Thread: The Real Causes of Income Inequality

Originally Posted by AkDiesel

What would be said if...

The Great Depression of the 30's never came to an end, that it still is, and that what we think as a boom is nothing more than a house of cards.

Who said that the Great Depression ended?

I get what your saying, yet the same could be said it never happened as it was created from a house of cards.

It happened, but the sad deal is that the Government under FDR made sure that it did not go away.

Many think that after WW2 that there was a boom and then down turn every 5-10 years but what has been going on is a building of the indebtedness of the American Public like no other time in History.

Before people saved money to buy some thing and credit was little used by the average person. Today it is ALL About the Credit line and if one does not have one then how can one live?

We see where we are today with the Governments Credit line of 14.5 T... how and who is to pay this ever increasing line of credit?

Would a bank or any one else loan any one that kind of money with out some thing to back the loan?

We the people as a whole have brought this on to our selves in the drive to live and play like the rich... oh I can do the payments so I will do it now and worry about the payments later..

Originally Posted by AkDiesel

It happened, but the sad deal is that the Government under FDR made sure that it did not go away.

Many think that after WW2 that there was a boom and then down turn every 5-10 years but what has been going on is a building of the indebtedness of the American Public like no other time in History.

Before people saved money to buy some thing and credit was little used by the average person. Today it is ALL About the Credit line and if one does not have one then how can one live?

We see where we are today with the Governments Credit line of 14.5 T... how and who is to pay this ever increasing line of credit?

Would a bank or any one else loan any one that kind of money with out some thing to back the loan?

We the people as a whole have brought this on to our selves in the drive to live and play like the rich... oh I can do the payments so I will do it now and worry about the payments later..

Did it actually begin with FDR? Hell the FED was printing like mad before the depression. Thus you see the largest run ups on Wall St prior to the depression. When the FED prints there is a reason ... like right now. Hmmm and they were printing before the bubble.

Debt is a done deal now ... we carry a trade deficit ... we are consumers of foreign products. Thats credit and that seals the future. Why do you suppose the FED is printing so madly right now and getting away with it? Recession from a trade deficit (credit), got to boost those few exports we have and slow the imports.

Originally Posted by michael h

Did it actually begin with FDR? Hell the FED was printing like mad before the depression. Thus you see the largest run ups on Wall St prior to the depression. When the FED prints there is a reason ... like right now. Hmmm and they were printing before the bubble.

Debt is a done deal now ... we carry a trade deficit ... we are consumers of foreign products. Thats credit and that seals the future. Why do you suppose the FED is printing so madly right now and getting away with it? Recession from a trade deficit (credit), got to boost those few exports we have and slow the imports.

Do you really think this country has much of a future?

Originally Posted by 9aces

Do you really think this country has much of a future?

Nope, I think all western economies will need a very long and improbable adjustment to "not making shit". Adjustments will be made for austerity ... which will help little in the long run and hurt like a bastard in the short run. We unfortunately live in a country with a bloated defense budget as we envision ourselves as proselytizers for democracy ... which will remain a drain and squash whats left of the future. If by chance a competitive industry can be found to invest in ... the capital should be there from the imbalance in trade.

The future is a future of less prosperity ... but that's the pessimist in me evaluating the causes of our current conditions and a lack of desire or will to fix the problem.

Originally Posted by 9aces

Do you really think this country has much of a future?

As much as any other country in the world. We won't cease to exist as a major economic power or morally driven country even with the excesses of the left wing branch of the democratic party or the right wing branch of the republican party.

Originally Posted by goober

Originally Posted by Mahasattva
...

Are you saying that it doesn't matter if you have $5 to your name or $5,000,000, you will not treat that last dollar differently?

Did I ever say that Goober? In which of my two posts above did I make or even imply any such thing?

You may not be aware of it, because I know you struggle with the actual meaning of the big words you cut and paste so deftly.

And here comes the arrogant intellectual on parade again.

