Thursday, March 26, 2015

How income inequality benefits everybody

Here is a link to an insightful article by George Will titled "How Income Inequality Benefits Everybody".

Most aspects of income inequality are poorly understood by most people.  For example:

  • Do you prefer more income inequality if it comes with a better standard of living for everyone or less inequality if it comes with a lower standard of living for lower income classes?
  • Which is better for lower income classes, a rich person that spends his income on consumption - thereby creating demand for consumer goods that produces jobs, or a rich person that does not consume - thereby not creating demand for consumer goods?  Which of the two takes a bigger share of consumer goods production?  If the rich person doesn't consume, what happens to the income - does it produce jobs or not - what kinds of jobs - do they foster more or less growth?  Is growth necessary for a growing average standard of living?

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