Social Security, Part 5, The Economics and Politics

Thomas Lee Abshier, ND
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The Christian Constitutional Republic
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Liberty and Justice for All
by: Thomas Lee Abshier, ND

Social Security
The Economics and Politics
By: Thomas Lee Abshier, ND
4/15/2011

From: Thomas Lee Abshier, ND
To: Jonathan
Subject: The Homer Simpson Approach to Social Security – Patriot Update
Date: Fri, 15 Apr 2011 14:11:53 -0700

http://patriotupdate.com/5549/the-homer-simpson-approach-to-social-security

I know you are not political anymore, and I don't want to start up a big controversy or discussion, but I keep wondering how this issue came out in your mind. I wrote numerous pages on this issue to you trying to prove to you the fact that the SS trust fund was only a shell, a facade, a ruse with no actual assets in it, and that SS funds were just a tax, rather than a contribution that was saved. In this article it talks about that fact. I read it and it reminded me of our discussion and I wondered if this was something that you knew all along, found out at some point, or still don't believe. Just curious, not trying to be right or start a fight.

Later.

Thomas

Jonathan: Try to understand that Social Security is not part of the federal budget. It is financed for the next 26 years to 2037. If you want to understand this you have to go to the nonpartisan Office of Management & Budget. This is not politics, just simple fact.

Thomas: in short, the articles you referenced were government propaganda that perpetuate the lie. Yes, SS is not part of the Federal Budget, but the federal budget is funded by the excess revenues collected via the FICA tax. Now that SS is taking in less than the taxes collected, those revenues will come from the general revenues. These is no fund that has been sequestered that can now be liquidated to fund the program till 2037. Such an idea is pure fantasy. You can’t make a system solvent by parsing words like Federal Budget to pretend there is money there when it’s already been spent.

As I wrote this essay to you, I kept saying to myself, surely Jonathan knows this. He must be just pretending. Surely any moment he will send me a note and say, “Just fooling you.” It is literally mind bending and shocking to think that you actually believe that the SS Trust Fund is real. If you want, you can stop here and just admit that you were playing a trick on me, and we’ll both laugh about how naive I was to think that you didn’t get it.

But, in case you are serious, which truly is hard for me to believe, I am 100% convinced of my position. I will not retreat or forget about this issue until you prove to me that I am wrong. We have gone back and forth on this conservative/liberal debate for many years now, and it is time to come to a resolution. This particular issue is a fractal of the entire liberal mind, and it is a good anchor point to establish ground in growing as a conservative. If I am wrong on this issue, then I need to get with the program and learn the Truth of liberalism. If I am wrong on this one, I’ve been badly deceived and I want to know the truth.

Jonathan: Read from the Social Security Administration http://www.ssa.gov/oact/progdata/fundFAQ.html#n7

"By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds."

Thomas: The "special issues" are simply IOU's that the government must pay the recipients. The government sends money to the beneficiaries collected from 1) tax payers, 2) loans from other countries that still believe in America's ability to produce and return valuable goods and services in return for their delayed consumption, or 3) Money printed by the Fed through programs like QE1 and QE2.

Note: Printing money without establishing a contract to produce value will eventually produce inflation.

These "Special Issues" are not securities that fund corporations or other enterprises that produce value for consumption. These "securities" do not produce a profit. They do not represent value that is stored somewhere, growing in value so that they can be drawn down for the next 26 years. I believe such language is used as a purposeful deception to fool the public into believing that the SS Administration actually is saving their money for retirement.

They have used the familiar terms of the financial industry, such as: security, interest, credit, faith, account, obligation, and trust. But, underneath the facade, there is no financial substance. There is no money actually invested and growing through the efforts of a productive enterprise.

The "special issues" filling the vaults of the “Trust Fund” represent no wealth. They will never grow in value, and the wealth they represent cannot be examined, consumed, inventoried, surveyed, withdrawn, or returned to the investor who wishes to cash out.

Interest cannot compound because there has been no contract to engage in productive enterprise associated with this money. There is no production, no labor, and no profit represented by these Special Issue certificates. There is no reinvestment, no possible increase in production capacity, no improvement in the skill of labor, in increase in penetration of market, no satisfaction of demand, and no increase in capital value of the machinery of production. There is no enterprise whatsoever behind the trust fund. It is a sham, a hoax, a front, a facade, a Ponzi Scheme.

