Reducing Wealth Statification

[DBTrek]

Regardless of the morality of usury (it's not moral, by the way), this really has little to do with the distinction I made. If you lent out $500 and charged somebody 10% interest on that, then you made $50 in profit. But nowhere did you actually create or add $50 to the economy. You just took it from elsewhere.

It's not my burden to create something with money I've handed to someone else. It's their burden to put it to use in a way that makes the loan worth $550 to them. If they didn't create at least $50 of wealth with the loan that's hardly the fault of the lender. That's like upbraiding a baker who lent flour to someone who didn't bake anything with it. Not the bakers fault, he just lent the flour.

[Okeefenokee]

Regardless of the morality of usury (it's not moral, by the way), this really has little to do with the distinction I made. If you lent out $500 and charged somebody 10% interest on that, then you made $50 in profit. But nowhere did you actually create or add $50 to the economy. You just took it from elsewhere.

That's distinguished from somebody who actually builds shit and puts it into the economy. Elon Musk, like him or hate him, built a shit ton of electric cars and contributed them to the economy (and society). The profit he earned from that came from actual wealth generation.

Big difference.

One type of thing actually grows the economy. The other type of thing only redistributes wealth within th existing economy. We should encourage the former and limit the latter if we are going to use tax policy with a mind towards ending all this wealth redistribution to the top. That's how shit gets up there for the most part.

Elon Musk borrowed money to build those cars.

[Martin Hash]

I think it’s great that people can make money by loaning money. Cool, loan away.

[DBTrek]

I think it’s great that people can make money by loaning money. Cool, loan away.

Not to mention that many loans go un-repaid - another factor lenders take into consideration when setting interest rates. What is missing from all the "usury is evil" polemics is the simple fact that you are never forced to take someone elses money. Indeed, people often have to jump through a number of hoops simply for the pleasure of being allowed to take someone elses money. So let's stop pretending that borrowers are blameless victims-in-waiting for evil lenders intent on destroying their lives.

Lenders actually want borrowers to succeed - one might say they're intimately invested in the success of their borrowers. Failed borrowers don't repay loans. Lenders with outstanding, unpaid loans to failed borrowers aren't in the lending business for long.

[Speaker to Animals]

Regardless of the morality of usury (it's not moral, by the way), this really has little to do with the distinction I made. If you lent out $500 and charged somebody 10% interest on that, then you made $50 in profit. But nowhere did you actually create or add $50 to the economy. You just took it from elsewhere.

That's distinguished from somebody who actually builds shit and puts it into the economy. Elon Musk, like him or hate him, built a shit ton of electric cars and contributed them to the economy (and society). The profit he earned from that came from actual wealth generation.

Big difference.

One type of thing actually grows the economy. The other type of thing only redistributes wealth within th existing economy. We should encourage the former and limit the latter if we are going to use tax policy with a mind towards ending all this wealth redistribution to the top. That's how shit gets up there for the most part.

Elon Musk borrowed money to build those cars.

Elon Musk generated the wealth. The banks only parasitically skimmed off of that through usury. Further, there exist more rational and sustainable means to fund businesses than usury.

[Okeefenokee]

He borrowed the money.

And he continues to take money from the taxpayers to fund his businesses.

He doesn't fund his companies with his own money.

[Speaker to Animals]

He borrowed the money.

And he continues to take money from the taxpayers to fund his businesses.

He doesn't fund his companies with his own money.

That's really beside the point, Okee.

There exists a better way to fund business: venture capital. Banking is parasitic in nature and amounts to stealing when the business fails. Banks have little incentive to properly vet loans and wisely manage capital because they rely upon the state to steal money from somebody else if the business venture to which they lent money fails. Venture capitalists, on the other hand, risk their investment. They have every interest only to invest in business ventures they believe have a good chance of success, else they will lose their capital and the system will weed out the failures. The banking system actually has no such mechanism to weed out failure. It actually encourages it, which is why we got things like the credit default swap market collapse.

Using public subsidies to fund a business model also is a questionable practice. In some cases it might make sense, but I am of the mind that, the government ought to just take the unemployed and direct them towards whatever it is they want to subsidize. If something isn't profitable for a private enterprise to do, but we collectively decide we still want it, then it's a perfect case for a job program. Obviously, hardly any of these subsidies fit that description.

In any case, the fact that Musk received loans from banks and subsidies from the government is utterly irrelevant to the point I made: Musk profited by generating wealth as opposed to simply redistributing it as banks, for example, most often do. Banks do not by themselves grow the economy. Nor do stock market traders, etc.

The distinction here is pretty obvious: wealth generation expands the economy by producing more goods and services that we didn't already have. Pure wealth redistribution plays legal and financial games to shift existing wealth from other people's accounts into your own. If your goal is to minimize overall wealth redistribution, I would argue that taxing wealth generation does very little to that end, whereas heavily taxing wealth redistribution is exactly your problem. Go after capital gains on financial trades, for instance. Traders make HUGE profits by simply shifting money around the economy. They don't actually grow much of anything other than hiring more leeches to keep their operations running. I suppose there exist some side effect growth from them paying their employees, building structures, paying some bills, and so on, but that's about it. That's not like Apple flooding the markets with millions of relatively cheap smartphones and computers.


The middle class is being destroyed mostly by three things:

(1) Job offshoring deals (aka "free" trade, which it is not really free).
(2) Mass immigration demolishing real incomes for decades now.
(3) Usury essentially enslaving people who want to get into what is left of the middle class through student loans, mortgages, car loans, etc.

Insomuch as tax policy can change a damned thing here, I would suggest to you that it only really can have a meaningful impact on (3).

[Martin Hash]

Politics is a game. Capitalism is a game. Markets are a game. None of this stuff came from God's Eye, so they have flaws that can be exploited. Trying to chase the leaks around with regulations is problematic. The only real solution is a comprehensive one that let's people make as much money as they can then disincentivize their usurious actions with high progressive tax rates and confiscatory estate taxes.

[Okeefenokee]

You'll recall how much effort had to be taken by the soviets keep people from leaving the utopia they created when they reduced the wealth stratification.

I seriously don't understand how you don't get that you will have to use force to stop people from leaving. The only people you will have left in the end are the people with nothing to worry about anyone taking. You'll have a welfare state bleeding to death from the hemorrhaging human capital, see California.

How many times do you need to see this scheme fail miserably before you understand that you have no business telling other people how much they should have?

[Martin Hash]

People aren’t leaving Sweden, or even San Francisco, why would they leave here, and where would they go?