Why does the US economy require everyone to be rich to make the economy work?
Posted by admin in Finance Tuesday, 18 January 2011 06:01 7 Comments
Isn’t it our own fault that we commercialized everything in previous years to the point where now we find those things not important anymore and now the economy is falling because we are not needing our community’s in donald trump style?
It isn’t that at all.
If everyone was rich nobody would be rich. It’s hard to explain to a simpleton.
I don’t know a great deal about this topic. And I’m not entirely sure what you’re asking. But I do know it doesn’t require everyone to be rich. Good economies have a large and stable middle class … our middle class is shrinking. There is now a larger divide between the wealthy and the poor and it’s getting bigger.
Not everyone needs to be rich, just me…
I don’t quite understand your question. Economic growth does not require everyone to be rich. Rather, economic growth produces resources, so on average people become richer.
You might be confused by the fact that the economic slowdown has been driven by a drop in consumer demand. In other words, as people decide to buy less stuff, companies react by producing less stuff, and then the lay people off.
It is true that without consumer demand, the economy slumps. But that doesn’t mean that people have to consume like Donald Trump. What it means is that we should not have a sharp decline in demand. In fact, it’s better in the long term – after the economy recovers – if we don’t spend too much but instead save and invest.
The US economy does not require everyone to be rich they require capitalizim to take some responsibility for its actions. Just because you can afford to move the labor force of your company overseas where the labor is much cheaper does not mean its a good idea for the country you reside in. With more money comes the need for more responsibility. Greed has taken over, the what at one time was, a good heart. If you play a game of monopoly on board “A”and everytime you receive compensation for a player landing on your property you take the money and buy up property on a completely different board “B” eventually the money of board “A” wil be drained and when a player lands on your property on board “A” he will not be able to come up with the money. Because you the CEO invest your money not in your own country or your own fellowman you invested in making the billions you already had into even more billions.
Actually, the economy needs us to be middle to upper middle class.
Rich people don’t spend a lot of money. If a person has a million dollar income, they might spend 10 % of it.
If you have 10 people with a $100,000 income each, they will each spend 90% of it.
The secret to maintaining a consumer driven economy is to keep a higher percentage of our wealth in the middle class. It’s the middle class that buys the SUV’s, HD TV’s, and computers and that is what has driven our economy recently.
The business cycle started way before modern commercialization. There was 1929 and there were many financial crisis before that going back well into the early 19th century.