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How to fight inequality

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Lawrence Summers is a professor and past president at Harvard. He was Treasury secretary from 1999 to 2001 and economic adviser to President Obama from 2009 through 2010.

The United States may be on course to becoming a “Downton Abbey” economy. There are valid causes for concern about inequality: sharp increases in the share of income going to the top 1 percent of earners, a rising share of income going to profits, stagnant real wages and a rising gap between productivity growth and growth in median family incomes. A generation ago, it could have been asserted that the economy’s overall growth rate was the dominant determinant of growth in middle-class incomes and progress in reducing poverty. This is no longer a plausible claim.

Issues associated with an increasingly unequal distribution of economic rewards are likely to be with us long after cyclical conditions have normalized and budget deficits have been addressed.

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Put an iron ball chain to every 1%:er (not the bikers but the wall streeters) so they dont fly tax paradise and tax em.

I doubt you'll achieve anything truly good without international cooperation, though tax policy change is a step for the better.

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lmao,

The 1% are the ones making laws, does anyone honestly think they will make laws, or tax policy that does not fit them?? my 5 y.o. knows that, but apparently op does not.

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not to mention if your goal is to take someone else's stuff, whatever that is. you are bigger problem than 1%.

1917 October revolution, bolshevics took everything from rich, than this "take away" mentality progressed, and they started robbing and looting, and also murdering, anyone who had anything, no matter how little, they were all called "kylak" and it became normal to rob anyone like that.

i'm pretty sure, they also started from "take money from rich, that they stole from us" and ended, everyone with anything is a fair game.

there s absolutely no reason to believe that it will be different anywhere else.

funny thing is, they achieved that equality, everyone was equally poor.

Edited by aztek
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You think the economy is in shambles now. just wait until the government steps in and tries(even though they won't because they are either part of the 1% or attached to their purse strings) take more than their fair share from the 1%.

let's just imagine half of the 1% pulling all of their money out of the stock market at one time.

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I got a crazy plan maybe the government could not take 50% of every ones dollars :innocent:

People would have so much more money.

Instead of arguing about who we should tax more, lets just tax everyone less. One cheer for "radical" thinking lol

Edited by spartan max2
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Just like "fixing" the Poor, if you "fix" the top 1% then there is still going to be a a top 1% and they will always be targets for "inequality".

Even if you take 20% more from the top 1% that is only going to be a small fraction of the money that is needed to balance the budget, much less help the Poor. How is collecting more money to reduce the Deficit going to help the poor?

In 2011 the US pulled in 1.1 Trillion from individual income taxes, of which the 1% paid about 25%. So that equals about 275 billion dollars. So even if we doubled their taxes, we'd only get about 300 billion more, while our Budget Deficit (2013) is around 680 billion. (It was 1.1 trillion in 2012). And lets be honest doubling the 1%s taxes is just not going to happen.

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When the poor earn somewhere between $10-25,000 a year versus the top one percent are billionaires, it comes to indicate the wide scale of rich vs. poor and middle class in America is the widest since the 1920s before the Great Depression. To resolve income inequality involves raising incomes of the non-rich and ensuring the rich pay a fair share of taxes to fund public social services like welfare, food stamps and disability. America's rich pay a lower percentage tax rate than middle class people and was a fixed rate from congressional actions during the Reagan and two Bushes administrations. Mitt Romney goes on and on in his failed 2012 presidential campaign on the rich are "job creators" and corporations "are people", and opposed the "47% are takers" of any government assistance. He views the poor as a burden on society and expects income inequality to be resolved by lower-income people to simply "get a job."

Instead of the war of poverty, what we have is pure class warfare of "soaking the rich" in favor of corporations, banks and other huge sources of wealth, because the US government falsely believed in giving the richest one percent a low income tax was good for creating business, the taxation rates for non-rich Americans remain much higher than what the rich holding more personal income are paying. This is ridiculous...the feds focus more on Corporate welfare and getting soft on the rich, instead of general welfare and bashing the poor (the Welfare Reform Act of the 1990s was suppose to put pressure on welfare recipients to find jobs they can find).

Poor people are labeled and vilified by some conservative critics and Republican political officials for their assumed "laziness" is why they are poor and income inequality, they claim, are liberal or Democrat opinions aimed against corporations and "class warfare" against the rich elite. Verbally abusive poor-bashing tactics made many of us ignored the real deal of income inequality and poverty goes on underneath. Income inequality can be easily resolved with strategic propositions to increase funding on anti-poverty initiatives and job creation programs. And making the richest pay a somehow higher tax rate or equivalent to the amount the middle-class pays (20-25% of annual taxable income) will send a message that the rich don't have to be treated too special from everyone else.

