A new report says the gap between the rich
and the poor is getting wider, and that the gap is biggest in the United States.
The problem, of course, isnâ??t new. Broadly speaking, the greater oneâ??s education and skills, the greater their value and income. The gap has been widening as the global economy increasingly rewards knowledge rather than physical skills.
How should this be solved? If incomes of the wealthy are redistributed to those with less, incentives to invest and take risk are stripped away.
On the other hand, many also argue for a moral responsibility to ensure that the poorest-paid receive at least the basics, such as health care and a decent home. Still others fear social unrest if gaps widen far enough.
What do you think?
The problem, of course, isnâ??t new. Broadly speaking, the greater oneâ??s education and skills, the greater their value and income. The gap has been widening as the global economy increasingly rewards knowledge rather than physical skills.
How should this be solved? If incomes of the wealthy are redistributed to those with less, incentives to invest and take risk are stripped away.
On the other hand, many also argue for a moral responsibility to ensure that the poorest-paid receive at least the basics, such as health care and a decent home. Still others fear social unrest if gaps widen far enough.
What do you think?
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On the subject of the Finanacial Gap. I am not supprised. Capitalism only works when there are checks and ballances. When we all look out for eachother and ensure that absolute power and/or absolute free rein does not happen like it has JUST happened with the Banks and Housing industries. This is not a Left or Right view, so please, don't assume I am talking from one side or the other. I just feel that we should not give hand-outs, but hand-ups. Those who can do the work, shall be rewarded, but those who cannot, should not be a financial drain on our economy for long.
OK, this is a bit extreme, but my point is that I do not see the wealthy exhibiting an attitude of social responsibility on ANY level unless forced to do so by the tax system. Greed is rampant. Profits are increased by laying off good workers and shipping jobs overseas to cut costs, not by the much-vaunted risk-taking that lower taxes are supposed to encourage. Risks are only taken by inventing new ways to cook the books so as to make the company appear more profitable than it actually is. Even the middle class, the mainstay of university degrees such as philosophy, English literature and history, will be forced to adopt the value of accumulating as much money as possible or face total annihilation.
I'm a member of the evil upper class. As my income has risen, so has my charitable giving. Yes I am putting more money in the bank than I used to, but I'm also giving more to charities (and no, Middle Class, not to the arts. My giving goes first to the church and then to help those in need, like the homeless. Or to provide resources for students in poor neighborhoods - check out donorschoose.org). How is that a bad thing??? Redistribute the wealth, take more from me in taxes, and guess what? I'll have less to give to charities, but I'll still give the same %. But percentages don't pay the bills, do they? If I have fewer real dollars to give, the charities I support are going to get less money. And don't tell me that only the wealthy have money to give. I gave roughly the same % of my income to charity back when I made 1/10th of what I make now, so don't tell me it can't be done. As Dave Ramsey says if you can't live on 90% of your income, you can't live on 100%.
Middle Class - what percentage of your income do you give to charity?
While I may vote for Obama, it troubles me that his tax returns show that it's only recently, when he began to make millions from his books, that he gave more to charity than just a few percentage points of his income. That seems hypocritical, doesn't it?
Read Revolutionary Wealth by Alvin and Heidi Toffler for a better understanding of the poverty issue.
58% of those in the lowest income bracket had moved to a higher bracket by 2005. 29% of those moved up two brackets.
42% of those in the middle bracket moved up a bracket from 1996 to 2005
30% of those in the top bracket fell to a lower bracket by 2005.
Source: http://www.treas.gov/offices/tax-policy/library/incomemobilitystudy03-08revise.pdf
There are tons of statistics to pore over in this report!
The point is that comparing the top income bracket to the bottom income bracket over a period of years will you tell nothing about what is actually happening to the individuals who make up that bracket.
A couple more things I want to point out. The idea that capitalism only works when there are checks and balances is ludicrous. First of all, capitalism in its pure form has never been attempted. There has always been a mixed economy with government influence. Capitalism is the most productive system there is because it guarantees that scarce resources with alternate uses will be put to their most efficient use.
Also, the idea that the current financial crisis was caused by capitalism is completely wrong. It was the government's cronies and their nationalized loan lenders of Freddie and Fannie that caused this to occur. Under a free market banks would not have made those sub-prime loans as the risks would not have been worth it.
We are quickly becoming socialistic and a welfare state. When an able bodied person can sit home and collect a check instead of working, we have a problem. There is no right to sit home and raise children. If you want children, then be prepared to earn income to support them. And don't waste time telling me about teen pregnancy and all that junk. People make decisions and decisions have consequences. Unprepared people have sex without thinking that you have sex and 1) you can have a child or 2) you can die. Dumb. Don't tell me birth control was not available, as there are plenty of places to get it for free. Don't tell me you can't take the pill because you smoke--if you want to smoke, stop having sex or find another form. Anyway, enough digression on too many children.
The problem we are facing now is the result of years of labor demanding wages that could not supported in our new world economy. When the buying public will not pay the price that is required to cover a rising cost of production, then the company must cut costs to maintain profit. Too many people seem to forget that companies do not exist to provide jobs. Companies exist to provide a return on investment for their owners. Absolutely nothing more. Companies need labor, but they only need labor at a rate that the same labor will support in the market. Gee, how ironic that the same group of people who used to be in the middle class and have seen their jobs go overseas to cheaper labor, helped push those jobs over there because they forced the price of American goods too high in comparison to the price of alternative goods.