They refer to the Full faith and Credit of the government, but what this actually means is that the government can be trusted to apply enough force to the next generation of workers to extract the money I am owed to pay for my Social Security pension.

The Trust Fund and its "Special issue" is merely a formalized instrument that says that the government will pay the contributors (those who were taxed). The administrators of this program are drawing down on the trust capital established over centuries of responsible spending and consumption. But, they are now in the process of squandering the people’s trust in the "full faith and credit" of the government established by long periods of financial responsibility. The FICA contract is a ruse. They have broken trust. This is an example of a government-perpetuated lie.

The Full Faith and Credit simply means that "The government will pay its notes it has contracted to pay." But the government has no productive means of paying back those deposits since it did not invest them. They were spent. There has been a mixing of frames and use of language that has created the the appearance of genuine responsible accounting.

The Social Security system is a Tax. It is simply a means of raising funds to pay for current expenditures in benefits, with the excess revenues being put into the general fund to pay for other government programs/expenditures. This has been the case for many years.

Social Security was given the name "FICA" (Federal Insurance Contribution Act), possibly to hide the fact that it was a tax. I suspect its founders calculated that no one would ever get rid of it if there was a sense of ownership attached to it. I believe that the concept of Social Security is one of the cornerstone programs that was meant to change the character, hearts, and minds of the people to accept, and then embrace government dependency.

Again, I will stand corrected if I am wrong about the storage, deposit, sequestration, and true interest bearing investment of the FICA funds. I will admit my error if you can prove to my satisfaction that the excess monies collected by the FICA tax were either invested in exchange traded securities, or used to invest in the actual ownership, management, or investment in profitable enterprises.

The Federal government took over General Motors, but that was from a borrowed revenue stream, and it was returned to private ownership after an IPO (although I’m not entirely sure the government has released full control back to GM).

If the FICA tax was invested, the amount of money that should have been invested in productive enterprises after 70+ years of its existence would probably be in the trillion dollar range. I know of no such government run/owned corporation or investment fund. Rather, I see only bureaucracies and spending programs. I see no vehicle where wealth is stored in any productive financial instrument or enterprise. The “Special Issue” certificates are a fraud meant to deceive people into believing they are contributing money to a retirement fund rather than being simply a tax to pay for current recipients and general revenue expenditures.

I have heard that this year the income from the Social Security Tax has exceeded the expenditures to beneficiaries. When I first wrote you the article debunking your conception about Social Security back in 2005, the expected break even date was 2017. The unsustainable collapse has already begun.

Jonathan:
re: OMB Director

http://www.usatoday.com/news/opinion/editorials/2011-02-22-editorial22_ST1_N.htm?loc=interstitialskip

"When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government — and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement."

Thomas: The level of spin and pretense in this article was stunning. I can't imagine how we came to have people who lie with such facility running our country and administering our agencies. I am appalled. This is pure propaganda. This just says the government has to pay for the Social Security obligations. There is no Trust Fund. It's a line item expenditure in the budget whether they want to call it off budget or not, it's being paid by a tax, and none of that tax is being saved for later disbursement.

Jonathan:
re: Mediamatters which does an excellent job of fact checking

http://mediamatters.org/mobile/research/201103110035

"[T]he Social Security trust funds are invested in Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard those securities as being among the world's very safest investments."

Thomas: I completely agree with Krauthammer. It is hard to believe that people could be so brazen in telling the big lie to dispute his accusations. The government is engaging in self validation of truth on the order of proving innocence by testifying as to its own innocence. The testimony has no substance whatsoever. The government says that the "Special Issue Securities" are valuable because they are backed by the full faith and credit of the government. They continue with more self validating argument: they are required by law to pay interest, they have always met their obligation, it was all reformed in 1983, and it is solvent until 2037. These are all self declared truths, they prove nothing. There is no substance to the claims. But, it begs the question, "Why are they lying?" What is the ultimate purpose of the lie? Is it embarrassment? Is it covering an agenda? Is it maintenance of a power structure just because it feels good?

There are no sequestered funds. These "Special Issues" are only IOUs that say that the government must pay back the money they took in as taxes, compounded at 2.8% interest. The calculations, the book keeping, the bureaucracy supporting it, the law surrounding it, the statements sent out quarterly, are all elements of the facade. It’s really staggering to realize that we are living in a nation that is willing to engage in such open fraud. And what worries me, is what else such a nation would do if it were willing to engage in a fraud of this magnitude.

