Is unearned income acceptable?

Wow what incredibly slippery slope. I think the government wants every single person's inheritance. For most people, that is the only way they can get a home. A family, even duel income, (feel sorry for the kids), renting a 1700 dollar home for their 3 kids, will not be saving a substantial down payment for a 350 000 dollar home, and that isn't living in most cities, thats the country, at least here in Canada.

They're coming for the baby boomer's homes.

Yes, people have a right to their inheritances. I personally don't support the creation of money and support a kind of advanced and more people run version of the Venus Project. However, not an agenda 21 corporate run, council of 12 version of the Venus Project. Like eutopia benevolent societies in the cosmos who have both FREEDOM, and EQUALITY, and each person is developed and intelligent and can caretake whole systems without harming anyone.
There are NO SLAVES.

However, in this near hellzone, the problem with the 1% amassing most of the worlds resources needs to be addressed via other means than the government stealing people's inheritance, which by the way is bought with their AFTER TAX DOLLARS. All you assets and house payments are out of your AFTER TAX DOLLARS and belong to you and your children.

Come on folks, the topic is wealth extraction vs wealth creation not governments role in society nor taxes.

Money can be invested in ways that create wealth rather that just extracting it by the purchasing of already existing commodities that you know others need and raising the cost to extract a profit from society. Why is this so hard for so many of you to understand?

Monopolies on needed services are another example of extraction rather than creation of wealth.

a reply to: AlaskanDad

The money that does not create anything new is supposed to circulate. The article assumes that we need more growth. More is better-is not always better. Exponential growth is created to pay interest on the money you borrowed to grow last year. The perpetual debt cycle is real. Exponential growth is limited by finite resources. We need to learn how to stabilize, with what we have and make that work, somehow. That is if humans want to survive.

A mortgage literally means "death pledge" Under the current way of purchasing homes, no one is gonna risk being a landlord without leverage. It makes no financial sense to buy housing for cash. Mortgages freed average people from monopolies on housing created by unscrupulous landlords. Did you see "It's a Beautiful Life", where the local bank could not finance housing; and, the slumlord had the only housing in town?

I am not saying this is the best way. There are abuses; and you can create a monopoly with real estate.

I have a feeling that you want to say something, but you want someone else to say it for you. How do you suggest providing services for the maintenance of living expenses, for those who either do not want to own or can't get a mortgage?

They had a social solution in Libya. The government would give you a house and then charge you zero interest until the house was paid off. Well, we can't have that. You saw what happened to Libya.

a reply to: ogbert

There is so much truth in what you have just posted!

Remember I did not write the article and I feel there could have been better examples of wealth extraction than rent. To tell the truth I did not foresee a solution when I posted this article, rather I felt others might benefit in learning the differences between wealth extraction and its creation.

After a few pages of comments, I think if a solution was possible it would be that wealth extraction must be stopped and wealth creation be practiced. In your scenario of slumlords we see wealth extraction at its worse, at least when housing is the topic.

The Libya example is interesting and if our the worlds governments were free of corruption such systems could be our saviors, sadly corruption and greed of sociopaths will never end.

In the mean time we the individuals need to live our lives without harming others through greed and add our voice to pointing out there is a big problem with our current system.

a reply to: ogbert

There is no such thing as "wealth extraction". The entire premise is false and a convoluted way for the author to try to make it seem like money is being stolen without directly saying it.

Banks, investors, etc all serve a purpose that keeps the economy moving. Just because a service does not create something tangible, does not mean value is not being provided. Money does not exchange hands unless something of value is being provided between the two parties. In fact, the only time money is "extracted" is when government decides to take a cut by force in the form of taxation to redistribute wealth.

originally posted by: Edumakated
a reply to: ogbert

Banks, investors, etc all serve a purpose that keeps the economy moving. Just because a service does not create something tangible, does not mean value is not being provided. Money does not exchange hands unless something of value is being provided between the two parties. In fact, the only time money is "extracted" is when government decides to take a cut by force in the form of taxation to redistribute wealth.

The banks are making a profit from using money from the fed and by the fed raising the amount of money in circulation it is devaluing everyones earnings. Thus they are extracting wealth twice from the average person taking out a loan. It would be different if the only loaned money that was from savings, but those days are long gone.

Your weapons are for killing your fellow man, if they are part of a government or if you decide they are takers or communists?

You have a basic right to your property, and without the ability to defend your person and your property, it is up for grabs to anyone who decides they wish to come along and simply extract it from you.