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Poor people are labeled and vilified by some conservative critics and Republican political officials for their assumed "laziness" is why they are poor and income inequality, they claim, are liberal or Democrat opinions aimed against corporations and "class warfare" against the rich elite. Verbally abusive poor-bashing tactics made many of us ignored the real deal of income inequality and poverty goes on underneath. Income inequality can be easily resolved with strategic propositions to increase funding on anti-poverty initiatives and job creation programs. And making the richest pay a somehow higher tax rate or equivalent to the amount the middle-class pays (20-25% of annual taxable income) will send a message that the rich don't have to be treated too special from everyone else.

I still don't see how taking an extra 10% from the rich and giving an extra 10% to the poor is going to change anything. The ratio of inequality is not going to change that much. What is needed is for the Poor to get education. Just look at statisitics on who makes the money in the US. Those with an associates degree are well above the poverty line. Those who dropped out of HS or who did not pass 9th grade are chronically under the poverty line. Giving all those dropouts a handout for free is not going to get them out of poverty. It is going to perpetuate poverty. Education is what is needed. The FedGov should probably set up hundreds of Federally Funded 2 year colleges where the underprivilaged can go for free, or almost for free. I feel that everyone should earn their government money (Except maybe Social Security, because that is actually supposed to be your money.), but I also feel that if students went full time, that would be the equivalent to working.

HEY KIDS!!!! Stay in school. Go to community college. Don't be a poverty statistic.

http://trends.colleg...tion-level-2008

Honest Qurestion: How does someone having a LOT of money make someone poorer? It would seem to me that it is inflation that makes people poorer.

Edited by DieChecker
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When the poor earn somewhere between $10-25,000 a year versus the top one percent are billionaires, it comes to indicate the wide scale of rich vs. poor and middle class in America is the widest since the 1920s before the Great Depression. To resolve income inequality involves raising incomes of the non-rich and ensuring the rich pay a fair share of taxes to fund public social services like welfare, food stamps and disability. America's rich pay a lower percentage tax rate than middle class people and was a fixed rate from congressional actions during the Reagan and two Bushes administrations. Mitt Romney goes on and on in his failed 2012 presidential campaign on the rich are "job creators" and corporations "are people", and opposed the "47% are takers" of any government assistance. He views the poor as a burden on society and expects income inequality to be resolved by lower-income people to simply "get a job."

Instead of the war of poverty, what we have is pure class warfare of "soaking the rich" in favor of corporations, banks and other huge sources of wealth, because the US government falsely believed in giving the richest one percent a low income tax was good for creating business, the taxation rates for non-rich Americans remain much higher than what the rich holding more personal income are paying. This is ridiculous...the feds focus more on Corporate welfare and getting soft on the rich, instead of general welfare and bashing the poor (the Welfare Reform Act of the 1990s was suppose to put pressure on welfare recipients to find jobs they can find).

Poor people are labeled and vilified by some conservative critics and Republican political officials for their assumed "laziness" is why they are poor and income inequality, they claim, are liberal or Democrat opinions aimed against corporations and "class warfare" against the rich elite. Verbally abusive poor-bashing tactics made many of us ignored the real deal of income inequality and poverty goes on underneath. Income inequality can be easily resolved with strategic propositions to increase funding on anti-poverty initiatives and job creation programs. And making the richest pay a somehow higher tax rate or equivalent to the amount the middle-class pays (20-25% of annual taxable income) will send a message that the rich don't have to be treated too special from everyone else.

Reagan and two Bushes because we didn't have 8 years of Clinton mixed up in there and we haven't had 5+ years of Obama.

you do realize during the last Bush administration the rich took home 60% more per year but during Obama they are taking home 120% more? welcome to the liberal utopia!

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not to mention if your goal is to take someone else's stuff, whatever that is. you are bigger problem than 1%.

1917 October revolution, bolshevics took everything from rich, than this "take away" mentality progressed, and they started robbing and looting, and also murdering, anyone who had anything, no matter how little, they were all called "kylak" and it became normal to rob anyone like that.

i'm pretty sure, they also started from "take money from rich, that they stole from us" and ended, everyone with anything is a fair game.

there s absolutely no reason to believe that it will be different anywhere else.

funny thing is, they achieved that equality, everyone was equally poor.

