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Author Topic: Bernie Sanders on income distribution  (Read 559 times)

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Online VekseidTopic starter

Bernie Sanders on income distribution
« on: August 22, 2008, 12:01:53 AM »

The comparison to the robber barons of old is not a bad one - the income inequality then is part of what is thought to have led to the Great Depression.

Offline NightBird

Re: Bernie Sanders on income distribution
« Reply #1 on: August 22, 2008, 12:26:24 AM »
And he barely even began to cover the issues that are affecting the entire economy from the debilitating effects this degree of inequality has on the demand side of the economy.

For everyone who wants to argue that the capitalist economy corrects itself, remember that we do not have a pure capitalist economy. We have corporate welfare on a staggering level. The New Deal attempted to jump-start the economy by getting money into the pockets of people to make purchases. That was under Keynesian theory. Since then, the dominant theory has shifted to supply-side, which means that government goes straight to helping out business on the theory that the results will drive prices down and increase purchasing that way.

We've demonstrated, though, in the past roughly 30 years, that trickle-down doesn't. In a consumer economy, stability itself, let alone growth, requires a broad purchasing base. With that crippled, a downward spiral results.

**NOTE** The above is a simplified discussion of economic theory. If anyone reading this opts to nitpick my summary, I want it on the record that I'm aware this is putting everything in very basic terms that leave out a number of details. I primarily wanted to add that 'fairness' isn't the only issue involved with economic disparities.

Offline Methos

Re: Bernie Sanders on income distribution
« Reply #2 on: September 03, 2008, 08:24:17 PM »
Yea, actually I'll be the fellow to nitpick that NightBird. Saying that supply side economics encourages corporate give aways is entirely misleading. The theory of supply side economics is that high rates of taxes on business and investment result in less business and investment activities. High rates of taxes result in diminished economic activity which results in a sub optimal economic state for the economy. The effect of tax action is usually graphed on something called a Lafter curve developed by an economist of the same name. Supply side economics encourages a low rate of corporate taxation and a low rate of taxation upon capital gains to encourage investment.

The non-partisan porkbarreling that goes on as one government or the other throw cash at their supporters really has nothing to do with economics and everything to do with politics. Politicians may upon occasion claim to be following the tenants of one theory or another but generally that's just putting lip stick on a pig.

As for your indication that the New Deal kickstarted the economy in the thirties that's something of a misconception. Modern economic study indicates that the social programs implemented had far less to do with the economic recovery than the repairing of the credit and monetary crisis that had transpired. The great depression was really a case of piss poor montary policy in an economic downturn and then the ridiculous response of every country adopting protectionist measures in response which only jacked up the cost of living everywhere exaserbating the crisis.

Furthermore, Keynesian economic theory is a much abused concept as Keynes essentially advocated for the government to seek to drive demand in times of economic downturn in order to soften the blow that comes wit market cycles. That's since then been used to advocate creeping socialism which wasn't his intent.