Since I took macroeconomics back in 1988, I have found only one maxim in the entire field always holds true -- the monetarist equation:
MV=PQ
Where
M=amount of money available in a given economy
P=aggregate price of goods
Q=aggregate amount of goods produced
V=velocity of money, aka the amount of times per year a given currency is spent on goods and services
The problem with increasing income inequality is:
quote:
Well, I think it’s quite simple, he began. If you look at something called ‘velocity of money’you guys know what that is, I presumethat means how much gets spent and turns around. When you have the top one percent getting money, they spend five, 10 percent of what they earn. When you have the lower end of the economy getting money, they spend 100, or 110 percent of what they earn. As you’ve had a transfer of wealth to the top, and a transfer of income to the top, you have a shrinking consumer base, basically, and you have a shrinking velocity of money. Bernie is the only person out there who I think is talking at all about both fiscal stimulation and banking rules that will get the banks to begin to generate lending again as opposed to speculation. So from an economic point of view, it’s straightforward.
source
What is amazing is the top 1% would actually be more prosperous if they allowed the other 99% to a share of the profits instead of using their wealth to suppress all others financial well-being by bribing politicians. I guess their love of money is second to their enjoyment at watching others suffer since they pay dearly for this entertainment.
What is surprising is the source of the above quote, Asher Edelman, the purported inspiration for Gordon Gekko (I always thought it was Mitt Romney).
Anyone is welcome to refute the monetarist equation by providing a single counterexample, just as they can try to refute gravity and thermodynamics and evolution.
Good luck, Jews for Hitler. Oh look, there's a Mexican, get em'.
Edited by anglagard, : Provide source
Read not to contradict and confute, not to believe and take for granted, not to find talk and discourse, but to weigh and consider. - Francis Bacon