Extreme Income Inequality

[RL Clown]

Hello. I'm here to vent about extreme income inequality... The world does not make sense in my opinion. In some countries, teenagers get to sit on a sofa and play video games. In other countries, teenagers have to work in factories. Conditions are horrible; they receive minimum wages. Some human beings are exploited and they don't have enough food to eat. They don't have enough money to buy themselves a nice jacket, let alone an X-box 360. The rich countries should give some money to the poor countries. The rich countries should increase the taxes of the wealthy folks. Let's not think about socialism... I wouldn't go there... But I think that society is too capitalist. I don't know what I'm talking about. lol. No, but really, the first world countries should do more to help the poorer countries. Feel free to voice your opinion.

[Dutch]

Its a nice sentiment that a lot of people have. I have thought a lot about this, and half of my major was based on agricultural economics, so i was able to connect the dots that the media, biased educators, and tax-hike advocates don't expose. You have to remember that economics only works based on logic, not emotion. Examples:

Raising minimum wage seems like it would allow for low income workers to better afford the cost of living. Here's the issue: if employers spend more on wages, they have to compensate by raising the price of goods, or they will go out of business and then their workers get paid nothing. When prices go up, it causes a domino effect; any other good on the market that relies on the good with the price increase also increase in price. So now, that cheap hamburger at mcdonalds is $5 instead of $2, so that mcdonalds can afford to pay their workers. This is known as inflation. Additionally, they will hire fewer workers and expect a heavier workload out of the ones they do hire. This reduces employment, increases the poverty rate, and over works current employees.

This same principle can be applied to large corporations and the upper class. If incredible tax hikes are imposed, they will raise their prices, lay off workers, and cut corners in production, meaning a product to the buyer (you) will be of lesser quality. Remember, companies and individuals do not get to irresponsibly spend money they don't even have like the government does.

You cannot take money from a wealthy country and give it to poor countries without affecting the populace of the former. This does not raise the welfare of the poor countries as much as it decreases the welfare of the wealthy ones. If everyone is equally poor (since money in an economically stable environment is finite) then things like smartphones, cars, and modern medicine cannot exist because there simply isn't the financing for research and development.

Economics is very black and white. Numbers and math are based on logic, and money is calculated as numbers. Yes, in capitalism, there are losers and bouts of corruption. But in socialism and its big brothers communism and fascism, there is always corruption, and the only winners are political leaders and their favored corporations, since a free market does not exist.

I know you said this isn't a socialist thing, but any implementation of over-taxation and redistribution of wealth, as you suggested, cannot be described any other way.