I assume you think there is something wrong with that. Could you describe specifically what you believe that is?
I make $10,000 a year, and you make $25,000 (in real dollars). Next year I make $10,000 and you make $50,000. How have I been harmed? And, as mentioned, please be specific - “It’s not fair” is not helpful.
Unfortunately not - conservatives are better informed than liberals about basic economics.
Regards,
Shodan
But that’s not the scenario- the scenario is that your income, $10,000, has NOT gone up year after year, while the income of the wealthy has gone up significantly year after year.
I have no problem if everyone’s income is going up at nearly the same relative rate. But that’s not the case- middle and lower income has NOT gone up relative to the real value of dollars in 30 years or so, and upper income has.
Wow. You really can’t read.
I don’t know how to prove it to you, but maybe if enough people point it out to you it’ll sink in. So I start: You do not know how to read.
My income remaining constant means its value is actually decreasing, since a good economy has a positive inflation rate. And this is in fact caused by certain rich people who do not keep salaries in line with inflation–because, guess what? They get to keep more money that way. If everyone keeps up with inflation, but then the rich get more, that’s not so bad.
Plus there’s the entire value of the market to consider. Yes, value is constantly being added to the economy. But this is not that rapid, and the actual rich people very often make more money than the value of their work. This means that the money has to come from the poorer people. The only reason rich people make money is that poor people buy their stuff. And since wages do not increase in line with inflation, that means they now effectively have more money while poorer people have less. There may be bubbles here and there, but, eventually, things will even out, and the haves will always wind up being hurt less than the have nots.
Also, there’s the fact that $10,000 is not enough to live on for most people. This entails them getting credit in order to just make it through. They can’t have money for health insurance, and they can’t pay taxes, so your taxes have to be higher to subsidize their emergency care. Otherwise you wind up with people dying, which makes them desperate and they will attack you, as Arab Spring has shown.
They are also much more likely to enter bankruptcy, which means that costs of the risk of doing business with these people gets passed on to you.
This is all just off the top of my head. There are more reasons. The higher the income disparity, the worse the economy. And that affects everyone, even the rich.
Well you clearly have a different idea of what social security payments were originally and currently do represent. They are not subsidy payments to allow poor people to stop working at a certain age.
But that goes back to my original question.
Right now the rich grow their incomes at a greater percentage than does the rest of the count. However, let’s assume that their incomes grew at the same rate as everyone else.
Let’s say I’m rich and you’re poor. If I make $100 and you make $10, and next year both of our incomes increase by 10%, the income gap increases even though we both increased our incomes by the same percentage ($90 today vs. $99 next year). Obviously, you say this shouldn’t happen, thus meaning that you don’t necessarily care about how much each group raises their income by, but rather how big of a piece of the pie they’re getting relative to each other. But the only way to prevent the rich from getting a bigger share of the pie relative to other income groups is to either prevent the rich from increasing their incomes on a year to year basis while other groups increase their income or by causing the poor (and middle class) to increase their incomes by a greater absolute amount than the rich. But how would you go about achieving this? Or better yet, before we even get that far, I suppose a better question would be what’s an acceptable level of income equality and how are you going to go about achieving that level?
There’s two ways to look at this: distribution of income across the population, and relative amounts of incomes.
If all incomes are rising at the same percentage, then there is no change in the income distribution. Everyone’s getting richer at the same rate. That has not been happening in the recent past, as average workers are not making more, while top earners are making lots more.
There is also the issue of how executives are paid in relation to other workers. 30 years ago, CEOs made 50 times what an average worker made. Today, they make roughly 500 times what the average worker makes.
Before we jump to how to “fix” this issue, do you believe it is of concern that executive compensation continues to rise at substantial rates, while average worker compensation is stagnant?
If we assume that, problem solved! That’s what we want- growth at the same rate!
In this basic example, you’re not harmed. Let’s add a few details. Like how you and 99 of your $10k brethren are all 2.5% more productive than last year, and the $25k of additional earnings have doubled the manager’s salary but not added a penny to the salaries of any of the workers.
You may be able to continue to claim that you are not harmed. That’s fine. What you cannot dispute is that you do not share in any gains of the economy. As the economy and your productivity grow, you get nothing.
There’s a saying “a rising tide lifts all boats”, which is great if you’re in a boat, instead of stuck on land, where a lot of regular folks seem to be.
This characterization of the “income gap” doesn’t seem match the definition of “income gap” as given in the article (underlining mine):
[QUOTE=Shikha Dalmia]
Suppose the CBO had found that every group’s income increased by exactly 65 percent. Would they celebrate everyone’s good fortune or mourn the unwavering income gap? The question answers itself.
[/quote]
Following the article’s logic, in your example the income gap doesn’t increase.
Regarding the claim that liberal social programs contribute to a widening of the income gap, the article is technically correct in the sense that dropping a rock in the ocean will raise sea levels.
I’m guessing you didn’t actually read the entire article.