How is it you get to decide when wealth is illegitimate and therefore fair game for extraction? If I had the means to create it, it is my property, and therefore, I have a basic, unalienable right to it. There is a basic rule for this - Thou shalt not steal. And wealth extraction is simply another term for theft. I think you might at least agree to that.

How does that relate to the difference of wealth extraction vs wealth creation?

It relates in the sense that without the means to protect my wealth, it is fair game to be taken/extracted from me by anyone for any reason who has the means to take it.

Without security in one's person and property, there is no real incentive to generate wealth. I usually use tomato plants for my basic examples, but I think I will use sheep today.

The shepherds want to take care of their sheep because if they do a good job, the sheep will have lambs and their flocks (their wealth) will increase. The care they take represents their investment in their flocks. The more they invest, the more successful their sheep tend to be. But there is a risk. There are always wolves and other predators who like nothing better than to eat sheep. And if the shepherds cannot protect their flocks, they lose their sheep no matter who much care they take. This is why they have dogs. They dogs are for protecting the sheep from the wolves. The dogs are like guns.

When the king passes a law that keeps the shepherds from having dogs, the wolves run wild eating as many sheep as they want because the shepherds can't defend their flocks.

How is it that wealth creation rather than extraction earns one the tittles of pinko or communist?

It does when you consider what I own to be yours to extract. I call that theft.

If you weren't there helping the shepherd tend his sheep, why would you think you deserve to help yourself to any of his lambs? You aren't creating any wealth by taking his lamb. You are simply extracting it, and in the end, you both wind up poorer. After all, you have no idea what plans the shepherd might have had for that lamb. Sure. He might have been intending to sell it off for meat, but he might also have needed it to replace one of his breeding ewes. And on your end, you can't easily start a productive flock with just one lamb. Odds are that you either going to sell it for short term gain or eat it. Either way, any benefit your realize is temporary and you will soon be back to "extract" more of the shepherd's hard-earned wealth.

After all, since you can take his sheep whenever you want without having to labor for them, what incentive is there for you to husband those resources or even learn how to save?

Another famous proverb here is ... you give a man a fish (or sheep) and feed him for a day, but you can teach him to fish and feed him for life. Your wealth extraction just gives away fish (or sheep). So long as the shepherds are still stupid enough to work for your gain ... there is no need to actually learn to do it yourself.

Is it wrong to consider how your actions effect others?

Thinking only of ones self and not considering how it may effect others is the definition of a sociopath.

It certainly is, and sociopaths love it when they can simply take what others have worked hard to make.

originally posted by: Edumakated
a reply to: ogbert

There is no such thing as "wealth extraction". The entire premise is false and a convoluted way for the author to try to make it seem like money is being stolen without directly saying it.

Banks, investors, etc all serve a purpose that keeps the economy moving. Just because a service does not create something tangible, does not mean value is not being provided. Money does not exchange hands unless something of value is being provided between the two parties. In fact, the only time money is "extracted" is when government decides to take a cut by force in the form of taxation to redistribute wealth.

so...how did the "government" extract anything during the 2008 depress...I mean recession?......seems like money (trillions), was exchanging hands for valueless products, called "derivatives"...all unregulated by any world government, and invented solely by wealth managers, and financial firms. the "value" you speak of, that was created by derivatives, was simply a fraud of epic proportions....and good news!!!...derivatives are STILL being bought and sold with very little oversight.

a reply to: ketsuko

Blah blah blah...

Where in this thread did I ever say I had a right to take anything from you???? I have not nor have I implied it!

Where in this thread have I said I want to extract any of your wealth in this thread????

And how reading this thread do you get I want anything from you???

You have an interesting way of turning everything that this thread is about into being about taking from you!
Are you possibly a slumlord? If so I never said in this thread that we should take a from slumlords!

I want nothing of yours and wish everyone including you a happy life.

Edit: If you read what I have said in this thread you would see I have not said anything even close to what you are claiming, nor am I implying these things!

a reply to: AlaskanDad

Here's the thing - Anything you say you want to extract from the so-called wealthy also gets extracted from anyone in the Middle Class (like me) who has anything at all related to what you are ticked off the so-called wealthy have.

I gave you two examples of investment income that Middle Class folks have that you call illegitimate. We have 401K and education savings accounts. You call income earned on those types of accounts illegitimate, and yet they keep us from being drains on the system when we retire and free our children from years of crushing debt to the government.

