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All we are doing is re-allocating EXISTING income. We are not increasing the total amount of income that is getting paid out. So it does not cause inflation.
If all we did was increase the minimum wage to $115k, and kept everyone else's income the same, that would cause inflation. But that is not what we are doing. We are also lowering the top pay from hundreds of millions and billions of dollars to just $460k. The amount we are reducing the top pay is exactly equal to the amount we are increasing the minimum pay. The net result is no increase in price on average. This is math 101.
If you have a $14.5 trillion economy and you only pay out $14.5 trillion in income, it is mathematically impossible to have inflation. How is the economy going to inflate beyond the $14.5 trillion if only $14.5 trillion is being spent? It can't. It is impossible.
You can see the calculation in paying out those incomes here:
Those who make "millions" do not buy proportionately more
food
energy
housing
household goods
clothes
cars
than those who make $50,000. With an increase in the "minimum wage" to $115,000, there is greater demand for these consumer expendibles. The "rich" do not eat 1,000 times what the poor eat, nor do they use 1,000 times the laundry detergent or gasoline.
Your "plan" results in marked inflation, reducing the purchasing power of those reallocated dollars and reducing invested captial (which you stole from "the rich"), thus depressing the economy.
To quote John Cleese from Monty Python in the skit "Dennis Moore"- "This redistribution of wealth is a bit more tricky than I thought"!
At first I thought it was a right winger trying to be sarcastic. However, after reading it, I saw that the OP was way too intelligent to be a right winger. I must say the shear volume of the thread gave me a good laugh this morning.
This has to get the medal for the most substantive post ever published on CD.
That is right (in the mind of a liberal). Pulling the "D" lever in the voting booth confers an automatic MENSA membership to every liberal.
Want to match IQ points, education, or income? - From one of those idiotic conservatives.
Buying inventory is paying income to workers since that money is being used to pay workers to produce that inventory. That is not what is meant by paying 100% of our income to workers.
We pay two types of income in our economy. Roughly half goes to people for working and producing every single good and service in our economy. That is called earned income because they got that income by working.
The other half of our income is paid to people who do not work and do not contribute to producing anything in our economy. This is called unearned income because they got that income without working.
An example of unearned income is interest. If you had $10 million, you can deposit that money in a bank and collect $300,000 per year in interest income without working at all. You can sit home all day watching tv, and you will get paid all that money every year.
Since these people do not work, they are contributing absolutely nothing to the economy. So it is a complete waste to pay them. And since this is $300k less that we can now pay to workers, the people doing the actual work, it is not fair to workers. That $300k should be getting paid to workers.
Half our income is paid out as unearned income. So workers are only getting paid half the income they produce.
Of course, we need money to invest and lend. However, what this post explains is that we don't need to borrow some person's savings in order to lend and invest in our economy.
Paying people unearned income like interest or profit in order to make investment money available is just as useful and necessary to a market economy as needing to pay people to print their own money in order to make money available.
A central bank can provide investment money to the market more efficiently than private investors can just like it can deliver enough money to the market more efficiently than private individuals printing their own money can.
The central bank will just provide investment banks with enough investment funds, taken from whatever the natural savings rate is, to meet whatever their demand for investment funds is.
The central bank's mandate will be to provide enough investment money to launch or expand enough businesses to fully employ everyone who wants to work. If the natural savings rate is not enough, they would levy a tax on gross sales in order to make up the difference.
This is a trivially simple task to accomplish for a central bank, especially in today's digital banking system. Just like the central bank can manage the money supply, they can manage the investment supply.
Keep in mind that this does not mean government does the investing, or runs the banks, or runs the businesses. This is still a free market economic system. Investing will still be done by individually run banks, the people at those banks in charge of investing will still be paid based on how well their investments perform, those investors will still invest in entrepreneurs who launch individually run companies, and those entrepreneurs will still be paid based on how well the companies they launch perform.
It just means the funds they use will be public funds. And requiring companies to use public investment funds is no different than requiring everyone today to use public money.
But most importantly, using public funds will enable us to stop paying unearned income. It will enable us to pay workers twice the amount of income they are getting paid today. And it will enable us to always maintain full employment. You wouldn't ever have today's situation where 18% of workers cannot get a full-time job while tens of trillions of dollars sit idle.
For a little more information on investing, read this.
I read your entire post and you still didn't answer my question. What about stores that don't actually produce their own items, but buy them from third party factories. Under your plan...how would said store purchase that inventory if they are paying ALL of their income to their employees who just run stores or work in the stores?
