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posted by cmn32480 on Friday June 19 2015, @11:27AM   Printer-friendly
from the spread-the-money-around dept.

A new study (abstract and free PDF available) authored by several economists at the IMF (International Monetary Fund) reveal an inverse relation between increases in inequality and GDP growth. In what could also be considered a heavy blow to trickle-down economic theory, data analyses show (page 7) that increases of income share on the fifth quintile actually hurt growth, while increases in any other quintile favours growth with the lowest quintile showing the strongest push.

From the abstract:

We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.


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  • (Score: 3, Insightful) by RedBear on Friday June 19 2015, @11:55PM

    by RedBear (1734) on Friday June 19 2015, @11:55PM (#198497)

    Government confiscation of inheritance is immoral. The simple fact is in a free society inequality will always exist. Those that advocate the use of force to tip the scales are the advocates of tyranny.

    It's funny to me that conservatives are always screaming that doing anything involving money to help the lower classes is immoral and will somehow make people soulless and helpless, unable to "lift themselves up by their bootstraps" to become prosperous on their own. But then those same exact conservatives turn right around and demand that the government stay out of it when they want to hand down millions or billions of dollars in totally unearned money to their own precious offspring. The hypocrisy in this is extraordinary. If conservatives really believed that people should be forced to become prosperous on their own under all possible circumstances there would be no provision for inheritance in the law. In fact it would be banned, and income left by the deceased would simply be redistributed randomly into the economy.

    An economy is an engine, and just like any engine it requires some form of regulation to keep itself chugging along without either dying or exploding. There is absolutely nothing immoral about the state doing what is necessary to keep the economy stable. One of those necessary things is keeping inequality from reaching levels that will trigger economic collapse and revolution. Seems to me that it is extremely immoral to support the idea that rampant, uncontrolled inequality is something we should allow to occur.

    It occurred to me quite a few years ago now that this so-called "free society" that the new conservatives keep harping about is really more accurately known by another name: Total anarchy. Stateless, might-makes-right anarchy. Well, anarchy never seems to work very well, and tyranny is pretty awful, but those are NOT our only choices. The idea that we can't possibly do anything to reign in rapidly increasing inequality without falling completely into tyranny is utter nonsense, and very damaging to all citizens of our nation. Both rich and poor. It's been shown over and over again that the rich will be even richer if inequality is kept low and the lower classes have some disposable income to spread around and help lubricate the economic gears.

    --
    ¯\_ʕ◔.◔ʔ_/¯ LOL. I dunno. I'm just a bear.
    ... Peace out. Got bear stuff to do. 彡ʕ⌐■.■ʔ
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