Interestingly, the previous article tacitly acknowledges this fact that we pay a Social Security Tax, and we pay for the recipients benefits with that tax. That is a government revenue issue, regardless of whether you want to call it part of the budget or not. The language used is just useful fiction, playing upon the generally ignorant and powerless masses, all meant to deceive people into trusting in Big Government instead of examining structures and processes in which they are engaged. This Trust Fund scam is 1984 doublespeak straight out of the Ministry of Truth.

The real problem with Social Security is not the problem it is causing with the budget now. The problem will be seen/felt/realized in the future since that the baby boomers have not yet retired. But, Social Security Will Soon Be a Big Problem. It will increase the need for government revenue because Social Security is part of the government expenditure obligations (remember the full faith and credit promise?) regardless of whether someone wants to say that it is a separate item not included in the budget or not. Social Security is a line item that must be paid for by tax revenue streams, borrowing, or printing. The FICA tax is just one of those revenue streams. The FICA tax isn't going to be big enough when the Baby Boomer retire and the smaller generations following them have to pay for it. (This isn't a new or fringe concept.)

This will open the door to health rationing. Generations XYZ are going to say, "Pull the plug on granny. Keeping her alive is too expensive. I don't want to be taxed into poverty to pay for medical treatments for a person who has already lived most of her life."

People will be charitable to a point, but when it comes to being forced to give charity to people with whom there is no personal heart connection they rebel if it causes too much personal sacrifice. You can call this cold, un-liberal, un-Christian, but it is reality. At some point all of us reach a limit in our giving. In fact, endless giving to those who will not help themselves is not Biblical. And, we are not even talking about living in a nation that actually tries to emulate the principles of a spiritual people. Rather, we are trying to impose giving on a secular culture that has been indoctrinated with the principles of immediate satisfaction.

People rebel when the distance between sacrifice of income and personal benefit (helping the suffering sick and poor) is too great. At some point the aggregate cost of treating the elderly sick with expensive treatments for a modest return on life becomes onerous. We currently have a "culture that honors life almost at any expense", but there is evidence that this tradition of honoring life above all else is breaking.

The younger and smaller generations after the Boomers will at some point say, "No". The future calamity is so obvious that I suspect that some political power centers, or advocates for a socialist ideology, etc... are purposefully trying to create this collision for the purpose of giving government more power (or some other ideological goal). If the people in power can't see it (the sham of the Trust Fund), they are too separated from reality to be worthy of representation. If they know and continue to propagate the lie, they can’t be trusted and should be replaced with honorable men.

I don't believe the politicians such as Harry Reid, Barney Frank, Nancy Pelosi, Chuck Schumer, Ted Kennedy (now one of the Dead Kennedys) are at their base motivated by heart, connection, and compassion. I see them using the language of compassion to further an agenda. I think they are more likely motivated by an ideological agenda, power, constituency, reelection, wealth, fame, secret organization, spiritual path, or performance payoff the power brokers to whom they vowed allegiance in return for election.

The issue will not be solved by heavy taxation, justified by compassion. The problem of the Poor and the Sick will not be solved by taxing the Rich to give more to the Poor. The problem is production.

The problem is that there is not enough being produced by our economic engine to feed/clothe/house/medicate/entertain... the poor and sick. We are not producing enough as a society to promise everyone an adequate retirement income, medical care, disability....

We are a poor society in comparison to the wealth required for the level of social support that the socialist/Democratic/Obama-Left wants to impose. This is why we are borrowing trillions from other countries, or using our unique position as the holder of the world's reserve currency to print more money to give us the appearance of being authorized to consume more of the world's resources and products.

It appears that the motivation of the Left in their drive to force wealth transfer (authorizing another class to consume other than the class that was involved in production) is to create a dependent voter class. Transfer of wealth is very seductive and creates a constituency, a voter base loyal the the hand that feeds it. But, such actions are simply the power of the state forcing charity, forcing redistribution, forcing a transfer of ownership. In other words, it is government mandated theft.

The wealth of a nation is a measure of its productivity. Production gives moral authorization to consumption. Delayed production by "loans" is a method of consuming without production, but the trust in repayment may eventually fail. It may produce a catastrophic breaking of the world system. The most important underlying issue is "Trust". If at some point trust in repayment, production, or equitable return of wealth with interest fails, the world economic system may collapse.