But treating money differently if you have $5,000,000 than if you have $5, IS the theory of Marginal Utility applied to wealth, which you claim does not apply to wealth.

:rolleyes: That’s right Goober the theory of marginal utility does not apply to wealth. You can attempt to twist the theory and try and apply it to wealth, which is what Galbraith did and what you continue to regurgitate for us on the forum. Like Galbraith, you are trying to assert that there is some theoretically perfect level of income, not too much and not too little that would magically make economics work more efficiently. More efficiently for whom is what I’d like to know. You, like Galbraith before you and the few others on the forum who share your ideology, presume to know what this perfect level of income happens to be and seek to create policies and practices that, in your omniscient wisdom believe, would bring about this level of income for as many Americans as you can force it upon. So much for the classically liberal and democratic ideal of private property rights.

You would have us believe that it would be better for a person to be financially devastated by a loss of x number of dollars, rather than be in the position to withstand a financial loss of a number greater than x number of dollars. You along with the rest of the anointed would be more than happy to set the value of x, presuming to know the most ideal value that x should be set for each of us. And this presumption is really the heart of your hubris. The arrogance that allows you to believe that you or any human being, if they are of the correct ideological bent, has the expertise and knowledge to set the value of x is a big part of what blinds you to reality. You continue to bring up the Reagan tax cuts and assert that is why to country is in trouble, yet when it is pointed out that when the Reagan tax cuts were enacted revenue increased for the government. With one exception, each year Reagan was in office, tax revenue to the federal government increased. The one year that tax revenue did not increase from the proceeding year, the government still took in more than under Carter. Unfortunately government spending increased more each year. Those are the basic facts and you neither own them or can change them.

I noticed you could not use the quote function to highlight me actually saying or implying what you accuse me. I also noticed that you have yet to actually respond to the substance of either of my posts, but that‘s what I expected.

When you(and the lame brains that chimed in with you) have been making this claim that Marginal Utility does not apply to wealth or money,

That’s right goober the theory of the marginal utility of goods and services does not apply to wealth or money and a theory about the subjective relationship people have with the utility of this or that good or service does not support your leftist-Progressive delusional tax policies.

you have been saying that no matter how much money a person has, they will regard the utility of that last dollar exactly the same as the utility of the first dollar.

Bullshit Goober, that is not what I said nor implied.

Yeah, that's what you've been arguing.

False Goober, that is not what I have been arguing. Perhaps it a little too nuanced for you to grasp.

Well, not so much arguing as demonstrating that the science of economics is a subject that you have yet to master, or even understand the basic principles.

Your baseless insult is noted as the typical non-response we have come to expect from you. You couldn’t even explain your accusation of intellectual dishonesty. You’ve got nothing Goober. You are no longer “becoming” a cartoon, you’ve become the cartoon.

What is so very funny is you actually take yourself seriously.

tashi deleks,

M

Originally Posted by JohnLocke

Originally Posted by Mahasattva
You are far more interested in acting the condescending intellectual above the fray.

Liberals always assume they are the smartest people in the room. You are hitting on somethng Rush Limbaugh has said for years. He repeatedly points out the facts are not on their side but their hubris makes them think it is. They honestly think non-liberals are ignorant red necks, who hold onto their bible and guns too tightly.

Well when all you can do is argue against straw men, might as well create straw men opponents.

When you confront them with the facts they just cannot believe a non-Liberal thinks the facts are on their side. They are shocked, cognitive dissonance is obvious.

Actually I think they have their own facts. They keep them in a little box and every once in a while they’ll take them out and play with them. Liberals are quite entertained by their own little box of facts. They think they are very cleaver and so special to have the box of facts. Only a wise and properly indoctrinated little elitist would be awarded the box of facts. It is the secular religion that is invoked and bowed to daily by the media and cultural elites at your nearest leftist cable channel or on one of the Great Trinity ABC, CBS, NBC. Lets not forget PBS, which is not too bad for government sponsored entertainment. Well, there is the need for the circus and food stamps are so much more convenient than bread.

