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Money doesn't grow on trees. You make it off someone through selling a product, providing a service, investment, etc.
if a person had a job that depended on other people spending their income on a product; however, other people saved and did not spend; wouldn't he be laid off for lack of business?
If a person looked for investment in a business that required people to buy the stuff he made, but people saved instead of spent their money, would that person attract investors?
Saving is good for the individual, but for stable economic growth, government and businesses want people to buy. The art is to find that happy median between spending and saving that would provide optimum national economic growth
You are partly right, but that's oversimplified, I think.
Market research must be done to discover if there is really a market for the product or service you wish to offer. If there is none, your dead in the water. You're finished.
If there is a market, then there are other things to consider. Cost vs. selling price. There has to be sufficient profit to make it worhwhile.
But, a down economy (such as our current economy) will affect just about any business. There isn't much you can do about that.
Income inequality is a problem to the extent that it leads to social instability or economic instability. You could also object on theoretical grounds, but in practical terms, inequality and instability are often linked, and we'd want to avoid that.
The thing to remember is that "inequality" usually refers to severe inequality, rather than just purely mathematical inequality. Inequalities will naturally arise in any economic system other than hunter-gatherer or small-plot farming village, but "income inequality" usually refers to inequalities beyond a certain point, sometimes phrased in terms of the portion of wealth held by the bottom 50%, or the top 10%, or so on.
The best way to avoid income inequality in life is to be born into wealth, or to get a big inheritance. That'll set you up nicely, like the Wal-Mart kids. You really want to implant yourself into the right womb, and then you're set.
It was a 450 sq ft guest house at the back of a property. The guest house could be rented out legally but could not be sold separately because the lot could not be split in a way that would allow two lots each with the MINIMUM LOT SIZE required.
Minimum lot sizes - nearly ubiquitous in this country - have a lot (no pun intended) to do with income inequality because they pretty much ensure that poor people do not buy homes, which in turns ensured that the poor do not escape rent inflation, which pretty much ensures their continued inability to stabilize their housing costs and build wealth.
Ah, I see.
But there is always a way out for those people. They need to improve their skills so that they can find a better paying job. No one says it's easy. But that is the path that must be taken in the example you provided.
When I got out of the Navy (eons ago) I rented a small appartment with a friend in Pacific Beach. We barely afforded it even then (this was in late 1968). Later, I got a job at a photo lab doing custom black and white printing. So, I increased my income and gained some experience. That led to a job with a local commercial photographer, doing his custom black and white printing (all color was sent out the the lab that I had previously worked at). This job came with an increase in income. I gained even more experience and knowledge.
I was intent on becoming a photographer myself at the time. But, since I had met my wife shortly after and moved in with her, I decided what was best for me (and us) was to take some additional electronics schooling (I had been a technician in the Navy) and return to the electronics field. I took a 9 month course under the G.I. bill, and then got a job in a local TV/Audio repair shop. Two years later, we were buying our first house, so it proved to be the smart thing to do.
Eventually, I took a job with a small oceanographic instruments company in La Jolla, and after several years there wound up in the Marketing department.
This is how people improve their wealth and income situation. The premise that the wealthy have aquired all the wealth of a nation is a mythe, because wealth is created.
Income inequality in laymans terms is when the income distribution becomes so lopsided that it hurts the overall Economy. That's why many, including Economist, are arguing for measures to be done to reverse the trends.
It typically occurs when there is a monopoly held in a particular industry and there is very little competition.
What we have now in many industries, is corporate monopolies where large conglomerates own and control the markets. When this occurs you usually have higher prices (less competition; competition keeps prices lower) and inferior products/service.
I think we all can agree we are experiencing both in this country. Despite stagnant wages, prices continue to increase and in 2008 the unheard of was done when some of largest finance institutions were bailed out despite making detrimental decisions and high risks that had a crippling effect on our ENTIRE economy.
The whole issue of "rising out of poverty" is a totally different discussion. I do have family experience in that area as well though. My family went from the projects to living very comfortably. That is a totally separate discussion though and has little to do with the topic being discussed about income inequality.
Income inequality is more systematic and deals more with employees than entrepreneurs.
Hmmmmm. I'm not sure if that is what most Leftists mean when they complain about "income inequality." It seems to be a term that means different things to different people.
I think they are using the term, like the true propagandists that they are, to indicate some flaw in our capitalist system, denying the simple truth of wealth creation, and embracing the false notion that there is one big economic "pie" that is divided up, with those at the top getting the biggest piece.