You seem to have a beef with rental property, but I had a friend who used rental income on properties she and her husband bought and refurbished to fish themselves out of college debt and save enough to buy their current piece of farmland. They used their income smartly.

If I save the money to buy a piece of property and keep it up to livable standards. It sits empty as I can't live in two houses. My choices are to sell it or to rent it to a family who needs living space. It represents an economic win/win in the contract. They get to have a living space for less than it would cost them to buy it outright and they don't have to pay to maintain it. They are actually living there at a significant savings. I get to realize a return on my initial investment over time as they pay me rent.

You can argue this is unfair, that I am fleecing them somehow, but there is this thing called a "lease." Both parties are supposed to read, understand and agree to this contract before any money changes hands. If the person doing the renting thought it was a bad deal for them, they are under NO obligation to enter into the contract at all. If my lease agreement truly IS a bad deal, I shouldn't have any renters at all and thus, no return on my investment.

You remind me of the people who believed in predatory lending.

What kind of person signs something without fully understanding what he or she is agreeing to?

a reply to: AlaskanDad

Wow I am quite agitated about having my posts here completely twisted into something so different than I have posted.

I feel violated by such lies!

a reply to: ketsuko

You should read the article and read what I have posted rather than just going off on a nonsensical attack on me!

Quoted from ketsuko
You seem to have a beef with rental property, but I had a friend who used rental income on properties she and her husband bought and refurbished to fish themselves out of college debt and save enough to buy their current piece of farmland. They used their income smartly.

originally posted by: AlaskanDad

Remember I did not write the article and I feel there could have been better examples of wealth extraction than rent. To tell the truth I did not foresee a solution when I posted this article, rather I felt others might benefit in learning the differences between wealth extraction and its creation.

originally posted by: Edumakated
1) People are paid what they are worth. Wages are the result of supply and demand in a free market. Only when you have wage controls do wages not represent what they are worth. When the supply of low skilled workers exceeds the demand for them you get low wages. This is why in some areas fast food only pays minimum wage while in other areas the very same low skilled job might pay $15/hr. This is why athletes make a lot of money. Actors make a lot of money. Certain business people make a lot of money. The value you provide to the business has to exceed your cost. A typical minimum wage worker may only be generating $10/hr in actual value to the employer. If that employer suddenly has to start paying $15/hr that workers value still is at $10/hr. Therefore, the business is going to either fire that person or look for other ways to increase productivity such as by utilizing technology instead. They may also have to raise prices which causes inflation.

It's interesting isn't it, how a person's "worth" is decided exclusively by the people who have the most to gain by determining that they are worth very little, indeed. How much say do workers have in their own "worth?" How much was the work of slaves worth in the 1800's? Sharecroppers between the Civil War and WW2? How much was child labor worth in the mills and mines? Is your answer "nothing"? 'Cause that's what "the market" determined they were worth. That's what "the market" will always determine labor is worth, if labor itself has no input into its own valuation.

Tell me, is the value of a domino's pizza delivery guy less in Georgia than it is in Oregon? In Oregon, the minimum wage for a tipped employee is $9.10. In Georgia, it's $2.13. Does Domino's just not hire delivery people in Oregon? How about California ($9.00)? or Alaska ($8.75)? Well, okay, pretty sure Alaska only has domino's in Anchorage and maybe Juneau, but there are other tipped businesses, they have to pay the state minimum wage too.

How is it that those states with higher than federal minimum wage are doing just fine, while those states that set their standards right at federal minimum wage are struggling economically, and are per capita the largest recipients of social programs and federal spending?

2) Poverty is not next to impossible to escape. What you are missing is that most people are mobile between classes. The poor in one year are not the exact poor people in the next year. Most people are able to move up the class ladder through hard work, education, etc. Even if that person cannot escape poverty, if they do the right things, their children typically will be able to.

A good example of this is my own family. My grandfather was a share cropper, never learned to read, and had a third grade education. However, he knew education was the key. Despite raising my father in the middle of Jim Crow south, my dad still go a great high school education. My dad became a fireman and the a policeman and right into the lower middle class. My dad taught me the same thing. Education is important, get some skills, work hard, etc. I went to college and then a Top 3 business school. I'm solidly a 1 or 2%er income wise now.

of course. No one would lie about a perfect rags-to-riches story and claim to be making a seven-digit income while arguing on the internet. However, I'm afraid your anecdotal evidence is a sharp exception. For most of the nation, there is little to no upward mobility, largely because cost of living is not met by wages earned, because income is not keyed to inflation. When prices go up but your paycheck stays the same, you are actually becoming poorer. This prevents mobility.

