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Income Inequality is Good for the Economy

Discussion in 'Sports and News' started by YankeeFan, May 2, 2012.

  1. 93Devil

    93Devil Well-Known Member

    Income inequity worked great in the south up until the late 1800s.
     
  2. YankeeFan

    YankeeFan Well-Known Member

    I'm sure the people who really hate income inequality never buy goods made in China.
     
  3. 93Devil

    93Devil Well-Known Member

    I would have no problem paying an extra $5 or $10 for my shoes if they were made in America.
     
  4. J Staley

    J Staley Member

    Because it's easy to find a broad selection of American-made products at any retailer.
     
  5. YankeeFan

    YankeeFan Well-Known Member

    How about for your shirts and pants, and your kids toys, your TV, DVR, laptop, etc. ?
     
  6. YankeeFan

    YankeeFan Well-Known Member

    Supply and demand my friend. If there was a big demand for American made products -- to the degree that people would pay more for them -- there would be plenty of supply.

    The marketplace has spoken. We want cheap consumer goods. And, that includes you, and Devil, and everybody else.
     
  7. Mark2010

    Mark2010 Active Member

    Oh well. I'm in favor of a salary cap. If it works in the NFL, why not on Wall Street, too? Yeah, I'm just a socialist at heart.
     
  8. amraeder

    amraeder Well-Known Member

    Income inequality in and of itself isn't a natural evil, in fact, it's probably good to some extent for the economy. But it's all about degrees. How much inequality is good, and how much becomes too much. In America today, we're probably in the too much category. It's good for the economy to have the money to make investments and support startups, provide loans and lubricate the wheels of the economy. BUT that doesn't mean that just because some inequality is good, more is better.
    Like everything, there's diminishing returns and tradeoffs. As wealth becomes more concentrated in the hands of the wealthy, there's less in the hands of the people who actually use it to buy goods. This decreases the demand for said goods, and hurts the economy. At the extreme, if 1 man controlls all the wealth, it doesn't matter what he invests in, because no one else can afford to buy it. So, while there's benefit in some income inequality, there's also harm in extreme inequality.
    The question then becomes, where is the optimal level? I have no clue. I have a hunch I'd need a PHD in economics to begin answering that question.
    I just wanted to point out that this article seems to miss the point (though it was long and I started skimming, so correct me if I missed it). It's not a question of if investment is good, it's a question of the optimal level of inequality.
    (That isn't to say that government should make wealth redistribution its job. The question of that being right or wrong is a different topic entirely, and not one I'll comment on here.)
     
  9. YGBFKM

    YGBFKM Guest

    It's wrong.
     
  10. YankeeFan

    YankeeFan Well-Known Member

    OK, how much is too much?

    And what economies are doing well?

    Is China's economy "doing well"? How's their "wealth inequality"?
     
  11. amraeder

    amraeder Well-Known Member

    That's the million dollar question. And as I said, I don't know. We can research it and try to find out. I'm just trying to say income inequality isn't all great or all bad, it's worth and harm changes based on how inequitable a society is.

    As far as China goes, the question isn't does China have great inequality than the US, and is its economy stronger/less strong than the US. The question is, would China's economy be stronger/weaker with a more equitable distribution of wealth?
     
  12. JR

    JR Well-Known Member

    Ah, the Invisible Hand at work.

    And the corollary is, "There's no such thing as a free lunch" because cheap goods cost jobs along with the attendant problems

    Your five dollar shirt cost a lot more in terms of pressure on the social safety net than the five dollars you saved. Not to mention that the five dollar shirt is probably a piece of crap compared to a ten dollar one
     
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