Healthcare.gov or F-35 boondoggles. Private investors do better. Let them keep their money to invest it smartly.
- owyn 11y agoIt's not as if wealthy people take their money and put it under their mattress. No, they invest it. That investment money flows to other corporations who then spend it on goods and services, or spend it on their employees. No they don't. From what I've read (Piketty etc) they do not re-circulate it into the general economy. They use investment vehicles which are increasingly divorced from "real world" economics and more like moving chips around on a poker table. It's wealth in the service of wealth creation. All of that happens in an almost separate level of the economy. No poor or middle class person is even involved. I'd "hazard a guess" that wealthy investors might be more effective at creating more wealth, but not at raising the standard of living of the countries they are in. In fact, the standard of living in the United States is declining. Approximately 100% of the money that poor and middle class people spend goes to corporations. If you give them money, they spend it on goods and services. That's pretty efficient. The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs. Is that the only alternative? At this point, probably. I don't trust the government either, it's a bloated plutocracy. But you could still make a completely economic/utility theory argument that the benefit to 100M+ people outweighs the overall good for the 1K+ people at the top of the current hierarchy.
- Pyxl101 11y ago> They use investment vehicles which are increasingly divorced from "real world" economics and more like moving chips around on a poker table. Which investment vehicles are those? You cannot in general invest money into vehicles which earn a good return but which are divorced from the real world. Imagine if you invest in a company like Apple. Apple developed products like the iPod and iPhone, and the company's value comes from the fact that 500 million people gave their money to Apple in exchange for an iPhone. Apple's $233 billion dollar revenue, and resulting net income, leads to their valuation, which leads to the return on our hypothetical investment. The investment profits because Apple developed a useful product that people chose to spend money on - the people who bought the products benefited, and the investor benefited from a return. Everyone is better off, and the standard of living has risen. Technology makes things cheaper over time, so that more people can afford such devices. A vast majority of people living in poverty in America own cell phones. Can you describe how these investment vehicles work such that they're earning a return while being disconnected from the real world? Where does the money come from for the returns?