The rich donāt spend the money they have, and the poor donāt have money to spend.
This is a problem when 70% of the economy relies on consumer spending.
Closing our staggering wealth gap isnāt just the right thing to do. Itās essential to save our economy from collapse.
@joeinwynnewood @rbreich Spend it or lose it to taxes.
Mostly I'm being flippant. The wealthy own the courts at this point, so what can really be done?
@nathanlonghair @rbreich Iām being flippant. Trickle down as an economic model is nonsense and always has been.
My point was that if you can actually find all of their wealth, perhaps you can give them a choice ā spend it or weāll spend it for you. Would that more politically palatable than āweāll spend it for you?ā
The cynic in me says nothing will happen, because the wealthy have already bent all tax law in their favor and bought the courts and politicians to protect it.
@brokenneon @rbreich taxing the wealthy at fair -higher- rates actually strongly encourages them to spend money in pretax, tax deferred, and tax deductible investments as way to reduce what they'd would pay in taxes without said investments.
So - a minor and rather simplistic example:
A very wealthy person compensates himself very well from his business. Taxes on the wealthy are then significantly increased from their unjustly low rates of today.
The business owner, in order to v lower what he's paying in the new tax structure, then invests in his business rather than pay himself an obnoxiously high salary as a method of lessening how much he's paying in taxes.
The business then grows from that self investment while putting money back into the economy.
In the end, it's a win-win. The business grows due to the self investment and therefore the business owner is actually worth *more* than if he paid himself an obnoxiously high salary.
@rbreich Yes, I've been learning recently how the wealthy don't pay their bills. Musk highlighted it, but I've heard about landscapers who won't engage with projects costing over $1m because people with that much money tend not to pay them.
Companies do it too. Instead of paying for what they are buying, they pay their outstanding bill to be about to order more things.
According to the maxim.
If you owe the bank 100 $ it's your problem.
If you owe the bank 1,000,000 $ it's their problem.
@rbreich Great vid. I have long had a related question for economistsā¦
I am familiar with the disconnect between median incomes and productivity. What I always wonder about is that some or much of that labor productivity is the result of investment by the laborers: money and opportunity cost spent on education, smartphone plans, healthcare, etc.
If these are taken into account it seems that the the picture could be even worse than we see here, with the after-investment median income growth negative, and the benefit going straight to the owners.
This seems like something that economists could and should quantify, but Iāve never found this issue addressed with data.
@rbreich Every dollar in the "Wall Street" system is a dollar no longer in the economy.
This is why the feds keep issuing debt, because if they didn't, the rich would have taken every dollar that has ever existed.
The fact that all of that money can disappear in an instant? We're cursed - too many generations away from 1929, just like we're too many generations away from polio and measles before the vaccines.
they're both against the safety tools because they forgot why we made them.
Yes.
Effectively there are 2 economies.
. Main Street - Ever less money is circulating here.
. Wall Street - Ever more money is circulating here.
The 2 economies are separated from each other. Their indicators don't match with each other.
I consider the Wall Street economy to be a parasite living off its host the Main Street economy.
Once it has killed Main Street then it has killed its host and guess what ?
Money is like blood. Cut the blood supply off and limbs die off.
Communities die when money does not circulate sufficiently locally.
@rbreich as long as the Poor's could have a house to sell, why should the rich invest their money in bringing balance into the system?
By the way: why should someone own more than two homes anyway?
@rbreich @dr_jo_mue learned this year after not getting a tax refund, if you want write offs, you buy houses
I donāt wanna play these games
@Luci_brennacolleen @rbreich exactly.
All houses are paid within 15 years.
Privately owned houses: by the owner with all his expendables, to own in the end -in fact: a house
Investor owned houses: by the tennant with his (slightly lower) rental fee, thus generating the owner a revenue through massive write-offs, which only commercially owned properties provide. Leaving the tennant in the end with nothing and the investor... With a house. Horray.
That has to stop.
@rbreich the flow of money in the USA for the last 100 years or so is nicely documented in the 2011 documentary The Flaw.
The conclusions at the end are very similar to your comments.
istartedajokešāļø
Robert Reich
Vincent 
Grassroots Joe
NathanLonghair
Dave
H4Heights šŖšŗšµšøšŗš¦šØš¦
Gwyn
antipode77
āLuciāBrennaColleen
stuxā”ļø
John (he/him)
Condalmo.
KingoftheWhackadoodles
JWSGeek (Moving: Universeodon)
Der Entgegner (Aka Ratatƶskr)
Graham Scambler
Perspective
Alex P Roe - OLD ACCOUNT