With that said, there are people who suffer from generational poverty. Most of these folks, particularly in the US, can't move up because they get sucked into the poverty life where having children out of wedlock is the norm, dropping out of high school, and a whole host of other cultural dysfunctional factors that prevent them from moving up. This is exacerbated by the fact that our economy is getting harder to compete in when you are not educated due to technological advancements and global competition.

And how, pray tell, does one gather such an education, with costs for education being so magnificently inflated? There are no shortage of young people coming out of college with worthless MBA's and crippling debt. How is this helping them? Tell me, should they simply accept starvation wages that by design keep them on starvation wages? This has been the experience of no small number of people who have met every standard you just set for them, only to have their "value" set to zero by "the market." Because, again, when labor is allowed no say in its own valuation, that value will inevitably be as close to zero as possible.

And I wonder what you believe should happen to those people who just happen to not be very smart or skilled. They exist, without a doubt. Should these people be condemned to live under the poverty line, scraping change out of gutters just to try to get by?

The social programs you mention are available because politicians realized they could buy votes with other people's money. We now have one party (Democrats) whose entire platform is pretty much based on taking from one person and giving to another. The programs have been ineffective and in many cases serve to trap people in poverty. Govt has spent a trillion dollars on the war on poverty and made ZERO progress in eradicating poverty over the past 50 years.

Funny then, about the states with the largest receipt of those programs being pretty solidly "red," huh? here's a challenge for you. Go to an Alabama trailer park. Find me a Republican voter there who isn't receiving TANF. In the same trailer park, find me a TANF recipient who votes for whatever party they want, who isn't also running themselves ragged at work for $7.25 /hr. Possibly at two jobs. Likely their spouse is as well. yet still ending up broke enough to be in a trailer park and receiving food stamps.

It's rhetorical of course, I don't expect someone with a seven-figure income to traipse around an Alabama trailer park. Especially when they could be so much more productive arguing with me on ATS.

The government has spent over a trillion dollars on the war on poverty since 1964, that's true. For perspective though, the United states has spent five trillion fighting its "War on Terror" in since 2001, and since 1971, well over one trillion has been spent on the "Drug War" (operations alone, I found no solid figure for the cost of incarcerations, trials, and of course, there's no sufficient way to apply cash valuation to lives lost)

Of these three, which has been more successful in terms of cost:benefit? Of these three, only one has produced worse results for the American people when its funding is cut. And it's not the war on terror or the war on drugs. Fact is, the war on poverty was getting damn good results until its programs began getting chopped apart and defunded. Do you know why that is? Please, I want to hear your thoughts on that.

originally posted by: Jamie1

The alternative to investment income is ALWAYS being forced to trade your time for money.
.

Which, IMHO shouldn't be tagged as "income" either because, really, aren't you kind of breaking even? A fair trade. Why should that be taxed?

a reply to: TheTengriist

A person's worth is determined by supply and demand. It has nothing to do with what the business wants to pay or what the employee wants to be paid. The free market determines the inflection point which is that person's salary. This is why as I stated in some areas fast food works make well above minimum wage where in other areas minimum wage is the standard. This is basic economics.

Competition among employers can actually raise wages when employers feel they have to pay more for better employees. This is why new lawyers who graduate from say Harvard can command $160k/yr where law grad from any third tier law school can barely find a job. You have way more lawyers than you have Harvard trained lawyers. So the Harvard ones can command a premium. Basic supply and demand.

If you believe businesses are being greedy, then stop talking shizz on a message board and start a business that pays your employees $50/hr or whatever you think is a fair living wage. Nothing is stopping you from running the business as you see fit.

Simple question, if we can eliminate poverty by simply raising the minimum wage, why not pay everyone at least $100/hr? Why stop at $15/hr? Surely $100 is better than $15, right?

a reply to: Edumakated

I agree with you. When aII is said and done the money is supposed to be circulated. The banker, landlord or whoever did not create new wealth, is supposed to spend the money on other services. The only problem is when the money is hoarded and does not circulate. Yeah nothing new is directly created, but, but indirectly it is.

Unfortunately, most money is invested in new war technologies. I say take the money outta war and put it into science.

a reply to: Edumakated

You are completely off topic, here is a thread about minimum wage use it if thats what you want to discuss! The topic of this thread is wealth extraction vs wealth creation.