The concept of "wealth" implies a fiction that the “Rich” have value is stored somewhere that can be spread around and given to the poor. True, there is a small inventory of wealth in the goods already produced, but finished products are in general a small percentage of the total consumption over a period.

The fact is that the vast majority of wealth resides in the capacity to produce by the machine of industry. People only have a valid contract with society to consume if they have produced. Those who are young, old, sick or disabled should be cared for, but such care should be on the local level, starting with family. There is little connection, nor responsibility, associated with the bureaucratic administration of charity. Alienation and scamming the system are common for recipients of such assistance.

The balance between wages and prices, production and consumption, creates the societal economic balance. The economy of markets, production, and exchange is a need driven system, in that people work because they are hungry. The doorway to consumption is unlocked by the key of production. The hungers of men drive the commerce of life. A man’s hungers are never fully satisfied, thus men arise each day to produce. The scavenger plots how to take from others, the man of character trains himself in valuable skill to give service to his neighbor.

We need to increase productivity, not "Spread the wealth around." The "Rich" are simply those who have been authorized to consume by past personal productivity (or because of the authorization to consume transferred to them by the past productivity of others). Those who have become rich by theft, harm, violence have no righteous claim to the credit of consumption they acquired.

The consumption of Rich and poor are both beneficial to the economy, in that they are creating a demand for production. Consumption depleting a man’s credit to consume. In the consumption a man gives his credit to consume to the man who has served him.

Thus, consumption is trading credit for having produced, for current consumption. This creates jobs. If there is less consumption, there is less demand for production, and fewer jobs. The wealth of the rich cannot be transferred to the poor in a meaningful way. The only curative intervention is a boost in economic confidence that products will be consumed.

You may think that this is "unjust" that some have more than others, acquired through either inheritance or enterprise. The disparity between Rich and Poor is meaningful only if the power structure has been so skewed that the workers producing value cannot receive enough credit for consumption to meet their needs.

Social Security was not originally meant to be a Retirement Pension, it was meant as a supplement. SS has lost that mandate and is now the nation's pension fund. It takes care of people’s needs, but only by forcing people to be charitable through taxes. That's not charity. A free people give out of their own willingness to help. A nation of subjects are forced to give to charity whether they believe in the cause to which they contribute or not.

Jonathan:
Re: As to your article:

I don't know who the author is but he doesn't believe that social security should even exist in the first place, so why does he even bother making the argument that it's going broke?

Thomas: (He's going into the world he found himself inside of and he is objecting to the inconsistent principles of that world.)

Jonathan: Because the point of the article is simply to foment ill will among the populace that will further demoralize them, and marginalize their political power.

Thomas: (He is trying to say, Stand up and object to the doublespeak, the facade, the illusion that the puppetmasters are propagating. If that's ill will, let's have more of it. He's trying to marginalize the power of government, and it should be. It should be reduced down to the level of the original minimalist Constitutional limits. We have allowed a socialist leviathan to rise as our government. I wouldn't want these people telling me how to do anything. Their willingness to lie about something as obvious as Social Security is a clear indication of their character.)

Jonathan: According to his logic, perhaps we shouldn't pay for our neighbor's roads, schools, police, fire dept, parks, etc.?

Thomas: (In fact, this nation was established with Constitutional limits against the intrusion of the federal government into the regulation of private behavior. Government was meant to be self-government, and the local elected representatives were to act as the focal points of discussion and compromise between varying viewpoints. A community that wants to have a road, school, police, fire department, and park has every right to organize to create those services. But, those issues aren’t really what is in question. Government has almost invaded out lives to the point of having thought police.

People of good will, good sense, who love self, others, and God, will sacrifice out of choice. But, a society where there is no choice borders on slavery. The ideal society is one where I help others, and others help me. Forcing charity, forcing good deeds produces half-hearted results.

Those who want to push for bigger government, more control, always use the mantras about losing our "police, schools..." They call people uncaring, selfish, and predict disaster if this tax or program is not adopted. We saw a perfect example of the hyperbole in the recent budget debate where we saw Harry Reid say, "The Republicans want nothing more than to see women die." (A reference to mammograms.) The inauthenticity is staggering.

The real issue is productivity. That will be facilitated by releasing men to operate within the boundaries of supply and demand, by removing the barriers and resistance to service.

Jonathan: Personally, if his house was on fire, I wouldn't take the time or energy to pee on it.

