PARETO WAS RIGHT?

Vilfredo Pareto postulated that the 20 % of a population drive the economy because they control 80 % of the wealth.  They are the "vital few".  Thus, 80 % of the population only controls 20% of the wealth and how this "trivial many" decides spend their money is of no consequence. 


Today in the United States the percentages may have changed to 97% and 3% but the truth is still there.

My surprise is that this seems to be a negative thing. 

The history of the past sixteen years shows that, during the first eight years, when the trivial many were allowed to participate in saving, investing and building toward a future, they tended to get richer and the economy tended to expand and grow.

Over the next eight years, when the wealth was allowed to return to the wealthy, the economy went down the toilet

My theory as to why is this:  Rich people don't need more money.  So when you give rich people more money they start to play with it.  Playing with money one doesn't need leads to dangerous speculation and risky ventures.  So what if I lose this money, I didn't need it in the first place.  I don't care if I lose it and I stand to make a bundle if the venture works.

The rich are also very good at playing with other people's money.  We trivial many just can't wait to trust them.  They must know how to grow money - they're RICH!

The rich will always be with us.  Being wealthy is the reward for being excellent (or very lucky).  I think Pareto was right but is a way he didn't see.  The vital few can be very predatory and greedy.  George Bush is just finishing up an eight year experiment that seems to prove that when you give tax breaks to the rich, the economy eventually gows down the crapper.

How about this for an economic recovery package.

Stop rewarding debt!!!

Encourage secure growth savings

Call for all patriotic (and otherwise ) citizens to PAY THEIR FAIR SHARE! 

Individual Income Tax - no exemptions, no deductions, period. no different kinds of income (wages, interest, capital gains, windfalls etc. )

Under $50,000 you pay 10% (Hell pay up, you are getting a lot of governmant services )

$50,000 to $499,999.99 you pay 20%  (Come on, pay up, you can afford it)

$500,000 and up you pay 30% ( you rely on the government to protect your wealth and be thankful you are not getting all the government you are paying for)

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