What you say is true, but that all happened because Tsar Nicholas 2 had the "let them eat cake" attitude or mentality with his people. With enough people to revolt and overpower the government, being hungry and living in poor conditions for a long time tends to make people angry and take desperate measures. There are many lessons about that in human history that we should all pay attention too.

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Purifier, you said it better than me.

Ultimately if gross social inequality persists for to long history tells us that the poor, who ultimately make up the bulk of the doers, cut off the heads of the rich. The introduction of various social provisions was a survival mechanism of the rich after the great depression - to maintain the status quo. The rich seem to have forgotten the lessons of their ancestors.

Solve it or suffer is what I say.

Br Cornelius

Edited by Br Cornelius
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I still don't see how taking an extra 10% from the rich and giving an extra 10% to the poor is going to change anything. The ratio of inequality is not going to change that much. What is needed is for the Poor to get education. Just look at statisitics on who makes the money in the US. Those with an associates degree are well above the poverty line. Those who dropped out of HS or who did not pass 9th grade are chronically under the poverty line. Giving all those dropouts a handout for free is not going to get them out of poverty. It is going to perpetuate poverty. Education is what is needed. The FedGov should probably set up hundreds of Federally Funded 2 year colleges where the underprivilaged can go for free, or almost for free. I feel that everyone should earn their government money (Except maybe Social Security, because that is actually supposed to be your money.), but I also feel that if students went full time, that would be the equivalent to working.

HEY KIDS!!!! Stay in school. Go to community college. Don't be a poverty statistic.

http://trends.colleg...tion-level-2008

Honest Qurestion: How does someone having a LOT of money make someone poorer? It would seem to me that it is inflation that makes people poorer.

Real inflation, not the measured one, has been fuelled by having so much "investment" money sloshing around the system that everything has become relatively more expensive. The Dollar plunges as the real value of the currency on international stage has gone down. this directly effects poor people because they rely on imports for much of what they need.

The reality is that since the Reagan era real wages of the poor and middle class have flatlined, causing people to accumulate huge debt burdens. Over the same time the rich have become progressively more rich, which has had the knock on effect of pricing the poor out of investing in wealth generating assets.

Ultimately the measure of this, which hides behind the stats, is that most of the average population now need 2-3 jobs to survive where as previously a single job supported a whole family. At the same time personal indebtedness is at the highest rate that it ever has been. These are all symptoms of a system based on wealth inequality and ultimately as more people are pushed into this systemic poverty trap tolerance for politicans which have facilitated it will grow very short.

America has been mythologising to itself that this is the natural order of things, but the reality of personal suffering to the millions of poor Americans is starting to punch through the illusion.

Br Cornelius

Edited by Br Cornelius
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The best way to fight inequality is to teach people how to fish rather than give them the fish. Because there will be times that you can’t always be there to give them fish or you just won’t have the fish to give. You have to instill dignity and self-reliance. You can’t do that if people are on the dole. And you can’t force them to learn and if they don’t, it’s not anyone else’s fault or responsibility. Likewise, if you do not know how to manage money, you will never have it. People need to learn how to manage their funds wisely. People have to learn to sink or swim all on their own. Giving people money that they haven’t earned does not instill using money wisely. Wealth redistribution is indeed effective. It is effective in robbing people of what is theirs. That is not only the wealth of the rich (and of the nation) but the dignity of both the rich and poor. It squanders that wealth and makes everyone equally poor. It encourages dependency. Nothing will have changed. The wealthy still have the skills to manage money will eventually make more money and the poor will then get poorer because the wealthy will just not have as much wealth as before because their base has been reduced. And in turn, that makes a nation overall poorer. Wealth can be a renewable or nonrenewable resource. It just depends on how it is used. Redistribution makes it finite or one way. Reinvestment is what makes money grow but redistribution is not reinvestment. Redistribution destroys wealth. Why would anyone want to destroy wealth?

