Rich get richer / poor get poorer

[renferme]

The disparity between the rich and poor is growing - at least that's what I read.
What's the solution ?
Do we tax the rich more - those who are entrepreneurs who utimately create jobs?
Do we raise the minimum wage - and perhaps ultimately lose jobs because companies can't pay the higher wages ?
Do we raise taxes on everyone, or mostly everyone and risk recession ?
Do we lower taxes (or keep them low) because people will have more money to
spend and boost the economy ?
Who do we believe - the tax and spend liberals or the conservatives ?

 

[Nords]

The disparity between the rich and poor is growing - at least that's what I read.
What's the solution ?

Although it makes for great sound-bite journalism, I'm not sure there's a problem.

Some people have learned to make money and they keep on making more of it. It's almost as if they're being rewarded for practicing their capitalistic skills.

Other people have learned to not earn money, or at least to spend it faster than they make it, and they don't seem to be able to change their habits. Perhaps they're getting everything they deserve.

Society appears to provide some methods of supporting behavior changes for those who are ready to change. The support could probably be better, but a more cost-effective method would probably be implemented as soon as it's determined. I'd rather have a government providing tax incentives to industry & non-profits (to hire/train motivated employees) than to have to pay more taxes to government programs.

As for the rich, why remove their incentive to keep getting richer? For every money-grubbing SOB like Larry Ellison or Donald Trump there's a Bill Gates, a Warren Buffett, and a Ted Turner. It's hard to believe that those three are turning so philanthropical in their later lives, but the same happened with Carnegie, Morgan, & Rockefeller.

The ends don't justify the means but that's no reason to squash incentive & motivation with socialism... or even communism.

 

[Cut-Throat]

Who do we believe - the tax and spend liberals or the conservatives ?

Here, let me help you with that phrase.

Who do we believe - the tax and spend liberals or the borrow and spend conservatives ?

 

[renferme]

As for the rich, why remove their incentive to keep getting richer? For every money-grubbing SOB like Larry Ellison or Donald Trump there's a Bill Gates, a Warren Buffett, and a Ted Turner. It's hard to believe that those three are turning so philanthropical in their later lives, but the same happened with Carnegie, Morgan, & Rockefeller.

Those money grubbing SOBs, nonetheless, provide mucho jobs for Americans and
their products are used by millions of other Americans. But still nice to hear that some of them are turning philantropical.

When the Democrats take power, will America eventually turn into another Europe and lose our inbred incentives to make money on top of more money?

 

[renferme]

I wonder why the word that I typed "philanthropical" came out as
"philantropical" when my words were posted ?

Borrow and spend ? don't know what you're talking about, ha ha!

 

[wabmester]

Labor Day Report: Working Class Strained by Low Wages, Inequality

The EPI report also argues that the deficit between productivity and worker pay has contributed to the increasing gap between the rich and the poor. The top one percent of Americans controlled almost as much wealth in the year 2000 as their counterparts did in 1929, right before the Great Depression.

The report notes that, adjusting for inflation, between 1979 and 2000 the income of households in the poorest twenty percent grew only 6.4 percent, while the incomes of the richest twenty percent grew 70 percent. The richest one percent of households saw their earnings increase 184 percent.

So, the last time this happened was the Great Depression, and we fixed it with a massive redistribution of wealth via taxation and new social programs.

 

[renferme]

Wab,
We really didn't fix anything with new social programs; WWII fixed the depression.
The New Deal fixed nothing.

 

[wabmester]

Gotcha. So, the answer is to have WW3. Frankly, if we end up with high unemployment, I'd prefer programs that build our infrastructure. They both result in higher taxation and high employment, but one is less messy than the other.

 

[Martha]

The New Deal programs fixed a lot.

Many jobs programs put people to work.

Social Security was established.
The Fair Labor Standards Act, abolishing child labor and establishing a minimum wage was established.
The 1933 Securities Act to help control securities fraud was enacted.
The FDIC was formed, bringing back confidence in banks.

Wonderful programs.

This time around I suggest national healthcare and a raise in minimum wage.

Most people on this board are very successful. I often think of how fortunate I am. Not everyone can get the good paying jobs. Many people work hard for not a lot of money. They are not getting ahead.

 

[renferme]

Gotcha. So, the answer is to have WW3. Frankly, if we end up with high unemployment, I'd prefer programs that build our infrastructure. They both result in higher taxation and high employment, but one is less messy than the other.

Hey smart-aleck: WW3 certainly not and hope you don't believe that's what I was inferring.
.
Higher taxation does not translate into higher employment.
.
There were some New Deal programs that one could agrue as being productive.
But, WWII is what really got us out of the depression and there is no doubt about that.

 

[farmerEd]

>>Higher taxation does not translate into higher employment.

And as we have seen with the Bush administration policies, lower taxes also does not contribute to higher employment.

 

[wabmester]

But, WWII is what really got us out of the depression and there is no doubt about that.

Isn't a war a massive social program that artifically stimulates employment and the economy?   I guess I don't understand why you make the distinction.   How did we pay for the war?    IIRC, marginal tax rates were at an all-time low before the Great Depression, and they went to an all-time high after.

We've probably had enough gloom and doom predictions on this board to understand one possible outcome of our economic disparity and current low tax situation.    We have a structural deficit.   We have artifically stimulated the economy via tax cuts and deficit spending.   We have consumers who were spending more than they were earning by taking out HELOCs.

So, what happens when the artificial tax and spend stimulus winds down?   What happens when the equity boom reverses?   I honestly don't know, but IF we're left with a consumer base who can't afford to consume, one possible outcome is much slower economic growth and much higher unemployment.

So, what is the best fix if we end up with low taxes, low consumption due to wealth disparity, a structural deficit, a slow economy, and high unemployment?

