« prev   random   next »

0
0

Can Economic Growth Alone Fix Income inequality

By anotheraccount following x   2017 May 20, 9:06am 1,134 views   8 comments   watch   sfw   quote     share    


US GDP 18T - growing 3.5% nominally generates about 630B a year in new possible income. Interest on all debt (government, auto, mortgage, et) is around 3T. Creditors get more every year than debtors can possibly earn. Even if economy grows 5.5% nominally, that's not enough to even come close the amount of interest going to creditors.

We have to tax interest more to transfer back to debtors via government spending or tax incentives of some sort I don't see another way to slow down our path toward feudalism.

Does the argument make sense?

1   FNWGMOBDVZXDNW   ignore (2)   2017 May 20, 9:19am   ↑ like (0)   ↓ dislike (0)   quote        

Growth alone will not fix anything. The past 25 years has seen growth concentrated at the top with stagnation everywhere else. This exacerbates inequality. A dramatic increase in the value of unskilled labor or making everybody skilled improve things. Increasing the value of unskilled labor is quite a challenge (automation and globalization). Making everybody skilled is akin to making everybody in our country above the world average. However, we are not really getting any smarter, and the rest of the world is. In other words, we are losing ground.

Trump has convinced everybody that he can protect American labor from a global market while selling American products into a global market. The only way that this makes sense is to spin a fairy tale that Americans are still the greatest, but that we are handicapped by our incompetent and corrupt leaders who sold us out. Lots of people want to believe this, because it absolves them of blame and gives them hope that Trump will fix their problems. The hangover is going to be a bitch.

2   ThreeBays   ignore (0)   2017 May 20, 9:56am   ↑ like (0)   ↓ dislike (0)   quote        

tr6 says

US GDP 18T - growing 3.5% nominally generates about 630B a year in new possible income. Interest on all debt (government, auto, mortgage, et) is around 3T. Creditors get more every year than debtors can possibly earn. Even if economy grows 5.5% nominally, that's not enough to even come close the amount of interest going to creditors.

Does the argument make sense?

Your argument doesn't make sense. Why compare interest on all debt to just new potential income? What about the existing income?

GDP growth is compounding, so if it grows by 630B a year for 5 years, then that would eclipse 3T of interest over time. What you're looking for in other words is, are debt costs growing faster, the same, or slower than GDP.

3   CovfefeButDeadly   ignore (4)   2017 May 20, 10:15am   ↑ like (0)   ↓ dislike (0)   quote        

Check again. The middle class stagnation has only been since around 2007.

4   anotheraccount   ignore (1)   2017 May 20, 7:28pm   ↑ like (0)   ↓ dislike (0)   quote        

ThreeBays says

Why compare interest on all debt to just new potential income?

The reason is that every that's the new delta. Also I am even saying that interest rates will stay low as growth accelerates. Most likely interest rates go up and the only way to do a transfer is through taxation.

5   ThreeBays   ignore (0)   2017 May 20, 11:09pm   ↑ like (0)   ↓ dislike (0)   quote        

tr6 says

ThreeBays says

Why compare interest on all debt to just new potential income?

The reason is that every that's the new delta. Also I am even saying that interest rates will stay low as growth accelerates. Most likely interest rates go up and the only way to do a transfer is through taxation.

You're counting the yearly delta for GDP versus the yearly total for interest cost. That doesn't make sense.

This is what makes sense, the cost of servicing US national debt has been nearly static for 10 years while GDP rose 4 Trillion (28%).

Year Interest Expense GDP Interest / GDP
2016 $432.65B $18.56T
2015 $402.44B $18.04T
2014 $430.81B $17.39T
2013 $415.69B $16.69T
2012 $359.80B $16.16T
2011 $454.39B $15.52T
2010 $413.95B $14.96T
2009 $383.07B $14.42T
2008 $451.15B $14.72T
2007 $429.98B $14.48T

Curious, where did you get data on total interest cost for government, auto, mortgage, etc?

6   anotheraccount   ignore (1)   2017 May 20, 11:15pm   ↑ like (0)   ↓ dislike (0)   quote        

ThreeBays says

This is what makes sense, the cost of servicing US national debt has been nearly static for 10 years while GDP rose 4 Trillion (28%).

I am talking about total debt (government, mortgage, auto, credit card, etc). Not just government debt.

The cost of financing debt has gone done because interest rates wend down. That does transfer from creditors to debtors a bit and at the same time brings asset prices which is not good for income inequality. That's why taxing interest income would allow higher rates without increasing income inequality.

7   RC2006   ignore (0)   2017 May 21, 8:08am   ↑ like (0)   ↓ dislike (0)   quote        

Hell no we are birthing poor people faster than ever.

8   Blurtman   ignore (1)   2017 May 21, 8:54am   ↑ like (0)   ↓ dislike (0)   quote        

tr6 says

Can Economic Growth Alone Fix Income inequality

Of course not. You can have rising GDP and a decreasing standard of living.





The Housing Trap
You're being set up to spend your life paying off a debt you don't need to take on, for a house that costs far more than it should. The conspirators are all around you, smiling to lure you in, carefully choosing their words and watching your reactions as they push your buttons, anxiously waiting for the moment when you sign the papers that will trap you and guarantee their payoff. Don't be just another victim of the housing market. Use this book to defend your freedom and defeat their schemes. You can win the game, but first you have to learn how to play it.
115 pages, $12.50

Kindle version available


about   best comments   contact   one year ago   suggestions