Wealth distribution by age

Wealth Inequality has something to do with age


#economy #occupy #income #inequality

This backs up some of the comments I've made on various occupy movement and income inequality posts.

You have a large concentration of wealth in the hands of an older demographic. They are already relatively risk adverse as a demographic and they have just gone through 3 scary years watching a lot of their accumulated wealth and income evaporate. The are now very focused on trying to make that wealth last them for the rest of their lives. That is one of the reasons the free market approach and top down economics are not ideal in this situation. You can tax them a lot less if you like but you won't see a rise in jobs as a result. They are not going to risk the capital they have accumulated in the kind of investments we need to stimulate growth and they are not going to radically increase their spending levels as a result.

The financial sector is bruised as well and still recapitalizing. They are not lending out the amount the way they once were. Criteria for getting loans off them are tighter in the more risk adverse world we live in. Loans to Businesses that fail contribute to the economy but they don't look good on shareholder reports.

So in some ways Government spending has to be the spark that ignites the economy and encourages risk and wealth creation. Particularly in the younger demographic. If not the Government then who?

If they were to open the borders up and offer visas on a point system where age and wealth factored into the granting of a Visa it would go some way to giving an injection in the arm of the capacity and capability of the middle class to prime the economy.

But until people start spending and banks start lending it's the Government or stagnation. Yes it is a redistribution of wealth in the form of taxes but if people and businesses won't spend voluntarily then the economy will grow anemically, stagnate, or even shrink. That isn't good for anyone except those betting against the US.

If people in power could just agree on that we could stop a lot of pointless debate and focus on the really important question. How should the Government be spending to stimulate the economy and get us back on a path to prosperity? Where would they get the best bang for their buck?