Home » Economy, Inflation

The Widening Gap Between Rich & Poor

20 May 2010 2 Comments

Yahoo’s Tech Ticker recently did a segment on the gap that is increasing between America’s rich and poor.  For anyone who understands the economy, specifically the Keynesian policies, this is a no brainer.

The Federal Reserve fueled inflationary policies will always result in a widening gap between the rich and the poor.  Why anyone can’t see this is beyond me.  Think about this.  Let’s just look at Wall St. for a second.  Wall St. makes a killing – we’ve all seen the insane bonuses headlines where Goldman employees are raking in billions – but, when Wall St. takes a huge hit, what happens?  What happens is the Federal Reserve and the government jumps in to save them.  It’s the origin of the term “privatized gains, socialized losses”.

The problem is that by the government absorbing the massive losses of Wall St, this is very inflationary.  The Federal Reserve prints the money to backstop the losses (in the name of “saving the financial system” – more like saving the bankers).  Printing money leads to a loss of purchasing power for Americans.  Who does this impact the most?  The poor.  When the poor are barely getting by on very few dollars a day and then those dollars are worth less, they have even less.  The end game is that the bankers continue to make a killing while the poor struggle more and more.  It always happens this way and will continue to occur.

You don’t need to look far to see real examples of this.  Look at the past year.  Goldman Sachs (and other firms) continue to pay out huge bonuses while the American economy is in shambles.  The poor are struggling more than ever.  Food stamp usage is at record highs.  America… the land of two economies.  Only when Americans demand that the Federal Reserve is done away with will things move back to a level of equilibrium.

You can see Yahoo’s video segment here:


  • financial_opera said:

    The word "technology" has a pleasant sound to it, especially for scientists. It seems to promise infinite benefits for mankind. It is true that technology has contributed significantly to the economic development of the world. But we must always remember that it has a dark side. The development of new technology always expands the gap between rich and poor.