Skip to comments.Income inequality could take toll on growth (triple bag barf alert)
Posted on 10/21/2012 9:34:41 AM PDT by TurboZamboni
Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.
The yawning gap between the haves and the have-nots -- and the political questions that gap has raised about the plight of the middle class -- has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.
"Growth becomes more fragile" in countries with high levels of inequality like the United States, said Jonathan Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation's economic expansions by as much as a third.
Reducing inequality and bolstering growth, in the long run, might be "two sides of the same coin," research published last year by the IMF concluded.
(Excerpt) Read more at twincities.com ...
The Latest News on Tax Fairness [top 20%'s share up, everyone else's share down over last 30 years]
CBO: By the way, the rich already pay more than a fair share in taxes
I take issue with your title ‘add on’.
It’s at least a six bagger. LOL
If it isn’t race it’s sex.
If it isn’t sex it’s neighborhood.
If it isn’t neighborhood, it’s school
If it isn’t school, it’s money.
Today’s Leftists are the most divisive people we have seen since Hitler’s beer hall days.
And what’s more, they’re headed in the same direction he was.
I can see how inequal income could limit growth. For example take the US, there is a big income disparity between slackers who won’t work and demand handouts and those that do work. When a country has a high number of able bodied people who are slackers, live on hand outs, falsely claim disabilty, it must limit the economic growth of a country.
The Middle Class is being decimated, on purpose. When all that is left in the country is a powerful elite and a helpless worker class, revolution cannot be far behind.........at least that’s The Plan........
No less significant is the intellectual outlook of the rank and file in the communist and fascist movements in Germany before 1933. The relative ease with which a young communist could be converted into a Nazi or vice versa was well known, best of all to the propagandists of the two parties. The communists and Nazis clashed more frequently with each other than with other parties simply because they competed for the same type of mind and reserved for each other the hatred of the heretic. Their practice showed how closely they are related. To both, the real enemy, the man with whom they had nothing in common, was the liberal of the old type. While to the Nazi the communist and to the communist the Nazi, and to both the socialist, are potential recruits made of the right timber, they both know that there can be no compromise between them and those who really believe in individual freedom.
-- F.A. Hayek, The Road to Serfdom
The Road to Serfdom was written in 1940-43, published in 1944 in the UK and the US.
I have been saying that we need to at least examine whether or not the increasing income disparity has something to do with the bottom falling out of the culture. Seems like it is not the rich who are exploding in numbers, but the poor who are losing touch with the skills and chararcter needed to hold a steady job.
Part of the inequity is the increase of regulation on small businesses - and I mean small. We have known for a long time that larger businesses have supported additional regulation in order to pressure smaller businesses who could not comply and survive. They eliminate the competition. We see this squeeze quite a lot in the natural resources industries. CA agencies are more and more supported by fees and they climb each year as more and more permits are required. The water boards, Dept. of Fish and Game/Wildlife, Board of Forestry pile on the permits and fees while CEQA, CESA etc add survey, analysis and planning requirements that can only be completed by expensive consultants. The entrepreneur and the little guy are destroyed.
Very nice. It touches on the result of Communism and Socialism. Oh they sound great up front to some people with soft minds. It’s what they wind up in that makes even the idiotic initial beliefs so dangerous.
The Left in the United States should have been able to study history and learn this for themselves, but the professors and the Leftist gamers of people, ignore that.
Sooner or later, the Left lines people up and shoots them. Too bad their guns don’t backfire. Civilization would be greatly served.
” The yawning gap between the haves and the have-nots”
How many decades now have the left used this “gap between the rich and poor growing larger” cliche? They’ve used it so many times, poor getting poorer, the poor should be living in caves and wearing animal skins by now.
IMO, we betrayed the lower income people, when we moved manufacturing overseas. You don’t put your neighbor out of work and expect them to support a system that has betrayed them.
It has been my take that I would rather spend a bit more for my goods, than see my neighbor’s salary cut in half or more.
We were running upwards of $700 to $800 billion dollars in deficits with China before the crash. We forfeited the multiplier effect on that sum of money in our nation each year.
We’re talking about $2 to $3.5 trillion dollars more circulating in our economy, not China’s.
That sure worked out swell.
“Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the IMF concluded.”
If my income was closer to that of the upper earners I know it would bolster economic growth locally and even add to the GNP.
So if anyone really wants to help the country out of this depression....I promise to redistribute every dime I receive.
Look, I’m not unsympathetic to your thoughts here in part, because there’s more than a little truth in it. Just remember the following.
This is a Democrat administration. Do you realize how bad things have to be for the papers to talk about the poor.
We’re spending close to $1 trillion a year on welfare right now.
Food stamps are now being used by 47 million families, up from 32 million when Obama was sworn in.
This doesn’t even address unemployment, and those who have dropped off the work-force completely. (well, it does in a way, but I think it’s worthy of mention in addition)
Even on the right, we have to admit that our system is in very bad shape right now.
Should that be gamed as haves and have-nots? No. You’re certainly right there. We just need to get people back to work.
Class warfare is pointless. It’s akin to killing the golden goose.
You fix this by getting government’s fingers out of literally everything. Starting with taxes, regulations, and the EPA... and not necessarily in that order either.
I thought the Pelosi congress and the Obamanation were supposed to reverse this trend, not put it on steroids.
In a free and rational society with a just government:
1) Limiting consumption of the rich would result in the destruction of incentives to accumulate and maintain capital and to improve and maintain production. Losses in terms of innovation and the growth of major new industries would be substantial.
2) Limiting income of the rich would result in the decumulation of capital.
3) Limiting wealth of the rich by seizure and confiscation is an assault on private property rights and an assault on the improvement of productivity of labor and economic progress
Under Obama, Poor, Middle Class Incomes Fall Sharply
Despite repeated promises that he would build prosperity from the bottom up, President Obama has presided over three years of income losses for the middle class, according to the latest household income data from the Census Bureau.
Since 2009, the middle 20% of American households saw their average incomes drop 4%. In 2011 alone, they fell 1.7%. The poorest 20% have fared even worse under Obama, Census data show. Their incomes have dropped more than 7% since 2009, and are now lower than they’ve been at any time since 1985, after adjusting for inflation.