Economist awake - finally

[merrylander]

http://www.washingtonpost.com/busine...d86_story.html

No shit Sherlock - haven't I been saying this for the last three years.

[Dondilion]

Broadly speaking income inequality per se is not the problem.

The problem is disposable income at the bottom.

[merrylander]

Originally Posted by Dondilion

Broadly speaking income inequality per se is not the problem.

The problem is disposable income at the bottom.

But incomes are inequal simply because the top 5% is getting most of it, but I suppose that is happening because the top 5% are greedy.

Whatever in a consumer driven economy if you beggar the consumer you kill the economy. Hey being no longer in the workforce and at the mercy of those greedy Randians I really don't give a Tinker's Dam. Actually because my pension has kept pace we are in the position to take advantage of all the sales caused by the lack of consumers.

[Dondilion]

What if the cost of living were low, would income inequality really matter?

[4-2-7]

Originally Posted by Dondilion

What if the cost of living were low, would income inequality really matter?

The cost of living is low! I know that sounds weird right?

When we look at economics we have to look at who is driving it.

It doesn't take more labor to bake a loaf of bread today as it did fifty years ago. What has made the cost of bread rise in cost in those fifty years. If anything it should cost less with technology.

By not having a currency pegged to something with intrinsic value ie:"Money" all hell breaks loose. Something that can't be produced out of thin air that has value.

Since the USD is not pegged to anything but a promise to pay lol Fiat Currency, A note of a promise to pay is all the USD is. It is not money.
Nothing stops the printing of currency so the presses run and run. But there is a problem to doing this. It's a dilution of the currency supply meaning it reduces the value of the currency in circulation. The value of your saved dollars are not the same as when you put them in the bank. In fact the interest earned does not keep up with this. So you put your dollar in and in short time it's only worth 50% it's value at deposit.



It's funny, not really Most have no clue of what currency is, how it's born and who is doing it.

[icenine]

Originally Posted by 4-2-7

The cost of living is low! I know that sounds weird right?

When we look at economics we have to look at who is driving it.

It doesn't take more labor to bake a loaf of bread today as it did fifty years ago. What has made the cost of bread rise in cost in those fifty years. If anything it should cost less with technology.

By not having a currency pegged to something with intrinsic value ie:"Money" all hell breaks loose. Something that can't be produced out of thin air that has value.

Since the USD is not pegged to anything but a promise to pay lol Fiat Currency, A note of a promise to pay is all the USD is. It is not money.
Nothing stops the printing of currency so the presses run and run. But there is a problem to doing this. It's a dilution of the currency supply meaning it reduces the value of the currency in circulation. The value of your saved dollars are not the same as when you put them in the bank. In fact the interest earned does not keep up with this. So you put your dollar in and in short time it's only worth 50% it's value at deposit.



It's funny, not really Most have no clue of what currency is, how it's born and who is doing it.

the gold standard has nothing to do with our current economic fragility. If you were to actually peg every dollar to a ounce of gold in a vault you would take so much money of circulation that the mother of all depressions would soon take place because of the deflation such a move would cause.


Gold is a fiat too if you really think about it.

[icenine]

Originally Posted by Dondilion

What if the cost of living were low, would income inequality really matter?

you are sort of describing the current economy.

You can go to Walmart and buy blue jeans for 10 bucks.

economy still sucks. You need consumers buying goods and services like we were in the 1990s.

Internet,automation,outsourcing and greed are making a perfect storm.

[4-2-7]

Originally Posted by Dondilion

Broadly speaking income inequality per se is not the problem.

The problem is disposable income at the bottom.

Correct

And If we were not getting taxed to death funding a behemoth government and al there cushy retirement packages we might have some cash to spend.

Salaries are not keeping up with Inflation and Taxation.

[bobabode]

Originally Posted by 4-2-7

Correct

And If we were not getting taxed to death funding a behemoth government and al there cushy retirement packages we might have some cash to spend.

Salaries are not keeping up with Inflation and Taxation.

You aren't one of those 'Don't tread on me' guys with the eastern Diamondback rattler on a yellow field flag wavers, are ya?

BTW Welcome to PC.

[Dondilion]

Welcome 4-2-7!

I hope we can distill and ventilate this issue. I believe we are too fixated
on income inequality. Is there any way that average joe can get a livable
wage even in an highly skewed income society?

I did not see your post before this. Thanks for some serious thoughts.
The bigger economic heads (relative to mine) on the site will soon jump in.