# Thread: Why income/wealth equality is getting worse

1. ## Re: Why income/wealth equality is getting worse

142857 said
DBD, I know you're joking around. But if the right wing did save the US a lot of money on health care, imagine how much they'd be spending:

If a smoking gun were needed that the principles of neoliberalism are deeply, deeply flawed.......
I wasn't joking actually. The US may be spending a lot of health, but somehow that does not seem to be helping the poor much.

2. ## Re: Why income/wealth equality is getting worse

Stub King said
not sure this belongs here, but could not be bothered starting a thread and seems like I (a PROGRESSIVE COSMOPOLITAN apparently) differ from the ACTIVIST EGALITARIAN by being less strongly concerned with the redistribution of wealth, it would seem ostensibly the right spot. for the record, I am very concerned with income inequality, I just don't think "redistribution" in the communist/marxists sense is the best long term solution. it is more about growing the pie than redistributing a fixed size one, while at the same time correcting the distribution mechanisms of growth
I'm an Activist Egalitarian and yet I completely agree with you. There are underlying assumptions and gaps in the "tribe" questions.

To me distributing wealth is only for the purpose of enabling others to become productive and produce more wealth and minimal humanitarian safety net[/edit]. Income in balance is a problem in that it leads to some few people accumulating the financial freedom to do more rent seeking, while denying to more and more of the population the means to apply themselves to creating wealth (or rent seeking as the case may be).
Last edited by DanDare; 6th February 2017 at 07:27 PM.

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## Re: Why income/wealth equality is getting worse

That quiz I got activist egalitarian. Bullshit. I may be an egalitarian but I am no activist. I may belong to a political party but I don't do demos, anymore at least. Some political action I have seen others do I would argue is directly harmful to the cause if anything.

There is a natural feedback loop when it comes to wealth. Our society assumes that you earn at the very least a bit more than $40k/yr, i.e. the award minimum wage. You have people who can't afford food and clothing week to week, can't even afford a roadworthy car. It sux in our system that at times it costs more to have no money (eg. have to use prepaid mobile rather than a plan; get a 15% unsecured car loan rather than a 7% secured loan etc). Once you move beyond that - it is possible to start accumulating wealth via saving. Having an extra$30k/yr disposable income can make a world of difference to leisure, home ownership, education of offspring, and so on. Invest, and turn a bit of money into lots of money.

I have no problem with liberalism and capitalism, in fact i've defended them for years, mostly on the basis that they are the least worst political/economic arrangement on offer. But, you know, i have some very wealthy friends. They invest their cash at 48 to 70% pa return, interest paid monthly. Only thing is, you need $500K minimum and an invitation (and that's the junior fund!). No real risk but good luck with the invite. Banks offer about 3% and make around 10 billion in profit every year. Our system is deeply fucked really and there seems to be zero popular political will for deep structural change. I think we'll need a depression or a war for that. I'm a progressive cosmopolitan btw and for me thats a fairly accurate definition, except i'd preface it - 'disappointed progressive cosmopolitan.' 5. AFA Member Join Date Oct 2012 Posts 4,788 ## Re: Why income/wealth equality is getting worse Darwinsbulldog said God-damned socialist! A probate tax will address much of the inequality. The other aspect is making corporations less like legal persons. Corporations have most of the advantages and fewer of the obligations than real persons, and this is part of the problem, the other aspect being the number of jurisdictions, and hence the loopholes for corporations to avoid or minimize tax to levels which in terms of a real person, would be characterized at the level of sociopath. In a capitalist world economy [whether that capital be in private or government hands], the child born into abject power must have some competitive advantage over super-power nation-states or global corporations. Traditionally, our imperfect human empathy has tried to address the lack of competitive advantage of the abject poor, by charity and aid. Our charity is imperfect first, because of corporations, who are not real persons, and governments, who are not perfectly altruistic to their citizens. At the personal level too, charity is very patchy. All this results in the poor getting screwed. In any event, the microeconomic model, which worships incentive is clearly fantasy. A child can have all the motivation and incentive, and yet lack the means to an income and wealth accumulation, so clearly tax systems have to alleviate these burdens on the poor for them to operate on a tolerably level playing field. Clearly, the "gift economy" sector has to be able to operate in the wider, globalized, corporatised, nation-state scenario. At the moment it is not, so long as children are born into poverty, and suffer multi-generational disadvantage compared to other individuals, states and corporations. Exactly how this can be addressed is not clear. Should poor individuals and states have more voting power per capita? If the poor lack financial power, then they must have political power to compensate. It is just too easy for corporations or rich individuals to buy votes or political influence, and hence be able to block any reforms that try to address inequalities in wealth and income. Would you say DB that itis the result of well known biological choices of those in positiins of dominance? It seems that the natural response of those born in abject poverty to the likely death of some children being to have more and more children is the most powerful biological response. 6. AFA Member Join Date Oct 2012 Posts 4,788 ## Re: Why income/wealth equality is getting worse wolty said Stub King said wolty said Redistribution already happens. It's what taxes are for, to provide for those less able to care for themselves and for the benefit of society as a whole. this is obvious, c'mon. but the solution is not to slap a 95% income tax on people. A bigger pie actually doesn't work. Those in power simply take more. are you saying economic growth does not work? ofcourse it does. this is how we got the middle class. it is not a guarantee but it is a per-requisite. as long as those in power don't take too much. It was the case post WW2, the middle class grew and inequality shrinks when that happens. however constant vigilance and tweaking is needed. we then got rampant globalization, we drank too much kool aid and the balance shifted. so now we need to correct it. taxation will be an element we will need for repair (and cuts to corp tax ain't it) but it is not the only solution, and it should be measured not extreme. No. I'm saying that we have just come through the biggest GDP growth rate (bigger pie) ever in Australia's history thanks to the mining boom and the bottom 90% now have less wealth as a percentage than before the growth. They are going backwards, in a boom. The reason is the top 10% make the rules, often pay no tax or very little, subsequently services suffer that dis-proportionally effect the bottom 90%. It's the same argument of just raising the GST level. As a percentage it will effect the lower paid more. The only question is how equitable a society we want to live in. I think this is not the right question. we could all be dirt poor. very equal, but not desirable, I hope you agree. so this is just part of it. equitable=/=equal. There's plenty to go around. Fuck 2 Australians have the combined wealth of the bottom 20%. People are already 'dirt poor'. Australia's two richest people, Gina Rinehart and Harry Triguboff, own more than the poorest 20 per cent of the country's population, research shows. Worth an estimated combined$US16.1 billion ($A21.5 billion), the nation's richest woman and the Meriton property boss are among the wealthiest one per cent of Australians, who together own more than the bottom 70 per cent, an Oxfam report says. The statistics, published in a global report titled An Economy for the 99 per cent, come as the world's political and business leaders gather for the annual World Economic Forum in Switzerland. http://www.sbs.com.au/news/article/2...fth-population Currently it's getting worse and has been for along time. One of the biggest problems i see is the squashing of human capital. Why for example can't we train more dentists, and doctors? These are choices we make as a society to invest the money in other things like negative gearing for example 7. AFA Member Join Date Oct 2012 Posts 4,788 ## Re: Why income/wealth equality is getting worse PS another biological aspect of this for most Australians is, welcome to the real world. Families generally have to work together to survive as has been known by mist people in the world for a very long time. We shouldnot fool ourselves that society would not toleratethings getting much much worse. We already tolerate rates of Aboriginal imprisonment ten to thirty times the average so as a society we could tolerate that applied across the board. I walk past homeless people trying to sleep in train stations during rush hour on my way to work nowadays. 8. Senior Member Join Date Jun 2012 Posts 350 ## Re: Why income/wealth equality is getting worse pipbarber said They invest their cash at 48 to 70% pa return, interest paid monthly. Only thing is, you need$500K minimum and an invitation (and that's the junior fund!).
Those numbers sound suspicious. Even Warren Buffett only gets 20% return on a good year.