Thomas: (He is objecting to being forced to give charity that he believes is unwarranted, unwise, and if continued in the present course will destroy the trust in the "Full faith and credit of the government.". You are objecting to helping a man who is truly in need because he holds such a repugnant economic/political ideology.)

Jonathan:
re: Your article Quote:

"There’s ample room for legitimate debate on how quickly and by what precise methods Social Security should be eliminated. But the overall guiding principle of any such discussion must be that the government should not compel a man to pay for his neighbor’s retirement against his will any more than it should compel him to pay his neighbor’s mortgage — or his neighbor’s medical bills. Instead, the government should leave individuals free to plan for their own retirements (or not) according to their own best judgment — and enjoy the rewards (or suffer the consequences) of their decisions."

Thomas: This argument is hits at the center of the Libertarian philosophy of life. We should each make our own decisions, take care of our own needs, and if there are those who are in need, then by all means help if you feel it is your duty. We are not required, nor can we, save everyone in the world. It is a great goal, but to sacrifice self to the point of equality of suffering of everyone is not required. In the Bible, Paul said in his letter to the Thessalonians, "If a man will not work, he should not eat." I do not know the percentage who will not work, vs those who cannot work. I do know there are many willing to work, but the system has been so perverted and disincentivized that demand and consumption has been lowered, and men cannot find work. This is a bizarre system, where people have needs, are and there are others who are willing to serve to meet those needs, but have no mechanism to exercise that industry. Simply transferring wealth from the "rich" will not be an adequate solution to a problem based in inadequate production. We see in these class envy/class warfare/transfer of wealth solutions the recapitulation of the communist experiment/philosophy captured in the Karl Marx quote,"each according to his ability, each according to his needs."

Jonathan: Most Americans are poor, hungry and sick and need help. Spend some time reading this:

Thomas: (Most Americans are not poor, hungry, and sick. Some of the ones who are sick may be so because of their own choices. Likewise some are poor because of their choices. Some are poor because the system is inefficient. Other problems with productivity and prosperity can be laid directly at the feet of government attempting to regulate everything, and producing an excessively difficult, costly, and thus non-competitive entrepreneurial environment.

I see a government more concerned about forcing equality and protection of everyone from harm than one dedicated to productivity and its accompanying prosperity. Productivity is the solution to supplying the needs of the sick, poor, and hungry.

A slavish worship of equality has replaced the pursuit and exploitation of opportunity that made America great. We were once risk takers, thinkers, and bold explorers, but that spirit is being legislated, regulated, and educated out of us. The socialist utopia where safety, security, and protection from all harm and risk will not bring utopia. The socialist nanny state nanny state directly opposes the spirit that can actually feed, clothe, house, and medicate the sick and poor.

The Socialistic values and requirements are essentially a state imposed religion. We have been indoctrinated into, and had imposed upon us a Socialistic philosophy of life, values, and economy. Its tenets include, government knows how to best regulate life. And while the Constitution allows such meddling in the affairs of men at the State level, it prohibits the Federal government from such acts.

I had a plumber come in to see me this week who said he spends 50% of his creative time and energy in trying to comply with the requirements of taxation rather than increasing his productivity. We have placed huge resistance and productivity overhead as legal obstacles that interfere with production and productivity.

We give incentives to corporations to export jobs. We still have the best work force in the world. But, with the forced dumbing down of education, that advantage may disappear. (I recently saw a documentary about a school district that fired a science teacher for presenting the scientific literature that showed the questions about evolution.)

We still have a huge manufacturing base, but that is diminishing as companies attempt to meet the demand for low prices. The net effect is a transfer of our production capacity to countries with low cost labor. We could compete in many of these markets, but there appears to be an administrative/regulatory bias against our own production. We impose environmental pollution, work safety standards, minimum wage laws, health care benefits, on our own workforce, but not on products produced by other countries. The playing field has been tilted against us at our own hands. We should have tariff that penalizes those who do not meet standards we impose, or else let our industries compete unfettered by regulations other than those they chose to self impose. We have thus inhibited job creation and production by our own inequitable treaties and trade agreements.

The solution to the problem of the poor, sick and hungry is production, not transfer of wealth (i.e. changing who is authorized to consume by government fiat). There may be a small burst of consumption by the wealth transfer, but if there is no commensurate increase in production, the transfer will simply make all men equally poor. Equality is not a supreme virtue in society. Leaving the top open is good. The regulation of the passion of men for ever more should be tempered by a sense of compensating others fairly.