The first part of it is a quoted section from an article by Daniel Klein. Klein describes how he took the results of a poll that asked people what their political leanings were and what their opinions were on various economic issues. He then, on his own, decided that some economic opinions were wrong. He then went through and counted how many “wrong” answers each ideological group had. Liberals disagreed with Klein the most so, according to him, that meant they were giving the most “wrong” answers.
The rest of the article was written by Stephen Bainbridge. Bainbridge describes himself as “right of center” and says he’d like to think that there is proof that conservatives are smarter than liberals. But he points out how Klein’s method is too flawed to be used to form any conclusion.
This is correct. That is what a 401K and other retirement funds are for. SS is a supplementary income to assist the elderly in making their “ends meet”.
Your statement, of course, doesn’t address the substance of my statement. Not that I expect you to.
Can you justify Millionaire retirees continuing to take in a SS stipend, while middle class me will most likely not see SS stipends, despite my paying into the system?
It’s remotely possible, I suppose that some conservatives are better informed than their liberal counterparts - although apparently even Professor Bainbridge finds it difficult to support that conclusion - but at any rate, it would seem that this knowledge does not extend to their favored candidates
Quote; CNN Money
Given the ceiling on SS benefits, and the small number of millionaires who fall into this class, and the fact that their benefits will be taxable, and the fact that they did pay into the system, letting millionaires keep their benefits seem worth it to make the system truly universal, and to prevent the right from rabble rousing about how THEY will take away your benefits (as soon as you become a millionaire, which should happen any day now Joe.)
First, there seems to be some arithmetic confusion. Pie shares haven’t changed in your example; the “gap” is always treated in relative terms, not in absolute dollar figures.
But more importantly, while income inequality does become “bad” in itself as it becomes excessive, it is often more useful to focus on it as the symptom of more fundamental policy errors.(*)
There are several policies that need changing in today’s America which would help alleviate income inequality, but would be good for other reasons. For examples (and there are many important items this short list overlooks), we need to
[ul]
[li] Curtail the role of big money in political campaigns[/li][li] Restore anti-monopoly policies[/li][li] Restore progressive income taxation[/li][li] Support health care, education, nutrition for our poorest citizens[/li][li] Facilitate stockholders’ rights.[/li][li] Regulate financial markets. (Financial chicaneries have created great wealth for some individuals, while providing no value, or negative value, to society.)[/li][li] Accept the role of labor unions[/li][li] Et cetera[/li][/ul]
Disclaimer: I speak not for “ardent liberals,”, but for myself, a centrist. If I seem leftish despite claiming centrism, it’s because I’m pushing against policies which have gone much too far to the right. There are some European countries where I might be arguing “rightist” positions against policies too leftist.
For the increasing income gap, I blame those who spend their money on the best bargains. With improved access to information over the years it has become easier to find the best possible price or research the best quality of whatever you are trying to buy. As a result, a smaller number businesses get a larger share of customers at the expense of those offering less of a bargain.
If people don’t like the income gap, they can help by shopping where prices are higher. Instead of buying all your books from Amazon, get them at Borders. Instead of movies from Netflix, rent from Blockbuster. Buy electronics from Circuit City instead of online.
If price is a problem, people can choose lower quality or less popular alternatives, which are often lower price. Why do people keep watching overpaid NBA basketball when supporting the WNBA would help equalize the income gap? Don’t buy your kids Harry Potter books or iPhones when there are cheaper or less trendy alternatives. Why insist on a well trained highly experience heart surgeon when there is a low budget doctor willing to give it a try.
A week or so ago Chris Matthews had the results of a poll of millionaires on Harball. The question was asked if they thought that they should be contributing more taxes (or some similar question). Over sixty percent of the millionaires said yes. That was refreshing. Of course not all millionaires are Conservatives and not all Conservatives are greedy, cold-hearted, and limited.
The government might want to think twice before they do away with Social Security. They can’t be taking that money out of people’s paychecks and using it for other purposes anymore.
And if the elderly don’t have Medicare, what do they do? Show up at the emergency rooms where the hospitals have to treat them? Who pays for that? All of us do. Before my sister’s death, she had to have one shot (I think it was every month) that costs thousands of dollars per shot. Thousands. And how will the elderly afford over $3,500 for room and board at an assisted care facility?
Actually, that study that you linked has been discredited due to bias, by none other than the original author. When you turn the bias around and ask conservatives questions that challenge their basic assumptions about how the world works, it turns out that they’re equally ignorant.
Meh.
It doesn’t beg two questions. It raises two questions.
Although you may be unintentionally correct here. You are in fact assuming things to be true which have not been proven, or are demonstrably false.
Carry on.
Because if you don’t they will spend their money somewhere else to explore for oil. Alberta made the mistake a couple of years ago when they raised their royalty rates because they thought the companies were getting too much of a break. Drilling went down and then went up in both British Columbia and Saskatchewan. Alberta was no longer as competitive. Worse, it looked unstable in the eyes of the companies. So, us Canadians would love it if you stopped tax breaks for oil exploration in the US. Please do. Please, please, please do. Really, I mean it.