income equality

Discussion in 'Too Hot for Swamp Gas' started by rivergator, Sep 10, 2013.

  1. QGator2414
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    I agree with a lot of this but I as addressing this from a slightly different angle. And yes this whole picture is vastly to complex for a thread on gatorcountry discussing one part of it.

    Once people have to be responsible a whole knew mindset will be created. It is my contention the government does not desire that as Washington craves power and the want to be important. Therefore we have created a system of dependence.

    I was at my kindergarteners parent volunteer meeting the other day. The principal is a very nice lady that is good at what she does and leads an elementary school ranked number 3 in the stateof Florida for whatever that is worth. But she got up and started off her talk with a joking statement that I will paraphrase...basically she said that it is important we teach and raise our kids to be able to perform productive jobs in the future (sounds great). Then she follows it with I need them so I can get my SS. I was probably the only one with steam coming off my head and I do not think a many if any understood what she just said. But there is one thing for sure. People want their check whether even if it is on the backs of another. And yes I get that the principal has had her income redistributed to the generations before her...

    The child tax credit can create a lifestyle of dependence. Especially for those who are poorer...
  2. mdgator05
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    Agreed with much of this. Increasing the savings rate would certainly keep more money in the hands of the middle class, as consumption tends to go into firm profits, which tend to go to those with resources to extract firm profits.

    There are two problems though in the implementation of such a policy:

    1. As wages go down, as they are and are likely to continue over the long-term (we might see short-term increases but that long-term trend is that wages will decline relative to capital), it will take a cut in consumption even greater than we think today.

    2. A decrease in consumption will hold back economic growth, which will have major psychological effects on firms (who might overreact), markets, governments, and individuals. It is never in the firm, market, or government interest (in the short-term) to cut consumption, so they will do everything they can to fight this, possibly with an understanding from consumers that each of these groups can hurt individuals economically (possibly by more than the saving rate helps people).
  3. malligator
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    malligator Well-Known Member

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    I'm not convinced comsumption would go down. It might short term while people are repairing their financial health, but I know that with what I make if my only bills were housing, utilities, food, and fuel my consumption would go up. Financial institutions that make a killing on consumer loan interest would certainly take a hit, though.
  4. mdgator05
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    Agreed that in the long-term, consumption might not decrease. That is an ambiguous relationship that I don't have the expertise to discuss. In the short-term, it would almost by definition have to go down. And unfortunately, incentive systems are setup for the short-term right now. How to break that fact is an interesting and challenging question that I really don't know if I have a good answer.
  5. HallGator
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    This may be one of the more overlooked aspects of automation. In many ways it is good and in other ways it is far from good. As we eliminate more and more jobs if there is not some other form of jobs, on a fairly equal basis, to take their place then we are going to be in trouble. Less jobs mean more people vying for the ones that are available and this in turn can drive down pay. Anyone who was in the trades business can verify this from experience in what happened during the housing downturn. Although this wasn't caused from automation it gives a good example of how jobs shortages can suppress the wage market in a hurry.
  6. LittleBlueLW
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    Thanks for the answer but why would you use Somalia as an example of what to do about income inequality in America when there is little to no comparison between the people, government or economies?
  7. mdgator05
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    I was using it as an example of a lack of stability to show why the rich in this country have it in their best interests to maintain stability in the US, even at fairly large cost to them. Particularly high income distribution countries tend to be less stable.
  8. LittleBlueLW
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    Understood.

    So in addition to creating jobs and paying the majority of taxes, the rich are also responsible for the stability of the country as a whole. Thats an awful lot of responsibility. They should probably be willing to take a pay cut nonetheless!
  9. DeanMeadGator
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    As long ago as the days of the Old Testament, some were rich and some were poor.

    This is not a perfect world. Any attempt to make it perfect is doomed to fail. Some people have more and some have less. So it will always be.

    The attempt to make everything the same in anything is to pursue an impossible dream. To take from the successful in order to equally distribute to others is a venture that will result in class warfare.
  10. QGator2414
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    Well stated.

    The problem is we think we are owed a certain standard of living.

    I still would love to hear rivers answer as to why a person working their tail off with no kids or the rich person should be helping send river a check for $1K for each kid.

