Thread: The Real Causes of Income Inequality

Originally Posted by USCitizen

When did we become truly DEPENDENT upon selling bonds to China?

I'm not sure that we really are.

United States public debt - Wikipedia, the free encyclopedia

Originally Posted by eohrnberger

I'm not sure that we really are.

United States public debt - Wikipedia, the free encyclopedia

Good one.
So our constant concern over China is really our supply of bathroom tissue (cheap labor) as opposed to actual debt?

Originally Posted by USCitizen

Good one.
So our constant concern over China is really our supply of bathroom tissue (cheap labor) as opposed to actual debt?

I can't claim to be an expert on this, but I know that I am concerned about the total federal debt, as well as the yearly deficit, both of which are disproportionate to the amount coming into the treasury. Fiscal reality dictates that both should be brought down and be held in tight control, rather than being allowed to run rampant.

What happens to a household which runs up too much debt? The consequences could be only be that much worse for a nation who is so fiscally irresponsible. We can see it right now in Greece. Thanks, but I'd rather avoid that and not have to live through it, thanks.

Originally Posted by eohrnberger

I'm not sure that we really are.

United States public debt - Wikipedia, the free encyclopedia

lets go back to 2000, 6 to 27%, and thats with a large expansion of debt. Encouraged by a trade deficit with China.

Originally Posted by michael h

lets go back to 2000, 6 to 27%, and thats with a large expansion of debt. Encouraged by a trade deficit with China.

OK...That's a little bit more on the "China's got us by the family jewels" side.
Besides that debt, how much of Obama's multi-trillion bail-out has actually been handed out and how much is a "lady in waiting"?

Originally Posted by USCitizen

OK...That's a little bit more on the "China's got us by the family jewels" side.
Besides that debt, how much of Obama's multi-trillion bail-out has actually been handed out and how much is a "lady in waiting"?

That holding of America's debt and its growth is largely effected by the growth in the trade deficit with China.

Originally Posted by tsquare

Oh, that's cold...

The breeze of a misquito and what was expected. When he can’t prove an argument rationally he falls back on attacks and insults on the intelligence of whomever disagrees.

Project much there goober?

Could it have been more obvious. Laughable.

tashi deleks,

M

Originally Posted by michael h

Then your missing why we had low interest rates for the housing bubble.

We had low interest rates to push housing, in many cases to people who could not afford them.

FED attempts to correct this problem failed. Ignoring the resulting financial capital from current account deficits ignores basic economics. Milton Friedman as I stated previously touted these benefits.

Balance of trade - Wikipedia, the free encyclopedia
This deficit exists as it is matched by investment coming in to the United States- purely by the definition of the balance of payments, any current account deficit that exists is matched by an inflow of foreign investment.

He stated his belief that these trade deficits were not necessarily harmful to the economy at the time since the currency comes back to the country (country A sells to country B, country B sells to country C who buys from country A, but the trade deficit only includes A and B). However, it may be in one form or another including the possible tradeoff of foreign control of assets. In his view, the "worst case scenario" of the currency never returning to the country of origin was actually the best possible outcome: the country actually purchased its goods by exchanging them for pieces of cheaply-made paper.

I think your explanation is very simplistic relative to a very complex subject. But as you asked for short and succinct responses.

Do you understand my point about repartee yet?

Originally Posted by dnsmith

We had low interest rates to push housing, in many cases to people who could not afford them.I think your explanation is very simplistic relative to a very complex subject. But as you asked for short and succinct responses.

Do you understand my point about repartee yet?

Repartee is kool dn ... but then your use of repartee excluded a response to the post. Your succinct but don't reply. On the other hand you too suffer from the results of any trade is good trade ... you get a low return on your life's efforts. I can deal with nibbles in the arse and still appreciate people. If you replied with repartee for a long post ... I'd not feel obliged to find content ... even if I thought you were a good person as I think Maha is.

Originally Posted by dnsmith

Marginal utility of money only goes down with added wealth if that money is not being put into capital to develop jobs and create more wealth. I would suggest that a person making $1million+ annually will turn much of that money into capital which will improve economic conditions for the entire economy.

Exactly.

The exception would be when there is instability in economic policies of the government and excessive taxation.

Just the hint, a whisper, that government will enact new taxes or higher tax rates is enough to cause the wealthy to hold their money and for capital to flee the nation, either in direct foreign investment, or safe low risk tax deferred shelters or in real estate or by keeping it in stocks (or options) and bonds waiting until the rates are set to their benefit or when the market is better -- under better economic conditions and a better administration. Which is what we are seeing today under the Obama economy. Businesses have already been saddled with the burden of Obama Crap Care with its new taxes (for examples: 10% on the dollar for a sun tan session and a new tax applied to medical devices and Obama Care hasn’t been fully implemented) and the direction the administration wants to take with its “fair share” rhetoric is obvious. As the cash (or gold) reserves held by corporations and citizens increases day by day people ask, “Where are the jobs?”

