Wealth distribution

[a completely inoffensive name]

Also all this talk about the "rich" and yet nary a peep about the shit debt the "99"% has racked up "keeping up with Jones". Piss poor credit, houses too big, too many cars, and yet it's the "rich" peoples fault

I subscribe to the notion that individuals are not perfectly rational actors and that when a bank tells an individual they qualify for a loan, the individual will take such an evaluation at face value because they will not go through the logic and uncover for themselves that the banks want them to miss payments so they can charge exorbitant fees and interest rates.

Likewise, I do feel as if we must also accept the consequences of this idea when it comes to the "elite", the bankers and CEOs and such who gave out/authorized these high risk loans. However, since it has been proven that their culpability does not end in ignorance but in willful fraud of the legal system, I think GC has a point that we may point the finger at them as being at the very least, subject to more moral and legal scrutiny than the average citizen.

Keeping up with the jones has fueled the american economy for decades, you cant blame people for doing what their parents and grandparents did because they took their non-finance background and did not look into the business model of handing out predatory loans.

[Husar]

There is also a psychological component because in a huge corporation decisions are often made not by a single person but by several people.
As with accidents, the more people have to make a decision, the more likely each one is to think that the others are as or even more responsible than they are. And if the others agree then it can't be so bad and what not. (with accidents it is so that people are less likely to help the more people are around because they think the others can help, not exactly the same but similar)

Counter to this one also has to remember that most really rich people have some kind of education that a lot of factory workers do not have. They can calculate financial deals or even get a good feeling for the numbers right away. They also know better about the consequences of what they are doing and so on. Blaming the poor guys for not having the same education is not fair if getting that education costs more per month than a poor guy earns in a year...

[Fisherking]

You guys are missing an important point.

Our money system is based on debt creation. Banks make their money from lending. The fractional reserve system allows the creation of money based on that debt.

It makes no difference if it is the government borrowing the money or the family buying a house or just taking a cash advance from their credit card.

Money is not based on any real assets. There is no gold or silver involved as in the past.

Banking interests loan you what they don’t have to pay for real things. Then when you default they are covered by insurance of the loan but also get to take the real assets and resell them, usually creating more debt.

Convincing some poor sod to go into debt just makes them wealthier. You put the focus on individuals. What about what our brilliant governments owe.

[Husar]

You guys are missing an important point.

Our money system is based on debt creation. Banks make their money from lending. The fractional reserve system allows the creation of money based on that debt.

It makes no difference if it is the government borrowing the money or the family buying a house or just taking a cash advance from their credit card.

Money is not based on any real assets. There is no gold or silver involved as in the past.

Banking interests loan you what they don’t have to pay for real things. Then when you default they are covered by insurance of the loan but also get to take the real assets and resell them, usually creating more debt.

Convincing some poor sod to go into debt just makes them wealthier. You put the focus on individuals. What about what our brilliant governments owe.

But that was my point all along. The education required to make good decisions in our system is not evenly distributed. And then rich people incite poor people to make bad decisions and afterwards they blame them for having made those bad decisions which accidentally caused the rich guys to make a profit.

[Fragony]

But that was my point all along. The education required to make good decisions in our system is not evenly distributed. And then rich people incite poor people to make bad decisions and afterwards they blame them for having made those bad decisions which accidentally caused the rich guys to make a profit.

If we keep it to America, look up the community reinforcement act of the Carter administration. You will immediatly understand why people bought houses they can't afford.

[Seamus Fermanagh]

Well, my reply to GC seems to have sparked some VERY nice discussion.

I do not object to taxation. The Athenian approach, as noted above, is even more inane.

I do not particularly want higher taxes -- though fewer loopholes written for one company and such would be a nice improvement.

My objection is with the form of taxation. If the goal of a tax system is and should be wealth redistribution....then tax wealth. Taxing income only gets in the way of those trying to achieve; it does not touch the "this isn't income" plutocrats whom GC decries so much in the first place.

I have a bright chap in my comm class, b-student who owns his own tattoo parlor, who has been "paid" little or nothing since he bought a piece of the business, instead granting himself "stock" compensation in a closely held corp so that he can be taxed at 15% and not 35%.

Our current emphasis on income tax, at least as framed, fails to generate the revenues needed for sweeping improvements such as those suggested by Horetore and GC, AND manages to create stumbling blocks to wealth achievement. Trending towards the worst of both.

[Rhyfelwyr]

Unless tax levels were ever made truly crippling, they will not do much to affect income inequality - it would be a token measure at best.

Taxation is not the answer. Welfare is only a short-term answer. Education is no longer the answer, as my own life testifies.