    IMO it has to do with the mindset that we as Americans are better than others and owed this "middle class" lifestyle we have defined for ourselves. I am not trying to pick on river either as I think most Americans have this mindset. But since my discussion has been with river I would really like to hear an answer.
  11. HallGator
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    It's not necessarily "owed," but rather an expectation that if you work hard you can move up the scale in pay. This is not always the case if the good paying jobs are not there.
  12. mdgator05
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    First, I always recoil at the idea of "job creation." Jobs are created by the market opportunities. At best, rich people act as a middle man for jobs because labor is the cheapest way to exploit an inherent demand that the rich person wants to exploit (not using the word with a negative connotation).

    Second, the gains to being a rich person are increasing. That makes the stability of the system more valuable to them. And yes, we do tend to pay more for things that are more valuable.
  13. QGator2414
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    I wish I could agree with you. But the evidence says otherwise. Just look at what government has done with SS (Look at rivers thoughts about deserving a $1K check on e backs of people without kids). Yes people expect to get their check because they paid in. The problem is they will not sacrifice when provided the facts that they were promised more than they paid for. The entitlement I am owed a certain standard of living mentality is alive and well and it is certainly one of the most bipartisan things out there unfortunately.
  14. mdgator05
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    In more recent times than the Old Testament, the Industrial Revolution increased the value of labor, leading to unprecedented income mobility. The people in the Old Testament stayed in the same economic condition in which they were born. If you were a noble or a rich merchant, you stayed a noble or rich merchant. If you were a craftsman, you stayed a craftsman. If you were a destitute agricultural worker, you stayed a destitute agricultural worker.

    The industrial revolution, the accompanying education system, and the end of nobility as a landed gentry that controlled economic activity resulted in huge amounts of economic mobility.

    The technology revolution, in which we have automated more and more functions, have lowered the importance of labor, decreasing wages. The current financial system, in which you need resources to receive benefits from capital improvements, has ensured that those with preexisting capital gain more wealth, while those with less capital have more trouble accumulating the type of capital needed to cash in on firm profits.

    Maybe that is just the new natural order, where social mobility diminishes back to historic norms. However, most of us come from the perspective of the Industrial Revolution that economic mobility is a good thing, as it improves creativity and innovation.
  15. HallGator
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    You and I are talking about two different expectations. How many times on here has someone said that people need to work hard to improve their lot in life? I'm not talking about SS, welfare, phones, or the like. I am talking about working hard and by the hard work having expectations of an improved life. Isn't this what most of us are taught from childhood?
  16. wgbgator
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    wgbgator Sub-optimal Poster Premium Member

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    Just curious, since you're harping on the "checks for kids" thing, should someone with no kids pay taxes for public schools or universities? Or healthcare for needy children?
  17. QGator2414
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    I agree with that. But our government has created a completely different mindset IMO. While many certainly want to be treated with respect and reap the rewards of life and freedom that is not the way we act.

    So why should Someone who is working their tail off be expected to send river a check for $1K per child? Is that an expectation one should have bestowed upon them? Why should my kindergarteners principal have the expectation that my daughter be successful so she can be sure to receive her SS check at my daughters expense? Is that the expectation we should bestow upon our kids?

    How are we improving those people's lives when punishing them when they work hard?
  18. QGator2414
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    Apples and Oranges (receiving a check just for having a kid is not the same thing as education). But for the most part no they should not. While I think an argument can be made from the state and local level that it is for the benefit of the state to tax for these things it certainly should not be the responsibility of someone without kids to support the glorified daycare system we have created.

    I would require parents to pay tuition and/or volunteer their time at the school their child attends. Of course this will never happen with the DOE implanted well beyond its purpose and as we prefer to promote irresponsible actions and sadly many get caught in the state of dependence thanks to that.
  19. wgbgator
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    wgbgator Sub-optimal Poster Premium Member

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    A little wishy-washy, but to a certain extent, you seem to see some need for people to provide opportunity and support where they may derive no direct benefit to themselves.
  20. gatorjd95
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    The entire left-leaning argument here can be easily summed up - "from each according to their abilities; to each according to their needs." Seems like we've seen how that turned out and income equality wasn't part of it.

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