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Thread: The American economy is perilously fragile. Concentration of wealth is to blame

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    Quote Originally Posted by BidenPresident View Post
    Policymakers and the media are paying too much attention to how quickly the US economy will emerge from the pandemic-induced recession, and not nearly enough to the nation’s deeper structural problem – the huge imbalance of wealth that could enfeeble the economy for years.

    Seventy per cent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.

    https://www.theguardian.com/commenti...n-wealth-blame
    they pay 60 of all taxes

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    Quote Originally Posted by dukkha View Post
    they pay 60 of all taxes
    Never saw those stats. Neither have you.

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    Quote Originally Posted by cawacko View Post
    I beg to differ. Investment powers economic growth. I know it's taught in school and all Keynesian's believe it's consumption that drives growth but it's a mistaken belief.

    I'm no economist so there are plenty of people who can make this argument better than I (and it has nothing to do with Trump. These are economic fundamentals that have been around well before him.) We need production to consume. Consumption is a consequence of production. And investment powers production. And rich people help fund (often risky) ventures/ideas/products that increase productivity and quality of life.

    It's not simple as saying redistribute and let others consume; rinse, wash and repeat
    right. we need both investing for jobs/GDP and consumption to buy the stuff.

    Income inequality is not a problem - in fact the Dems look at the rich as a cash cow to tax

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    Quote Originally Posted by BidenPresident View Post
    Policymakers and the media are paying too much attention to how quickly the US economy will emerge from the pandemic-induced recession, and not nearly enough to the nation’s deeper structural problem – the huge imbalance of wealth that could enfeeble the economy for years.

    Seventy per cent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.

    https://www.theguardian.com/commenti...n-wealth-blame
    It wasn't perilously fragile in Dec. 2019...was it?

    WHAT'S CHANGED? OH YEAH...DUNCE-O-CRATS IN CHARGE...
    TRUMP WILL TAKE FORTY STATES...UNLESS THE SAME IDIOTS WHO BROUGHT US THE 2020 DUNCE-O-CRAT IOWA CLUSTERFUCK CONTINUE THEIR SEDITIOUS ACTIVITIES...THEN HE WILL WIN EVEN MORE ..UNLESS THE RED CHINESE AND DNC COLLUDE, USE A PANDEMIC, AND THEN THE DEMOCRATS VIOLATE ARTICLE II OF THE CONSTITUTION, TO FACILLITATE MILLIONS OF ILLEGAL, UNVETTED, MAIL IN BALLOTS IN THE DARK OF NIGHT..


    De Oppresso Liber

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    Quote Originally Posted by Concart View Post
    What are they investing in? Nothing. They are buying and selling stocks. That isn't an investment. It's a bet. The purchase of a stock produces nothing.
    They invest in businesses, start-ups, venture capital funds etc. They fund Universities, they fund medical centers, research institutions etc. I wouldn't call that nothing.

  6. The Following User Says Thank You to cawacko For This Post:

    dukkha (06-24-2021)

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    Quote Originally Posted by cawacko View Post
    They invest in businesses, start-ups, venture capital funds etc. They fund Universities, they fund medical centers, research institutions etc. I wouldn't call that nothing.
    No, trading stock does exactly none of that. And that's primarily where they are investing.

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    Quote Originally Posted by cawacko View Post
    Consumption is a consequence of production
    bullshit, consumption is a consequence of DEMAND, not production...........you've got it backwards sonny

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    Quote Originally Posted by Concart View Post
    No, trading stock does exactly none of that. And that's primarily where they are investing.
    You are correct that people with money generally don't leave it all in a checking account. And the stock market is one of the places that they put it. But it's not the only place. And access to capital markets is what gives so many businesses the funds they need to grow, which in turn grows our economy. So that's not a bad thing.

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    Quote Originally Posted by cawacko View Post
    And access to capital markets is what gives so many businesses the funds they need to grow,
    much more important than access to capitol is DEMAND for the product

    building plants to produce goods no one can afford is a total waste of capital

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    Quote Originally Posted by cawacko View Post
    You are correct that people with money generally don't leave it all in a checking account. And the stock market is one of the places that they put it. But it's not the only place. And access to capital markets is what gives so many businesses the funds they need to grow, which in turn grows our economy. So that's not a bad thing.
    No, it isn't. Unfortunately that kind of spending only makes up 53% of the top earners incomes. That isn't nearly enough to sustain growth, given how much more money that group has. That's why the wage gap is killing the economy.

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    Quote Originally Posted by cawacko View Post
    They invest in businesses, start-ups, venture capital funds etc. They fund Universities, they fund medical centers, research institutions etc. I wouldn't call that nothing.
    What medical center did Buffett fund? I see you prefer abstraction.

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    That's the only problem Biden hasn't already solved. He definitely solved the take all power from Trumfucks problem.

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    Aggregate demand, consumption and debt
    Conservative researchers have argued that income inequality is not significant because consumption, rather than income should be the measure of inequality, and inequality of consumption is less extreme than inequality of income in the US. According to Johnson, Smeeding, and Tory, consumption inequality was actually lower in 2001 than it was in 1986.[55][56] The debate is summarized in "The Hidden Prosperity of the Poor" by journalist Thomas B. Edsall.[57] Other studies have not found consumption inequality less dramatic than household income inequality,[58][59] and the CBO's study found consumption data not "adequately" capturing "consumption by high-income households" as it does their income, though it did agree that household consumption numbers show more equal distribution than household income.[60]

    Others dispute the importance of consumption over income, pointing out that if middle and lower income are consuming more than they earn it is because they are saving less or going deeper into debt.[61] Income inequality has been the driving factor in the growing household debt,[58][62] as high earners bid up the price of real estate and middle income earners go deeper into debt trying to maintain what once was a middle class lifestyle.[63]

    Central Banking economist Raghuram Rajan argues that "systematic economic inequalities, within the United States and around the world, have created deep financial 'fault lines' that have made [financial] crises more likely to happen than in the past" – the Financial crisis of 2007–08 being the most recent example.[64] To compensate for stagnating and declining purchasing power, political pressure has developed to extend easier credit to the lower and middle income earners – particularly to buy homes – and easier credit in general to keep unemployment rates low. This has given the American economy a tendency to go "from bubble to bubble" fueled by unsustainable monetary stimulation.[65]

    https://en.wikipedia.org/wiki/Effect...mic_inequality

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    Top incomes have grown MUCH faster than lower incomes since 1980. The wealth gap has increased even faster.

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    start losing the rich adn taxes are not going to meet projected receipts
    I don't know how you were diverted / You were perverted too
    I don't know how you were inverted / No one alerted you

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