So, I began this thread to see if any of them could explain that theory, which to me, is ridiculous on its face, and I'm finding that more than I expected believe as I do, that wealth is created and is infinite.
Of course liberals do. The difference is that while liberals take from the poor with their right hand, they are redistributing TO the poor with their left hand..eir rght hand and.conservatives merely take from the poor without giving the poor anything with their left hand....and then if someone has the audacity to complain, conservatives tell them to vote with their feet.
I think studies have been done which show that conservatives are far more philanthropic (in general) than are liberals.
I think income inequality is a misleading, general, boogy-man term to substantiate efforts like 'wage affirmative action' i.e. minimum wage to 'living' wage, or CEO salary caps (to multiples of floor workers), or redistribution of 'wealth', or heavily taxing the top xx%.
It seems to feed the 'evil eye' toward those at the top, or justifies saying 'they' are not paying their 'fair share', whoever 'they' are. It's just a broader term for the male/female pay inequity (that I don't believe really exists either - but that's another thread - oops!).
You do realize that's because the 1% are taxed the most, no? The government promotes income inequality because the more that 1% earn, the higher the tax revenue the government collects. Think about it...
But there is always a way out for those people. They need to improve their skills so that they can find a better paying job. No one says it's easy. But that is the path that must be taken in the example you provided.
When I got out of the Navy (eons ago) I rented a small appartment with a friend in Pacific Beach. We barely afforded it even then (this was in late 1968). Later, I got a job at a photo lab doing custom black and white printing. So, I increased my income and gained some experience. That led to a job with a local commercial photographer, doing his custom black and white printing (all color was sent out the the lab that I had previously worked at). This job came with an increase in income. I gained even more experience and knowledge.
I was intent on becoming a photographer myself at the time. But, since I had met my wife shortly after and moved in with her, I decided what was best for me (and us) was to take some additional electronics schooling (I had been a technician in the Navy) and return to the electronics field. I took a 9 month course under the G.I. bill, and then got a job in a local TV/Audio repair shop. Two years later, we were buying our first house, so it proved to be the smart thing to do.
Eventually, I took a job with a small oceanographic instruments company in La Jolla, and after several years there wound up in the Marketing department.
This is how people improve their wealth and income situation. The premise that the wealthy have aquired all the wealth of a nation is a mythe, because wealth is created.
So you acknowledge that government is picking winners and losers, since government is creating an artificial barrier to the wealth creation that home ownership affords. It's as if government required all cars on the road to be at least as good as a Chevy, and cars which did not meet this standard could not be sold.
So you acknowledge that government is picking winners and losers, since government is creating an artificial barrier to the wealth creation that home ownership affords. It's as if government required all cars on the road to be at least as good as a Chevy, and cars which did not meet this standard could not be sold.
Government interference is a problem, and it seems to be getting worse. I think it needs to stop, but it isn't likely to happen, as we seem to have allowed government to dictate far too many standards, all of which interfere with the free market. I like your anology, and government setting standards for emmissions is another, and it is driving up energy costs, which hurts everyone. Recognize that these things are all supported by Leftists who claim they do these things for the "common good." But they hurt people who cannot afford the increase in their energy bills. That is of no concern to the Leftists, however, who insist that government mandate these standards. But Leftists wish to control people's behavior. That's what it is about.
Regarding home ownership, it is only one way to create wealth, however, and it isn't really even the best way. One assumes that the value of a home appreciates, but as we saw in 2008 when many home values plummeted, it isn't a 100% guarantee. As with any investment, there are risks. And a home has to be properly maintained as well. It is a hedge against inflation, however, as it stabilizes your housing costs, even though property taxes will still rise, and insurance costs will rise.
Investing your money (what my father used to call "putting your money to work") is another form of wealth creation. But, you need to envest wisely, and to do this, one should have the help of a professional. Buying stock in a company makes one part owner in that company. If the company does well, the value of your stock increases, creating wealth for you.
I think income inequality is a misleading, general, boogy-man term to substantiate efforts like 'wage affirmative action' i.e. minimum wage to 'living' wage, or CEO salary caps (to multiples of floor workers), or redistribution of 'wealth', or heavily taxing the top xx%.
It seems to feed the 'evil eye' toward those at the top, or justifies saying 'they' are not paying their 'fair share', whoever 'they' are. It's just a broader term for the male/female pay inequity (that I don't believe really exists either - but that's another thread - oops!).
I agree.
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