 

[LOL!]

What if NY opened a housing project in northwest Iowa? Or paid for a poor family to move into a remote lower middle class neighborhood? Wait a minute ... isn't this what happened with folks who left New Orleans? Let's see what happens.

 

[Leonidas]

Labor Day Report: Working Class Strained by Low Wages, Inequality

The EPI and The NewStandard make for interesting Googling. A more biased pairing would have been difficult to find.

 

[uncledrz]

Here, let me help you with that phrase.

Who do we believe - the tax and spend liberals or the borrow and spend conservatives ?

Sorry CT, but you were too kind. It should be "borrow and spend more". Tax policy needs to be fair, but whatever it is, outflow must equal inflow. Something neither party seems to understand.

 

[d]

it is interesting to note that the % income going to the top 10% in the U.S. is about the same as China; a tad less than the average of all countries, and below that of Mexico, Russia and Uzbekistan.

 

[retire@40]

It's more like the smart get richer and the dumb get poorer.

Good and bad luck factors in the equation sometimes, but for the most part, smart people create their own luck while dumb people create their own misery.

 

[Gumby]

This data from the census would tend to bear that out.

http://pubdb3.census.gov/macro/032006/perinc/new03_028.htm

It is amazing to see precisely what you would expect -- if you want to make more money, stay in school.

 

[fluffy]

I also think education (or lack of it) is by far the biggest reason for the income disparity and the question should be not how we can make the rich and the poor earn the same, but how we can improve the education of everyone. "Education" should include financial education as well, starting at grade school.

But even forgetting about the lack financial education specifically, American 1-12 grade education system is plain horrible. I grew up in another country and moved to US prior to high school and the difference in education level and quality, especially in math and sciences area, is stunning. American universities are top notch, but the majority of kids' brains are already butchered by the time they get to college age. Surprisingly (to me), the same terrible system somehow produces (or perhaps fails to destroy) the occasional brilliant mind, but there's no quiestion that it definitely does not work for an average kid.

I don't know of any easy solution to improve grades 1-12 education but that's what should be the focus of any effort to better the economic standing of the middle and lower class, not whether to tax the rich more or less. And by the way, improving public education should not need any more money to get better -- it's a matter of spending the money it has already more effectively.

IMO, the simplest and most important step is to dramatically speed up the pace at which curriculum is covered, especially in math/sciences area. Algebra, for example, probably should be taught by grades 7-8, not 11-12...  Anyway, fixing the education system deserves a few threads of its own

 

[2B]

Here, let me help you with that phrase.

Who do we believe - the tax and spend liberals or the borrow and spend conservatives ?

Unfortunately, it's borrow and spend everybody.  The dems and repubs had not differentiated themselves in this area if the real data is used.

 

[Nords]

But even forgetting about the lack financial education specifically, American 1-12 grade education system is plain horrible.

Well, let's turn this question around.

What countries have the world's best education systems?

 

[2B]

The New Deal programs fixed a lot.

Many jobs programs put people to work.

Social Security was established.
The Fair Labor Standards Act, abolishing child labor and establishing a minimum wage was established.
The 1933 Securities Act to help control securities fraud was enacted.
The FDIC was formed, bringing back confidence in banks.

Wonderful programs. 

This time around I suggest national healthcare and a raise in minimum wage. 

Most people on this board are very successful.  I often think of how fortunate I am.  Not everyone can get the good paying jobs.  Many people work hard for not a lot of money.  They are not getting ahead. 

The New Deal brought many nice sounding programs.  Some were needed, some did nothing and some were time bombs.  You left lots of FDR's legacy out -- both good and bad.  The "high point" of FDR's administration was increases the taxation of the surviving companies which crushed any expansion in the private sector.

There are many opportunties to "fix" the system but there isn't a push by either side to do much in the way of meaningful change.

 

[fluffy]

Well, let's turn this question around.

What countries have the world's best education systems?

I'm partial to Russian but taking any of the top countries in math/science would make sense to me. There are a number of studies that compare different countries. For example, http://news.bbc.co.uk/1/hi/education/4073753.stm

 

[Nords]

I'm partial to Russian but taking any of the top countries in math/science would make sense to me. There are a number of studies that compare different countries. For example, http://news.bbc.co.uk/1/hi/education/4073753.stm

Sure, and now look at the country's level of GDP, per-capita "wealth", or other world power criteria.

Don't get me wrong, I think there's plenty of room for improvement in American school systems. I just don't think other countries are any closer to the answers than we are. I have a hard time believing that enterpreneurial Americans wouldn't instantly plagiarize adopt the world's best education systems if they really did lead to better graduates. Rote memorization may lead to high test scores but about the only other thing it guarantees is an overwhelming sense of overconfidence during a military academy's plebe year.

Testing for knowledge is pretty straightforward. Mensa to the contrary, testing for thinking & analysis appears to be a little more difficult.

I also remember what I did to those high school surveys & exams. If they couldn't directly relate to a personal benefit (money or the college of my choice) then I'd be more likely to amuse my teen personality at their expense. They were almost as much fun as the sex/drugs/alcohol surveys.

 

[bpp]

I agree with fluffy, the US primary and secondary education system is much worse than it needs to be.  Don't know what the solution is, but surely US kids could be challenged much more than they are now.  My recollection of elementary school was that it amounted to little more than baby-sitting and story-telling -- and then in high school they spend a lot of time explaining, "oh by the way, those stories we told you in elementary school were mostly wrong."  Huge waste of time.

As one concrete example, British kids learn how to manipulate matrices in junior high school, for the O Levels (or whatever the equivalent is called today).  American kids don't get to that until college!  (If ever.)  Just no excuse.