Shain Mayer

Tax the Super Rich now or face a revolution - Digg

This comment rings very ture and makes so much sence to me. I am not for a revolution in the brutal terms as much as a need to restart our inefficient gov't. I do believe states should be able to carry more weight.

by hpmnick 16 hr 59 min ago on Digg.com

I have done quite a few thought experiments and analysis on the nature of economics, and I have concluded that there are two factors that determines the quality of life in a country (or any system)

1) The amount of money entering or leaving a country - If a lot of wealth is exiting a country, the quality of life will decline. If a lot of wealth starts to enter a country the overall quality of life will typically improve. Ideally, a system should be able to sustain itself as long as it is either closed, or has no net loss of wealth.

2) The evenness and speed of the "flow" of money throughout the system: This one is a little more complicated, but its arguably the most important factor. In short, the worst thing that could happen is when you have a good portion of the nations wealth within the grasp of a few people who do nothing other than sit on it.

Expanding on #2, the best thing you could have is a (relatively) even distribution of wealth that is moving freely and quickly. The faster that money changes hands, and returns back to a consumer, represents a cycle. The faster the cycles, the more production takes place. The more production and consumption that takes place, the more material wealth a country will hold.

I'm by no means anti-rich, and I don't want to come off as a communist or socialist. Capitalism can work just fine, it just needs to be controlled. The problem is that once large portions of money become stagnant, the effect is similar to deflation without a lowering in the cost of goods. Essentially, no one else has any money, and consumable goods stay the same price. I believe this is what is happening now. A large portion of US citizens have negative wealth (more debt than assets), while a small percentage of Americans have more money then they know what to do with. This represents a very inefficient system. If that stagnant wealth was being used (and contained in the US), we'd have a much healthier system .

Due to an inefficient govt, and factor #1 (the country experiencing a net loss trade deficit and movement of our wealth overseas), we could be entering an irreversible situation where we have most of our wealth siphoned out of the country. Much of it will end up in the developing countries, or maybe even some European countries that capitalize on it..

I have a bunch of potential solutions, but basically what we need is to get that stagnant wealth moving and at least partially distributed back to the majority. It is the only solution to this problem.