pipbarber said
Banks offer about 3% and make around 10 billion in profit every year.
Banks aren't good but you don't need a minimum deposit to stick your money in an index fund like Vanguard and get 5-12% depending on your risk tolerance. This is even the strategy that Warren Buffett is recommending as few people are able to regularly beat the index.

While I have a lot of problems with wealth/income inequality I think capitalism itself plays a large role in the problem. It creates a society where we are inundated with advertisements, TV, movies and celebrities all praising materialism and consumerism. Everyone seems to fall for it so we all need to buy the biggest house we can't afford and the fancy cars and gadgets and gizmos. Gotta keep up with that Jones guy next door. So it's no surprise that few Australians save money and they will never experience the benefits of invested money or inheritance for their kids that those rich folks enjoy.

Obviously those at the bottom of the income spectrum have no choice but to spend 100% of their money on staying alive but even people on the median wage and above seem to do the same. This is bad for Johnny Depp (Johnny Depp’s financial woes are part of a much larger national problem) but even worse for the average person.

Anyway, spend less, save more, maybe some of us or our kids can escape the maze.

9. ## Re: Why income/wealth equality is getting worse

Wrenn said
Those numbers sound suspicious. Even Warren Buffett only gets 20% return on a good year.
If i hadnt seen the bottom line with my own eyes for the last two years i'd agree. Warren Buffett is at the top of the tree and he seems a reasonable human but he didnt get there on 20% returns.

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## Re: Why income/wealth equality is getting worse

pipbarber said
Wrenn said
Those numbers sound suspicious. Even Warren Buffett only gets 20% return on a good year.
If i hadnt seen the bottom line with my own eyes for the last two years i'd agree. Warren Buffett is at the top of the tree and he seems a reasonable human but he didnt get there on 20% returns.

Was it Einstein who said that compound interest is the most powerful force in the universe?
With a doubling rate of 3.5 years (for 20% compound interest calculated for example daily or monthly) then for every 3 and a bit doublings there is an increase by an order of magnitude/factor of 10. So for a hundred thousand dollars invested, in 35 years at 20% compounding it should be 100 million dollars. With another 10 and a half years it should be a billion dollars, and with a further 10 and a half years it should be ten billion dollars. Now WB is a bit more wealthy than that so maybe add another 7 years or so to increase by a factor of 4 and get say 40 billion dollars in 62 years. I think he is quite old but depending on his starting age, and his lump sum starting figure (100,000 was really a stupendous figure in 1955) it is about right or at least in the ballpark.

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