It matters not a whit how much money a person earns so long as the more wealth is turned into capital development.

Which is what we see when government refrains from the current bullshit.

In my opinion disparity of income has many facets.

1. Education/Training
2. Motivation
3. Personal responsibility

There are some exceptions which tend to either prove that theory or recognize there is a subjective trait which turns off those with whom that exception is associated. Some people are just abrasive and no matter if they have all these advantages, 1. Education/Training;
2. Motivation; 3. Personal responsibility; they will still not achieve major success.

Hmm, yes to all of the above, but there are also factors of timing and changes in technology which increase the potential of wealth creation today that have little to do with any of the above personal factors. I recently read Amazon.com: Outliers: The Story of Success (9780316017930): Malcolm Gladwell: Books and he shows how opportunity, when taken, makes a big difference. Excellence in any given field requires the development of certain skills that directly relate to the field one is in. Bill Gates had the opportunity to learn on a computer (not a mainframe) how to write code and had the chance to practice for thousands of hours when he was a teenager. That opportunity was given to him because someone donated money and computers to the Seattle school he went to. There was a narrow window of time that made this possible. If Bill Gates had been born a few years earlier that opportunity would not have been there for him. If he had been born a few years later he would have been behind the curve and would have been just another programmer writing code. Bill Joy was another person who had the opportunity to practice writing code when he went to college, right when it mattered -- in many ways Bill Joy IS the father of the internet. Take a gander at the birthdays’ of Bill Joy (Nov. 8 1954) and Bill Gates (Oct. 28, 1955). Most of the big computer personalities were born during this period. Steve Jobs was born Feb. 24, 1955. They were born at the right time and were given opportunities (which they took) that were unavailable before. One of the things that has been established is that to attain real excellence in any skill or field requires at least 10 thousand hours of practice (or ten years worth of practice), natural talent helps in the begin, but talent is not enough. The same phenomena was seen with the great (misnamed) robber barons of the late 1800s and early 1900s, all born within a narrow window of opportunity. John D. Rockefeller was born on July 8, 1839, Andrew Carnegie was born on Nov. 25, 1835, J. P. Morgan was born on April 17, 1837. Timing is everything, but the huge increases in potential incomes in some fields (sports stars, movie actors, multinational CEOs, new product innovators Apple and Microsoft) has to do with technological developments over the last 25 or 30 years. Tiger Woods potential levels of income are far higher, even with his tarnished image, than Jack Nicklaus because of the integration of global networks and the business model of marketing image world wide, none of which has anything to do with actually playing golf. A “Hollywood Blockbuster” has the potential of earning hundreds of millions and billions of dollars world wide makes the incomes of the big stars look relatively small. Even Robert Reich acknowledges that the high compensation packages of CEOs makes complete economic sense reflecting the demands for high talent, in the very competitive environment of multinationals on the international stage. There are tens of thousands of different ways a person can earn an income or generate an income stream today that never existed and the technological innovations and modern managerial process of making a living today have exponentially increased the potential levels of income of almost any given occupation. When Jack Nicklaus played the Masters there was only a potential audience of a few million Americans. Tiger Woods has a potential audience of billions across the world when he plays the Masters today and that has a profound effect on earnings potential.

The problem with extreme leftist ideologues is that they believe they can “fix” these advantages of birth, which they see as disadvantages for everyone else. It does not matter that wherever you find conditions where there is such potential for high levels of wealth accumulation one also finds higher standards of living, while whenever you see obstacles to the potential levels of wealth accumulation you see lower standards of living.

tashi deleks,

M

Originally Posted by michael h

Open a word document, make a long list of intellectual insults and one line responses. Copy and paste at the appropriate time in debate. For more effect ... copy and paste the whole list, with smilies, giving the appearance of having said something insightful. Close the post with you best intellectual insult and make an appeal to your dogma.

Yours Truly, Substantive Deeebate

Wow! I have to say, you've got Goober's style just right.

tashi deleks,

M

Originally Posted by dnsmith

I do not accept that our future is "screwed." I believe that once we eliminate fanatic liberalism and fanatic conservatism we will continue to prosper into the future and free trade will help us do that.

Agreed!

tashi deleks,

M

Originally Posted by michael h

Repartee is kool dn ... but then your use of repartee excluded a response to the post. Your succinct but don't reply. On the other hand you too suffer from the results of any trade is good trade ... you get a low return on your life's efforts. I can deal with nibbles in the arse and still appreciate people. If you replied with repartee for a long post ... I'd not feel obliged to find content ... even if I thought you were a good person as I think Maha is.

So maybe you finally get my point? Those who use repartee are trying to be cutesy and seldom if ever actually respond to the point. Repartee is nothing of value, not even entertainment value and I used it only to illustrate my point. For example: Sucking pus from a festering boil gets you nothing but a foul taste in your mouth.

There are times questions are asked that require long answers with no repartee. Here my point is, if you want to read my responses fine, if not that is your choice. If you choose not to read a long post I make, you will miss the support of the information.