The economics article you referenced is about class envy. It feeds on the belief that because someone else has the right to consume, then I don't. This is not true. They have the right to consume because they have a history of wealth production (theirs or their ancestors).

An economic entity (world, nation, state, family, or person) only becomes wealthy because of its production. Wealth does not reside in money, it resides in useful goods and services. Wealth is tightly tied to the concept of the ability to produce, since productive capacity is the immediate precursor to the goods and services that are the tangible manifestations of wealth. Those who are "wealthy" are those that society has given credit and right to consume. To righteously spread the wealth around we need to increase the opportunity to produce. Allowing banks to establish contracts for production, and generating new money for circulation upon the establishment of realistic contract, is the most sure method of generating a steady rise of new societal wealth.

Those with high incomes are in general those with greater skill in some arena of life. Our tax laws have made it almost impossible for anyone to accumulate great wealth. After earning a wage, government takes enough away that the typical worker has no resources for charity, and has only enough for meeting current needs.

Thus, government appears to be the only possible agent of charity. Men have been robbed of the soul enhancing experience of giving to another person in need, because ther resources have already been taken from them.

Government appears to be committed to giving the right to consume to someone else who didn't earn it, rather than allowing the rightful owner dispose of it as he chooses. Such a philosophy is seductive to the recipient, and we are now in the phase of deToqueville's warning about democracy failing when people discover they can vote themselves a living.

Removing the reward for labor causes men to fail in motivation. Theft of productivity demotivates men. When men receive little reward in proportion to their effort, they will not risk or push to increase their productivity. When government takes from the productive class, without their assent, such behavior is theft. It has been santized and repackaged as compassionate liberalism but it is state enforced theft, validated and enabled by government and the resources we give to government to oppress us.

Inequality is not the prime evil. Rather, sloth, intemperance, and a system that interferes with personal industry is the problem. People are motivated by helping self and others, when it is done freely. Placing obstacles in a man’s path discourages him. Taking away rewards demotivates him. I believe we have a government which is trying to force a socialist utopia upon us. Sadly, it will create a suboptimal dystopia by the very policies it considers helpful.

The Constitution prohibited the interference of government in the affairs of the States in the 10th Amendment, but that has been largely overridden. Those who want to create a new social order have sought to overthrow the bonds of the Constitution, and have found their plausible vehicle in the Commerce clause.

Article 1, Section 8, Clause 3; [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes

A large part of the Constitutional limitations of the Federal government has been invalidated under the color of "regulating trade" among the several States. This is a travesty.

Jonathan:
Re: Inequality Is Most Extreme in Wealth, Not Income

http://economix.blogs.nytimes.com/2011/03/30/inequality-is-most-extreme-in-wealth-not-income/?scp=2&sq=wealth%20distribution&st=cse

As you can see, the nation’s income distribution may be quite lopsided, but its wealth distribution is even more so.

The top 1 percent of earners receive about a fifth of all American income; on the other hand, the top 1 percent of Americans by net worth hold about a third of American wealth. (Note that the top income earners are not necessarily the same people as the top net-worth Americans — after all, lots of high-net-worth people don’t work or have much else in the way of sources of new income.) Wealth-related inequality has also been relatively stable over the last few decades, whereas income-related inequality has been growing since the ’70s.

Jonathan

Thomas: The question is fundamentally whether the "wealthy" are consuming disproportionate resources.
1) Are the wealthy thus preventing the poor from satisfying their needs because of their consumption and resultant diversion of production?

2) Have the wealthy taken so much credit for consumption (money) that the poor cannot meet their needs?

3) Is the productive capacity for food, clothing, shelter being diverted to the consumptive needs of the wealthy, so that there is inadequate goods and services available to the sick and poor?

The wealthy merely have the right to consume to the level where they are not interfering with the production of wealth needed by the sick and poor to survive. Such diversion is in fact seen in the oil rich nations of the Mid East where palaces and nuclear weapons are the only place where production is focused.

Beyond that, the disparity of wealth is immaterial, and agitation about “Inequality of Wealth” and calls for redistributing wealth are probably just tools used by opportunists to mobilize and secure the perpetual loyalty of a voter base.

Limits on wealth, limits on income should be regulated by the market. If someone is making too much, someone else who is hungry will be willing to do the job for less. If the marketplace is transparent regarding policies and compensation, income will reach its natural equilibrium.