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The best way to fight inequality is to teach people how to fish rather than give them the fish. Because there will be times that you can't always be there to give them fish or you just won't have the fish to give. You have to instill dignity and self-reliance. You can't do that if people are on the dole. And you can't force them to learn and if they don't, it's not anyone else's fault or responsibility. Likewise, if you do not know how to manage money, you will never have it. People need to learn how to manage their funds wisely. People have to learn to sink or swim all on their own. Giving people money that they haven't earned does not instill using money wisely. Wealth redistribution is indeed effective. It is effective in robbing people of what is theirs. That is not only the wealth of the rich (and of the nation) but the dignity of both the rich and poor. It squanders that wealth and makes everyone equally poor. It encourages dependency. Nothing will have changed. The wealthy still have the skills to manage money will eventually make more money and the poor will then get poorer because the wealthy will just not have as much wealth as before because their base has been reduced. And in turn, that makes a nation overall poorer. Wealth can be a renewable or nonrenewable resource. It just depends on how it is used. Redistribution makes it finite or one way. Reinvestment is what makes money grow but redistribution is not reinvestment. Redistribution destroys wealth. Why would anyone want to destroy wealth?

nice hollow phrase if by law the fishing grounds are divided up by 5% of the population.

Yes, redistributing existing wealth gets us nowhere, but redistributing the means to create wealth might.

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i'm pretty sure, they also started from "take money from rich, that they stole from us" and ended, everyone with anything is a fair game.

there s absolutely no reason to believe that it will be different anywhere else.

That’s what I’d like to hear from the resident Socialists. And that is where is the limit to this redistribution? Every time I confront one of them with that question (one of many) they can’t answer. It wouldn’t be so bad if they were at least honest.

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Yet as the rich got richer - investment in domestic productivity declined. Again it is an act of rhetoric to imagine that those of wealth will suddenly rediscover a social conscience and actually give a **** about America. They abandoned your rust belt for greener pastures abroad - what makes you think they are ever coming back to revive your economy.

Money naturally flows to the place where it can make more money and unfortunately unless you want to compete on a like for like basis with India/China/Indonesia that is a systemic problem which needs intervention to overcome.

Br Cornelius

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That's what I'd like to hear from the resident Socialists. And that is where is the limit to this redistribution? Every time I confront one of them with that question (one of many) they can't answer. It wouldn't be so bad if they were at least honest.

You are fixated on redistribution. I would like to see the American Government intervene to protect its own domestic productivity base which has flown abroad. It won't come back by itself yet the current crop of politicans have done everything in their power to protect those who have destroyed your manufacturing base. Who's interests are they looking after ?

Your men of business are running rings around you and your just lapping it up and asking for another whipping.

My motto is a fair wage for a fair days work, not redistribution.

Br Cornelius

Edited by Br Cornelius
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nice hollow phrase if by law the fishing grounds are divided up by 5% of the population.

That understanding is only hollow to you because it matches what’s between your ears. You’ve totally misconstrued the point. But that’s ok because it drives the point home.

Yes, redistributing existing wealth gets us nowhere, but redistributing the means to create wealth might.

No need to redistribute the means. Stand up, face forward. Now raise your arms half way up so that your forearms are parallel to the floor. Now look down at your hands. There are the means.

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not to mention if your goal is to take someone else's stuff, whatever that is. you are bigger problem than 1%.

1917 October revolution, bolshevics took everything from rich, than this "take away" mentality progressed, and they started robbing and looting, and also murdering, anyone who had anything, no matter how little, they were all called "kylak" and it became normal to rob anyone like that.

i'm pretty sure, they also started from "take money from rich, that they stole from us" and ended, everyone with anything is a fair game.

there s absolutely no reason to believe that it will be different anywhere else.

funny thing is, they achieved that equality, everyone was equally poor.

But I doubt increasing taxes for the rich 1% wouldn't bring similiar results? It doesn't here at least.

oh, but maybe USA is different.

Edited by Mikko-kun

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That understanding is only hollow to you because it matches what's between your ears. You've totally misconstrued the point. But that's ok because it drives the point home.

No need to redistribute the means. Stand up, face forward. Now raise your arms half way up so that your forearms are parallel to the floor. Now look down at your hands. There are the means.

I knew that you could make the miraculous multiplication of wine and bread! Let m\e come by, kiss your feet and adore you!

It seems that, besides a total lack of understanding of political systems you lack a total understanding of the economy.... which sure explains half of the "brilliant" ideas you spout around here.

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Yet as the rich got richer

The rich will always get richer. That’s a sign of a healthy society.

- investment in domestic productivity declined.

Things happen for a reason. Do you ever try to determine why or is it too convenient to just blame the rich?

Again it is an act of rhetoric to imagine that those of wealth will suddenly rediscover a social conscience and actually give a **** about America.

