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A common selling point for you people is that you want to spread the wealth/money so that more people can have more. Ok, but you do realize that it's the actual production of good and services that creates the real wealth correct? Money itself is worthless, it's just a method of making the trading of goods easier. The actual production of goods is what makes us rich. As technology grows more advanced the production and distribution of goods and services becomes more advanced which lowers prices and raises the overall wealth of society. This is the reason for why we are living better than earlier generations of humans.
However, I almost never hear people who are in favor of left-leaning economical views actually mention or discuss this. They are always focusing on the actual money/wealth itself, as if it is somehow the true valuables. It's not. If you want to make people better off, then you need to find a way to make the production of goods and services more advanced. That is the ONLY way standards of living can become higher. As as always been the case in history.
Let's say you have your way and that starting today the rich pay a 90% tax and everyone else way less, that the minimum wage is way higher, and that welfare/social programs are used to give people more of the rich peoples money.
Now what? How will this make the economy stronger? How has doing this contributed to increased production and distribution of goods and services? What is the economic magic behind your wealth distribution ideas???
There is some optimal amount of income redistribution which maximizes productivity. Think about this for a moment: If there is too much redistribution, then there is little economic incentive to produce more, thus hurting productivity. On the other hand, if there is too little redistribution, then portions of the population will be marginalized and unable to afford to do the things that would make them more productive, such as getting a better education/training or moving out of an area without good opportunity, which costs money (moving ain't cheap!). Also consider that low-income families are sometimes forced by pressing financial constraints to provide children with suboptimal care such as low-quality, understaffed day care. This can sometimes lead to delayed development, and thus indirectly to a loss of productivity when that child grows up.
So the key is to find that healthy middle where productivity is maximized. The problem seems to be largely that this country has become ridiculously polarized. We have the dogmatic left-wingers who don't understand the perils of excessive redistribution, and at the same time we also have dogmatic right-wingers who don't understand the perils of insufficient redistribution.
The notion of "balance" seems to have fallen by the wayside.
What too many people forget, when they want everyone's wages raised as an example, is that the money for the raises has to come from some where. It does not magically come available to pay higher wages.
Lets take a simple fast food restaurant as an example. One third of gross income, is going to go for food and supplies. One third goes for wages. One third covers everything else from paying Franchise fee to be able to own the business, building rent or mortgage, taxes, insurance, improvements, equipment, etc., etc., etc., down to a final little bit that they can keep for a profit as the owners income (and this part is a lot smaller than most people realize).
Lets say a law is passed, that increases the wages by 50%. Where is the money going to come from. It cannot come from any profit the owner takes home, because they do not make enough profit to cover the wage raise. Lets look at other sources.
1: Raise the prices. However it may not be possible to raise the prices enough to pay the wages, due to competition. Raise the prices, and the gross income goes down and leaves even less total income to pay the wage increases.
2: Increase the gross volume through increased sales, and get the money to raise wages this way. Again may not be possible to do.
3: Go out of business, as there is no money available to pay the higher mandated wages.
Any business that exists, finds it easy to raise wages when dollar volume keeps increasing. When business stays flat (neither increasing or decreasing) they do not have the money to raise wages. When business decreases they have to cut wages or lay people off and sometimes both. This is the fundamentals behind business.
It is fairly simple, really. Reaganomics didn't work. The rich get richer, the poor get poorer, and nothing trickles down as promised. If minimum wage had kept up with inflation, it would be something like $20/hour now. If the poorest made $20/hour, they could buy more stuff, which stimulates the economy, which is better for everyone. Not as many "welfare" programs would be needed. It would be easier to be middle class, and the middle class is what keeps this county going. Sadly, it is shrinking. Now turn off FOX "news" and try to think for yourself, k?
The change came with the 1990 recession. The job market and employment just did not bounce back. Same thing happened in the 2000 recession. It took years to get back to the employment level prior to the recession. Now we are still just below the employment level way back in 2008 SEVEN years later.
Politicians called it jobless recoveries in 1990 and it got Clinton elected in 1992. But there is something going on in the economy now with jobs that never happened before the 1990 recession.
My guess is that it has to do with unlimited immigration. But nobody really knows.
A common selling point for you people is that you want to spread the wealth/money so that more people can have more. Ok, but you do realize that it's the actual production of good and services that creates the real wealth correct?...[deleted text]
I don't know about other liberals but I don't want to "spread" the money...I would like to avoid its concentration in a relatively few hands in the first place. And I don't care if it goes elsewhere equally or equitably (as "spreading" would imply).
And, no, production and services don't create the "real" wealth. The greatest volume and value of wealth isn't created through value added processes. It's created through speculative buying and selling. Buy low, sell high. Also, take a look at Snapchat. No revenue, no real assets, "worth" billions because of its unrealized, speculative potential to make a profit some time in the future.
I don't know about other liberals but I don't want to "spread" the money...I would like to avoid its concentration in a relatively few hands in the first place. And I don't care if it goes elsewhere equally or equitably (as "spreading" would imply).
And, no, production and services don't create the "real" wealth. The greatest volume and value of wealth isn't created through value added processes. It's created through speculative buying and selling. Buy low, sell high. Also, take a look at Snapchat. No revenue, no real assets, "worth" billions because of its unrealized, speculative potential to make a profit some time in the future.
More money without more goods and services of non-fiat value is not wealth, it is inflation.
The change came with the 1990 recession. The job market and employment just did not bounce back. Same thing happened in the 2000 recession. It took years to get back to the employment level prior to the recession. Now we are still just below the employment level way back in 2008 SEVEN years later.
Politicians called it jobless recoveries in 1990 and it got Clinton elected in 1992. But there is something going on in the economy now with jobs that never happened before the 1990 recession.
My guess is that it has to do with unlimited immigration. But nobody really knows.
... or the fact that we have few factories anymore and buy all our stuff from China or Bangladesh.
It worked for a few people. Only. An economy that is stimulated by fiscal deficits, loose credit, offshoring, and a rising workforce participation rate (women) is not sustainable. The inability to bounce back from recession is part of that.
Median wages have been essentially flat since the late 1970s.
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