The inequality of income in the US is due to lower interest rates. There is basically no risk of borrowing for entreneurs who fail while hard workers who save have no safe avenues to put their money.

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outsourci...@yahoo.com

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Jun 10, 2020, 3:56:20 PM6/10/20
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In the past hard workers who were not risk takers saved money over years and got guaranteed returns from the federal reserve which took care of them. There was an incentive to work hard and save. Risk takers especially entrepreneurs had to actually take a risk by paying the higher interest rates. Borrowing had a real cost to
It. Therefore ther was a sense of morality which worked both ways. Risk had a price, a cost to
It and only the truly successful risk takers succeeded. The ones who added real wealth by creating sustaining businesses. The financial sector was better protected because millions of middle class people who did not want to take risks saved their money and got quite good returns from the banks and govt bonds. Those who preferred taking a risk and investing in the stock market had that option but many who
Preferred the safety in CDS ( fixed deposits) in banks or in govt bonds had that option as well. Today with such low rates everyone is basically forced to invest in the stock market or other avenues like gold, real estate etc. and which by their very nature are susceptible to volatility.
On the other hand entrepreneurs today take no real financial risk. The cost of borrowing is so
Low that it is insignificant.
The end result is that the few who simply have ideas (even if they fail) create enough wealth in the hype since everyone is chasing the stock markets. The many who simply want to work hard have no safe avenue to put their savings and are forced to invest in the stock markets. The whole game is rigged so only the top players get the enormous benefits in stock deals and options etc. The vast majority get the crumbs and so the inequality of income gets even further away and increases even more.
If we go back to the days of higher interest rates we will once again get more stability in our financial system worldwide and we will
Also start to see more equality of income especially in the US.

outsourci...@yahoo.com

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Jun 10, 2020, 4:10:38 PM6/10/20
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Just to clarify I meant the RISING inequality of income in the US.
Inequality of income has been steadily rising in the US over the past thirty years. Ever since Clinton introduced that act (bill) which basically resulted in lower and lower interest rates ever since.
We have been seeing a situation where due to very low cost of borrowing there is virtually no financial risk to entrepreneurs of today as there was in the past. So even if these guys fail they really don't lose anything. There is no risk for them. They still end up generating wealth for themselves inspite of failures. And the ones that do actually succeed get an inordinate amount of money. Far more than what they should Get. However since even the failures end up
Making money due to all the hype we end up with even more income inequality. Especially since the millions who work hard to save their money have no safe place to invest it in. They end up being forced to
Invest in risky assets like stocks or real estate gold. All of these are susceptible to volatility.
We basically have a situation that anyone who comes up with an idea creates wealth even if they fail. And that wealth that is destroyed by them from the peak price of the stock to when it crashes to its low that destroyed wealth comes from the many who worked hard but had no safe place to Put their money and were forced to
Put it in the stock Market.
This situation will keep happening till we see a more balanced situation in the interest rates. In the US we need at least 2 to 2.5% interest rates for the 30 year treasury bonds and maybe even higher depending on how inflation plays out.

outsourci...@yahoo.com

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Jun 27, 2020, 2:18:46 PM6/27/20
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However with so much inequality of income and vast sums collected by few individuals it would be unfair to give them these US treasury rates of 2% or higher. Instead take the current yield on a 30 year US treasury bond. Add 0.25% interest to those with TOTAL BOND value of under one million dollars. From let's say half a million to a million dollars TOTAL. ( that is counting all the bonds they own must not exceed a total value of one million dollars. From one hundred thousand to half a million give the person another 0.25% or half a percent higher than the current yield on a 30 year US TREASURY BOND. And on any person who has a TOTAL VALUE of US BONDS that he or she owns under one hundred thousand dollars than give them 0.75% over the current yield on a 30 year US TREASURY BOND.
This will ensure that the poor and middle class who save will get higher rates encouraging them to save in safe treasury bonds while the vast sums of money put by the rich will earn the very very low interest rates currently prevailing. This will bring more stability in the financial system and also encourage savings amongst the poor and middle class.
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