I recall such an experience when I debated a couple of Liberals from Massachusetts, but I repeat myself. We were talking about the Republican Revolution of 1994 and how they drove the balanced budgets. Their desire to spin this was such that they pretended it was Al Gore who cast the tie breaking vote to raise taxes more than ever in the history of the world as the driver for balanced budgets and it was the Republicans who were opposed to balancing the budget.

When I was able to recall the facts of the matter with encyclopedic recall and call their spin for what it was, that reducing spending was the political battle of the day resulting in repeated government shut downs, they stared at me, mouths agape, that I was not submitting to their spin and even more that I was confident in my facts.

Sounds very familiar. Like whenever Goober starts in with either his delusional marginal utility of wealth bullshit or his other pet myth that it was the Reagan and later Bush tax rate cuts (of 2003) which caused the debt to balloon. Even though those tax rate cuts led to increased revenue to the government and a booming economies. In the case of Bush 54 months of continuous economic growth and an average unemployment rate of 5.3%. Lets not mention the fact that government spending increased more than that tax revenue. No. lets not say anything about that.

tashi deleks,

M

Originally Posted by AkDiesel

We the people as a whole have brought this on to our selves in the drive to live and play like the rich... oh I can do the payments so I will do it now and worry about the payments later..

Credit isn't the problem and debt isn't the problem.

Irresponsibility is the problem.

It's a problem with our government and it's a problem for many individuals.

Credit and debt are just tools. They're a means to an end and nothing more.

If they're used responsibly they can make your life infinately easier, just like any other tool.

If they're used irresponsibly or abused they have the potential to become dangerous, just like many other tools.

Originally Posted by Mahasattva

And here comes the arrogant intellectual on parade again.



:rolleyes: That’s right Goober the theory of marginal utility does not apply to wealth. You can attempt to twist the theory and try and apply it to wealth, which is what Galbraith did and what you continue to regurgitate for us on the forum. Like Galbraith, you are trying to assert that there is some theoretically perfect level of income, not too much and not too little that would magically make economics work more efficiently. More efficiently for whom is what I’d like to know. You, like Galbraith before you and the few others on the forum who share your ideology, presume to know what this perfect level of income happens to be and seek to create policies and practices that, in your omniscient wisdom believe, would bring about this level of income for as many Americans as you can force it upon. So much for the classically liberal and democratic ideal of private property rights.

You would have us believe that it would be better for a person to be financially devastated by a loss of x number of dollars, rather than be in the position to withstand a financial loss of a number greater than x number of dollars. You along with the rest of the anointed would be more than happy to set the value of x, presuming to know the most ideal value that x should be set for each of us. And this presumption is really the heart of your hubris. The arrogance that allows you to believe that you or any human being, if they are of the correct ideological bent, has the expertise and knowledge to set the value of x is a big part of what blinds you to reality. You continue to bring up the Reagan tax cuts and assert that is why to country is in trouble, yet when it is pointed out that when the Reagan tax cuts were enacted revenue increased for the government. With one exception, each year Reagan was in office, tax revenue to the federal government increased. The one year that tax revenue did not increase from the proceeding year, the government still took in more than under Carter. Unfortunately government spending increased more each year. Those are the basic facts and you neither own them or can change them.

I noticed you could not use the quote function to highlight me actually saying or implying what you accuse me. I also noticed that you have yet to actually respond to the substance of either of my posts, but that‘s what I expected.



That’s right goober the theory of the marginal utility of goods and services does not apply to wealth or money and a theory about the subjective relationship people have with the utility of this or that good or service does not support your leftist-Progressive delusional tax policies.



Bullshit Goober, that is not what I said nor implied.



False Goober, that is not what I have been arguing. Perhaps it a little too nuanced for you to grasp.



Your baseless insult is noted as the typical non-response we have come to expect from you. You couldn’t even explain your accusation of intellectual dishonesty. You’ve got nothing Goober. You are no longer “becoming” a cartoon, you’ve become the cartoon.

