Comment by veltas
2 days ago
The issue with the current system is it gives a lot of money and power to banks, and finance.
The issue with the proposed system, is that debt is actually a good thing for normal people. For example if you are young, productive, and come from a poor background, then you might buy a house with a mortgage. If debt is more expensive, then you are less likely -- and older people (and rich kids) are more likely -- to be able to afford these houses.
You might say that the current system is unfair, because wealthy people won't need loans and can put their money to work exploiting poor people. But in a system where we redistribute wealth this way, the impact is harshest on the poorest people. The things that are limited in supply and high in demand will immediately go up in price. The things they wish they could buy, and plan long-term, will become unattainable. And I've not even gotten onto how this would affect productivity.
Everyone is focused on how the rich are getting richer. This is inevitable in liberal societies. The goal should instead be to stop the poor getting poorer, and I'm going to need some serious convincing that handing people a CBI, instead of providing debt, is going to actually benefit and not hurt them and the whole economy.
What you are talking about is inflation, which is due to more demand or lower supply. Lowering demand or raising supply is the solution. Since lowering demand is anti-human it seems raising supply is the only way.
Except people don't eat money, so raising supply needs to be done in a way that won't kill the economy.
> Everyone is focused on how the rich are getting richer. This is inevitable in liberal societies. The goal should instead be to stop the poor getting poorer
These things are fundamentally connected. When the wealthy have too much power, they squeeze the middle and the poor too hard.
Unlike much else in life, the pool of money is a zero-sum game (though this is addressed in the paper, notably). When 3 Americans hold more wealth than 50% of the rest of us, that's a real problem. This historic and rising inequality leads nowhere good, and we are in existential crises which require that this be properly addressed.
Focusing on 'wealth inequality' usually leads to policies that hurt the economy, and make us all poorer, and actually increase the inequality. It hurts poor people more than the rich when we make bad economic decisions, and this paper proposes just such a decision. What can we do that won't backfire? We need a strong economy to help poor people.
> Focusing on 'wealth inequality' usually leads to policies that hurt the economy
When was the last time focusing on 'wealth inequality' was done in earnest? Not any time recently, given the complete lack of anti-trust regulation and the gutting of most unions and pensions.
Can you describe some of these policies with historical sources, please?
When you say "the economy", do you mean "rich people's yachts"? ...
"Trying to address inequality makes us all poorer" - wow.
If you really believe that's true, at least say why, or bring a source (other than Ayn Rand please lol). What's the mistake you believe people are making? Because just declaring something like that is like saying, we can't address unsafe driving because it will make people drive worse. It's clinically absurd.
Here's what I think - economists don't talk about inequality because of the three reasons discussed here [0]. It's not in their models, and it's not in their class interest.
> What can we do that won't backfire?
Tax the wealthy. No it's not easy. Yes it can be done. Yes it has worked in the past.
0 - https://www.youtube.com/watch?v=CivlU8hJVwc&embeds_referring...