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Wouldn't this only be true if money can't be created? Although you may not be able to get access to a certain person's wealth you can make your own wealth by sa

Wouldn't this only be true if money can't be created? Although you may not be able to get access to a certain person's wealth you can make your own wealth by say starting a business or working hard at your job (assuming that the markets are actually working properly)

danaris 7y ago
You and I can create value, but we can't (legally) create money. The government does that. If the very wealthy are able to take money out of the system faster than the government puts it in, we end up with the pool of money the rest of us have access to shrinking. And to be clear, when I say "access to," I don't mean that we should have the ability to just spend someone else's money. I mean that while they hold that money, and do not spend it, as far as the entire rest of the country/society/system is concerned, it does not exist. The effective pool of dollars is smaller.
- CDSlice 7y ago
  But doesn't that just make the value of the dollars left higher? If there is more value being created but less dollars to pay for it worth the value of a dollar should go up until the out of circulation dollars come back.
  - danaris 7y ago
    By some theories, yes, it should. I don't know if the reason it doesn't is that a) I'm wrong b) Something else is artificially holding the value of the dollar up c) Those theories are wrong, or d) It just hasn't been long enough yet.
  - bsanr2 7y ago
    Yes, without outside influence. That's called deflation, which many consider bad because it incentivizes saving over using money, slowing the economy. We would have seen that after the crash in 07/08, but the federal government stepped in to inject cash into the economy. Should we have done that? Sure, we saw during the Great Depression what happens when you don't. But the way we did it was obviously regressive: instead of forcing some of the existing money supply, the out-of-play portion we've been talking about, back into the economy via a wealth tax, we did a bunch of things that essentially routed "new" money through the major banks (so they wouldn't fail).

danaris 7y ago

You and I can create value, but we can't (legally) create money. The government does that. If the very wealthy are able to take money out of the system faster than the government puts it in, we end up with the pool of money the rest of us have access to shrinking. And to be clear, when I say "access to," I don't mean that we should have the ability to just spend someone else's money. I mean that while they hold that money, and do not spend it, as far as the entire rest of the country/society/system is concerned, it does not exist. The effective pool of dollars is smaller.

CDSlice 7y ago
But doesn't that just make the value of the dollars left higher? If there is more value being created but less dollars to pay for it worth the value of a dollar should go up until the out of circulation dollars come back.
- danaris 7y ago
  By some theories, yes, it should. I don't know if the reason it doesn't is that a) I'm wrong b) Something else is artificially holding the value of the dollar up c) Those theories are wrong, or d) It just hasn't been long enough yet.
- bsanr2 7y ago
  Yes, without outside influence. That's called deflation, which many consider bad because it incentivizes saving over using money, slowing the economy. We would have seen that after the crash in 07/08, but the federal government stepped in to inject cash into the economy. Should we have done that? Sure, we saw during the Great Depression what happens when you don't. But the way we did it was obviously regressive: instead of forcing some of the existing money supply, the out-of-play portion we've been talking about, back into the economy via a wealth tax, we did a bunch of things that essentially routed "new" money through the major banks (so they wouldn't fail).