What is so very funny is you actually take yourself seriously.

tashi deleks,

M

OK, so the what do you call it when someone wins the lottery and changes their spending habits?

If I win the lottery and decide that I would like Romanee Conti with dinner instead of Mouton Cadet, is it that my taste in wine has changed? The prices of the bottles are the same as before, my taste would be the same as before, what has changed is how I value the wealth.
In the field of study called microeonomics, that particular effect is attributed to the marginal utility of money.

Now I don't know what the out of the mainstream economists that you subscribe to call it, perhaps you can enlighten us.

What do you call that effect and what do you attribute it to?

Originally Posted by goober

...instead of Mouton Cadet,

Mouton Cadet? goober you just went up a couple of points in my estimation of you.

Originally Posted by soot

Credit isn't the problem and debt isn't the problem.

Irresponsibility is the problem.

It's a problem with our government and it's a problem for many individuals.

Credit and debt are just tools. They're a means to an end and nothing more.

If they're used responsibly they can make your life infinately easier, just like any other tool.

If they're used irresponsibly or abused they have the potential to become dangerous, just like many other tools.

The market takes these things where the conditions dictate.
It's not a moral failing, it's got nothing to do with morality. Markets are amoral, people are supposed to act in their perceived self interest, and they do.
The distortion of perception is deliberate, it's called "marketing", it's changing the perception of market participants.
If there was glaring wrong doing it's usually done by the people who are most knowledgeable about the market, to skew results in their favor.
People didn't lie on no-doc mortgages (there was nothing to lie about) they were convinced by the person who stood to make a commission, that the course of action most in line with their best interests was taking a large mortgage, there was little or no risk.
If anyone knew there was risk, it was the professionals who were creating "no-doc" mortgages, but here's the rub.
If you work for a bank in the business, and your pay depends on your results, you need to do what the other people in the industry are doing, or your income will drop and you'll get fired.

Originally Posted by Mahasattva

That’s right goober the theory of the marginal utility of goods and services does not apply to wealth or money and a theory about the subjective relationship people have with the utility of this or that good or service does not support your leftist-Progressive delusional tax policies.

That doesn't make any sense to me. Understand that I'm not saying it's nonsense, just that to my way of thinking about these matters it doesn't really make sense to me.

I'll explain myself.

Money is a commodity. It is a marketable item produced to satisfy wants or needs.

It has all four attributes of a commodity: value, use-value, exchange value, and price (interest rate).

Use-value, as you know, is another way of saying "utility".

So money has utility.

If money has utility than it must have marginal utility.

There must be some point at which, and I agree with you that this is as subjective for money as it is for anything else with utility, the value of one more unit of money decreases to the owner or user of that money.

Now, that was all theoretical.

From a practical perspective, I know that an additional $1.00 does not have a great deal of utility (or value) to me...personally.

I have plenty of $1.00's so one or two, or even one or two hundred, doesn't really mean all that much to me.

My brother, on the other hand, lives pretty much hand to mouth. He's unemployed much of the year and has a very difficult time making ends meet.

Maybe once a year, generally in the spring, I'll have him over the house to do some clean up. He does basic yard work type stuff (rake and bag last year's mulch, throw down some top soil, seed the lawn, throw down new mulch, etc...).

I called him this year and asked him if he was interested. Sure he says. Okay, I'll give you $200 for the day. Make it $300 he says. Done, I say. Just like that.

To me, $300 has no more value that $200. I'd pay $300 for a job I initially planned to pay $200 for without giving it any thought at all.

To my brother $300 has a great deal more value than $200.

Now, let's say that instead of asking for an additional $100 my brother asked for an additional $1000.

Could I afford it?

Yes. It wouldn't hurt me at all really.

Would I spend it on this?

No. I'd go out and do my own yardwork because the utility of what I am being asked to sacrifice excedes the utility of what I'm acquiring.

That right there, to me, argues indisputably against the notion that money doesn't have marginal utility.