3 ms·

What incentive is there to work to create wealth if an interest-based system is rigged towards the already-wealthy?

by _1tem 1y ago

WalterBright 1y ago
Creating wealth for yourself is what matters. Other people having more than you is irrelevant.
- deleted 1y ago
  [deleted]
- _1tem 1y ago
  The wealthy have no incentive to invest their money in productive enterprises if it is sufficiently profitable to sit on it and earn interest. Similarly, people who would otherwise work hard at productive enterprises are discouraged by seeing how easy it is for the wealthy to simply do nothing and get richer. And the result you have is: the modern American economy, where most efforts go into derivative financial products and investing, rather than actual productive enterprise. Day-to-day goods and services get worse and more expensive while the stock market keeps going up.
  - WalterBright 1y ago
    Earning mere interest is a poor rate of return, and the taxes paid on the interest make it worse than useless. Wealthy people want larger returns, and that's why they invest in companies. > where most efforts go into derivative financial products No evidence for "most". > and investing Yes, investing in productive enterprises. Who do you think invested in Microsoft, Google, Amazon, Nvidia, Apple, etc?
    - _1tem 1y ago
      > Earning mere interest is a poor rate of return You're looking at just the APY on savings accounts. Actually the rich make far more than that on interest-derived financial products through various forms of rent-seeking. Interest is the hidden tax baked into every transaction. Some studies found interest accounts for roughly half of end-user prices—12 percent on garbage collection, up to 77 percent on public housing.[1] And as Musk warns: “If we don’t act, the entire government budget will be used just to pay interest — there won’t be money for anything. No, there won’t be money for Social Security, no Medicare, nothing. That’s where we’re headed.” [2] In the late-stage capitalist West, most public and private money goes to servicing interest at some point in the food chain. [1] https://base.socioeco.org/docs/margrit_kennedy.pdf https://base.socioeco.org/docs/margrit_kennedy.pdf [2] https://economictimes.indiatimes.com/news/international/us/elon-musk-rings-alarm-bells-says-the-u-s-is-going-bankrupt-and-urges-immediate-action-else-the-dollars-going-to-be-worth-nothing/articleshow/116719516.cms https://economictimes.indiatimes.com/news/international/us/e...
      - WalterBright 1y ago
        > Actually the rich make far more than that on interest-derived financial products through various forms of rent-seeking. The US would not be the wealthiest country in the world if its wealth was acquired through rent seeking.

What incentive is there to work to create wealth if an interest-based system is rigged towards the already-wealthy?

by _1tem 1y ago

What incentive is there to work to create wealth if an interest-based system is rigged towards the already-wealthy?

WalterBright 1y ago

Creating wealth for yourself is what matters. Other people having more than you is irrelevant.

deleted 1y ago
[deleted]
_1tem 1y ago
The wealthy have no incentive to invest their money in productive enterprises if it is sufficiently profitable to sit on it and earn interest. Similarly, people who would otherwise work hard at productive enterprises are discouraged by seeing how easy it is for the wealthy to simply do nothing and get richer. And the result you have is: the modern American economy, where most efforts go into derivative financial products and investing, rather than actual productive enterprise. Day-to-day goods and services get worse and more expensive while the stock market keeps going up.
- WalterBright 1y ago
  Earning mere interest is a poor rate of return, and the taxes paid on the interest make it worse than useless. Wealthy people want larger returns, and that's why they invest in companies. > where most efforts go into derivative financial products No evidence for "most". > and investing Yes, investing in productive enterprises. Who do you think invested in Microsoft, Google, Amazon, Nvidia, Apple, etc?
  - _1tem 1y ago
    > Earning mere interest is a poor rate of return You're looking at just the APY on savings accounts. Actually the rich make far more than that on interest-derived financial products through various forms of rent-seeking. Interest is the hidden tax baked into every transaction. Some studies found interest accounts for roughly half of end-user prices—12 percent on garbage collection, up to 77 percent on public housing.[1] And as Musk warns: “If we don’t act, the entire government budget will be used just to pay interest — there won’t be money for anything. No, there won’t be money for Social Security, no Medicare, nothing. That’s where we’re headed.” [2] In the late-stage capitalist West, most public and private money goes to servicing interest at some point in the food chain. [1] https://base.socioeco.org/docs/margrit_kennedy.pdf https://base.socioeco.org/docs/margrit_kennedy.pdf [2] https://economictimes.indiatimes.com/news/international/us/elon-musk-rings-alarm-bells-says-the-u-s-is-going-bankrupt-and-urges-immediate-action-else-the-dollars-going-to-be-worth-nothing/articleshow/116719516.cms https://economictimes.indiatimes.com/news/international/us/e...
    - WalterBright 1y ago
      > Actually the rich make far more than that on interest-derived financial products through various forms of rent-seeking. The US would not be the wealthiest country in the world if its wealth was acquired through rent seeking.