If you have a $14.5 trillion economy and you only pay out $14.5 trillion in income, it is mathematically impossible to have inflation. How is the economy going to inflate beyond the $14.5 trillion if only $14.5 trillion is being spent? It can't. It is impossible.
You can see the calculation in paying out those incomes here:
But if stores are spending drastically more on their employees salaries than they ever have in the past...they are going to have to raise prices in order to bring in more income to pay said salaries. Taking huge chain stores that employ thousands of minimum wage employees nation wide and then forcing them to increase their salaries that much, will force that particular store to raise the prices of their products. Even by decreasing the salaries of their top paid executives, it won't make up for the increase in salaries to the lowest tier workforce in said company. How would that particular store survive without raising prices.
Your plan is more geared to the nationwide economy, which doesn't apply to individual companies or stores that actually supply the goods and services. Unless, you're advocating for a full government takeover or all companies nationwide.
Those who make "millions" do not buy proportionately more
food
energy
housing
household goods
clothes
cars
than those who make $50,000. With an increase in the "minimum wage" to $115,000, there is greater demand for these consumer expendibles. The "rich" do not eat 1,000 times what the poor eat, nor do they use 1,000 times the laundry detergent or gasoline.
Your "plan" results in marked inflation, reducing the purchasing power of those reallocated dollars and reducing invested captial (which you stole from "the rich"), thus depressing the economy.
To quote John Cleese from Monty Python in the skit "Dennis Moore"- "This redistribution of wealth is a bit more tricky than I thought"!
Not to confuse opinions with facts but they do. In average they do tend to spend more on housing (and therefore energy), clothes, and cars...but, carry on with your bad self...
All we are doing is re-allocating EXISTING income. We are not increasing the total amount of income that is getting paid out. So it does not cause inflation.
If all we did was increase the minimum wage to $115k, and kept everyone else's income the same, that would cause inflation. But that is not what we are doing. We are also lowering the top pay from hundreds of millions and billions of dollars to just $460k. The amount we are reducing the top pay is exactly equal to the amount we are increasing the minimum pay. The net result is no increase in price on average. This is math 101.
That sounds good to me and I'm all in favor of it!
I can see how prices and wages could be regulated but what about private businesses - what will stop the owners from earning more than the maximum amount of 460K?
To do what you suggest is stealing the fruits of other's labor. It's like someone stealing a bag of chocolate chips from me and me claiming that the only "fair" repayment is giving me Mrs. Field's company. Clearly, if someone hadn't nabbed my chips, I would have parleyed those chips into a cookie empire. Mrs. Field's had nothing to do with her success and did nothing for it other than steal chips from poor, pitiful workers like me.
I don't think that is what he is saying.
More the case that we will have a more equitable wage disparity amongst all members of society.
what is so wrong with that?
the competition for the more preferable and interesting jobs will still occur as no-one would really choose to work at MacD's.
so the compensation for effort will come in the form of a more enjoyable job, and a higher salary than the burger flipper - and let's not forget that status and job satisfaction are two of the main factors when determining wealth.
ie: it's often just psychological more than anything else.
That sounds good to me and I'm all in favor of it!
I can see how prices and wages could be regulated but what about private businesses - what will stop the owners from earning more than the maximum amount of 460K?
Wow.
Do you live in a community that is roughly 25 square feet an dlives off a barter system of shells and bones?
Your concepts in no way reflect any form of economic reality ever shown to exist. Ever...
Those who make "millions" do not buy proportionately more
food
energy
housing
household goods
clothes
cars
than those who make $50,000. With an increase in the "minimum wage" to $115,000, there is greater demand for these consumer expendibles. The "rich" do not eat 1,000 times what the poor eat, nor do they use 1,000 times the laundry detergent or gasoline.
that's not a problem because the extra demand will create extra jobs - and thus close to zero unemployment.
So more can be produced - this is far more efficient than having large numbers of unemployed whilst all the money of the rich people just sits idle in offshore bank accounts.
But if stores are spending drastically more on their employees salaries than they ever have in the past...they are going to have to raise prices in order to bring in more income to pay said salaries. Taking huge chain stores that employ thousands of minimum wage employees nation wide and then forcing them to increase their salaries that much, will force that particular store to raise the prices of their products. Even by decreasing the salaries of their top paid executives, it won't make up for the increase in salaries to the lowest tier workforce in said company. How would that particular store survive without raising prices.
Your plan is more geared to the nationwide economy, which doesn't apply to individual companies or stores that actually supply the goods and services. Unless, you're advocating for a full government takeover or all companies nationwide.
I would advocate fully nationalizing all industries in this scenario, with price and wage fixes.
That should do the trick.
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