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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.
Original Submission
(Score: 2) by Mr Big in the Pants on Saturday June 20 2015, @07:59PM
If you think the fact that you DID produce is relevant you are missing the point.
CHURN is what keeps an economy going, not historic production. The problem is the amount of wealth that is tied up this way, not that it exists.
I could just as easily say:
The only reason you have a place to put your investment to earn interest is that there are people with enough spending money to purchase the shit that place produces or other associated support industries.
And again we come back to inequality == bad!
It is not rocket science...
(Score: 0) by Anonymous Coward on Sunday June 21 2015, @01:45PM
So you two would rather I not invest the money I earned over my career, because according to you, investors are leeches.
So what do you want me to do with my earnings?
A. Spend them right away, on crap I don't need, so that I can be dependent on government benevolence in my old age? (How's that working out in Greece, BTW?)
B. Men with guns will force me to part with my money. In which case why did I bother to earn it in the first place?
You have to think about the incentives created by your success-hating proposals.
Oh and meanwhile where are the employers of the world going to get the money to buy trucks, lay railroad tracks, build factories and office spaces, and so on... everything you don't bring to the table when you demand a job because you have a right to employment because you breathe?
I suppose the government will provide that too.
So the choices are:
A. I earn money by producing, invest it so you can produce too, and we both gain.
B. I earn money. Men with guns take it. They use it to create infrastructure. You work there. They take your earnings too. Soon we both grow old and have to hope the men with guns haven't squandered all that money they took from us. (Hint: they have, sure as the sun shines.)
(Score: 2) by Mr Big in the Pants on Monday June 22 2015, @03:25AM
You have made your argument increasing both personal and anecdotal and with this post have reached 100% irrelevant and off topic.
This has nothing to do with the money you currently have. Spend it however you will.
This discussion is fruitless and thus I am moving on...