As things stand, a big chunk of the population has neither the incentive nor the means to improve their lot in life. IMO the solution is to help the ordinary worker to produce their own wealth, which would require a whole host of very broad and varied measures. That would stop the inequality at the source, rather than merely curbing its excesses as taxation aims to do.

[HoreTore]

Well, my reply to GC seems to have sparked some VERY nice discussion.

I do not object to taxation. The Athenian approach, as noted above, is even more inane.

I do not particularly want higher taxes -- though fewer loopholes written for one company and such would be a nice improvement.

My objection is with the form of taxation. If the goal of a tax system is and should be wealth redistribution....then tax wealth. Taxing income only gets in the way of those trying to achieve; it does not touch the "this isn't income" plutocrats whom GC decries so much in the first place.

I have a bright chap in my comm class, b-student who owns his own tattoo parlor, who has been "paid" little or nothing since he bought a piece of the business, instead granting himself "stock" compensation in a closely held corp so that he can be taxed at 15% and not 35%.

Our current emphasis on income tax, at least as framed, fails to generate the revenues needed for sweeping improvements such as those suggested by Horetore and GC, AND manages to create stumbling blocks to wealth achievement. Trending towards the worst of both.

I favour taxing what is owned rather than what is earned, even though the end result probably isn't that big since the state has to rake in the same amount of money, and that for the most part means the same people paying.

I could go on and on about how wealth taxation is better than income taxation, as the last election in Norway had removal of wealth taxation as one of the hot issues, and I argued endlessly with friends on how we should instead increase the wealth tax and reduce the income tax. The biggest problem with the wealth tax is the human brain: we react strongly to something being "taken away"(why do I have to pay tax on this house I already paid for?!?!?), but we don't really react at all if we don't get the chance to buy that thing. But since we seem to be all in agreement here, I won't do the wall of text-thing now...

[Ironside]

I have a bright chap in my comm class, b-student who owns his own tattoo parlor, who has been "paid" little or nothing since he bought a piece of the business, instead granting himself "stock" compensation in a closely held corp so that he can be taxed at 15% and not 35%.

Our current emphasis on income tax, at least as framed, fails to generate the revenues needed for sweeping improvements such as those suggested by Horetore and GC, AND manages to create stumbling blocks to wealth achievement. Trending towards the worst of both.

Increasing the capital gain taxes to normal income taxes or even the highest levels are a great reform for the US. Honestly, anybody going for a grassroot campaign should start here. It's easy to explain, easy to implement, simple and the top politicians will never touch it by themselves. Because they use it. And pay less taxes than those employed in the White House because of it.

Who has a lot of capital gain? Wealthy people. CEO:s who's changed their salary into divends. It slows down wealth accumulation and works as an indirect wealth tax.

[HoreTore]

Money is not based on any real assets. There is no gold or silver involved as in the past.

Go read a book or two on economics. This sentence(along with a few others in your post) makes no sense whatsoever.

The price of gold is based on the exact same thing as today's money, which you refer to as "no real asset".

[Fisherking]

Go read a book or two on economics. This sentence(along with a few others in your post) makes no sense whatsoever.

The price of gold is based on the exact same thing as today's money, which you refer to as "no real asset".

If you fail to understand this, you need to be the one reading up on fiat money and fractional reserve lending.

[Montmorency]

All "money" is ultimately fiat money.

[HoreTore]

All "money" is ultimately fiat money.

Indeed.

Gold is only marginably more valuable than the cotton in our current bills. Arguing a return to the gold standard is missing the point completely. Especially if you then believe that the value of money will be based on something other than what it is currently based on.

Money has always been and will always remain based on the production value of work. That's the basis of it, gold and cotton is simply the way we represent that value, and we do so because it's a lot easier to carry around a few bills than it is to carry around 2-3 cows.

[Tellos Athenaios]

As an interesting aside, the price of gold is fairly arbitrary but it is not quite the same as fiat money. The reason is mostly the chemical properties of gold (which mean that you can store it and transport it in a practical fashion) and the fact that is not actually rare without being plentiful (unlike, say, Xenon, Helium or Iron). You need your money to be not too difficult to obtain or else very few people can use it. Its chemical properties also mean you are quite likely to find it in its metallic crystalline form, which means it's likely to be shiny which humans happen to find interesting and attractive. So it makes for a good gift or money as it is both expensive (so the recipient can appreciate the effort) and quite useless (so there is little incentive to demand too much of it, damaging real productivity).

The flipside means that in a modern, advanced economy gold is subject to speculation and other manipulations like any other common commodity. In these days you might as well pick 'oil' as your money.