I think that the wealthy give more of a damn about America than the poor. But what do you mean with “social conscience”? Sounds like you mean wealth redistribution. “Social conscience” goes two ways here. Don’t the poor have a responsibility to earn their keep? The wealthy give more than anyone else to charity, so they don’t suddenly rediscover anything.

They abandoned your rust belt for greener pastures abroad - what makes you think they are ever coming back to revive your economy.

Again, do you ever wonder why? Between high taxes and unions, they cannot make a profit that they can live with and that is the driving force. If it costs more to make something than sell it, business will go someplace else or it will cease to exist. Business in not in business to provide for the people; it is in business to provide opportunity and advantage for the producer. Once that basic tenet is understood, then everyone can take advantage.

Money naturally flows to the place where it can make more money

Gee, how ‘bout that! And it’s usually the rich that determine that. So maybe they have this “Social conscience”?

and unfortunately unless you want to compete on a like for like basis with India/China/Indonesia that is a systemic problem which needs intervention to overcome.

That’s not a problem. That is the free market. The fact is that manufacturing is a low wage job. That’s not a systematic problem, it is an intrinsic aspect. If you want to improve wages, then everyone needs to become entrepreneurs or self-employed. Everyone will have to learn how to work as hard as the wealthy have.

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They obviously did make a profit before they upped sticks, but they obviously prefer to live by the benefits of the American infrastructure whilst protecting their assets from supporting it. there are relatively simple answers to this in that if a company like Apple wants to manufacture its goods in China then it should pay import tariffs like any other foreign goods coming into America. This would protect the American economy from outsourcing.

Manufacturing will always be the bedrock of any countries economy (and what made the USA great) - we can't all live in the service sector as Yoga teachers and personal trainers.

Most people are not entrepreneurs because it takes special personal skills which most people do not have. The simple fact is that of those who try 70% will fail and will generally leave themselves in considerable debt as a consequence. The only people who profit from these entrepreneurs are the banks who collect whether they win or fail. That unfortunately is not a decision that most people are prepared to take with the welfare of their family.

Ultimately though, it takes money to make money (which is the very definition of capitalism) and so if you are dirt poor it is all but impossible to make a successful business from scratch. That applies to a hell of a lot of your fellow citizens at this stage.

Nothing is quite as simple as your pat platitudes would have us believe.

Br Cornelius

Edited by Br Cornelius
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They obviously did make a profit before they upped sticks, but they obviously prefer to live by the benefits of the American infrastructure whilst protecting their assets from supporting it.

Manufacturing will always be the bedrock of any countries economy (and what made the USA great) - we can't all live in the service sector as Yoga teachers and personal trainers.

Most people are not entrepreneurs because it takes special personal skills which most people do not have. The simple fact is that of those who try 70% will fail and will generally leave themselves in considerable debt as a consequence. The only people who profit from these entrepreneurs are the banks who collect whether they win or fail. That unfortunately is not a decision that most people are prepared to take with the welfare of their family.

Ultimately though, it takes money to make money (which is the very definition of capitalism) and so if you are dirt poor it is all but impossible to make a successful business from scratch. That applies to a hell of a lot of your fellow citizens at this stage.

Nothing is quite as simple as your pat platitudes would have us believe.

Br Cornelius

Well, there were a few historical exceptions, the latest in the 16th and 17th century. Most of Europe was more or less in the same situation as the USA is right now, the resources were divided and there was no place to which the upcoming could aspire. More than that, most rivers were polluted, fish and game near to depleted.

At that point the discovery of a certain Mr. Columbus came just in time: lots of land inhabited by some primitives that could be easily displaced from it. That provided the vent Europe needed to get rid of its ambitious and maladjusted. And that created the illusion that the sky was the limit and if you worked hard enough you could make it with out stealing (except the property of the primitives, of course). And that illusion is what those looking with nostalgia at the past are fostering ignoring that there is hardly anything left to take from the primitives.

The situation has changed, now the vent is blocked because the resources in the new lands are divided and are ending up, piece by piece, in the hands of of the upper elite and the resources are being depleted. History is repeating itself.

And the recipes of the upper classes are also repeating himself: take influence in the government to insure privileges. And the best helper for the upper classes is some clerics that preach that all is as their god mandates it, except, of course, whatever the lower classes think is their pursuit of happiness.

Edited by questionmark
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The new NeoLiberal religion which has unfortunately swept the world.

Br Cornelius

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