Debt jubilee seems an attractive idea. Why not just write off all the debts, wipe the slate clean and start again?... even if the very rich could be soaked, there is a bigger problem. The rise of the middle class means that a majority now own some wealth. And they will not easily give it up. Middle class wealth owners fear loss far more than the very rich. And with reason. For them, a fall of -- say -- 30% in the value of their house is a considerable hit to their net worth, as argued by Atif Mian & Amir Sufi in their book House of Debt. It can completely wreck their plans

If we are serious about reducing wealth inequality, we could think about very high taxes on top incomes, and perhaps wealth taxes. And if we are serious about reducing income inequality -- from which wealth inequality ultimately stems -- we could think about a universal basic income coupled with a land value tax and a progressive income tax system. If we want to break the cycle of wealth inequality down the generations, we could impose very high inheritance taxes, perhaps as much as 100%, on unproductive assets such as residential property. And if we really want to end the dominance of debt in our monetary system, perhaps we should be looking at forms of money that are not backed by debt.

Coppola ends up focusing on the reform of the monetary system mentioned at the end. We agree... and its funny how no one seems to take note of the fact that, during the best exemplar period of Western civilization -- the post-WWII period in the US -- incomes were much more equal. This is irrespective of total wealth (of course, the Gini coefficient was much lower), it's that pre-tax income was more equal. In other words, progressive taxation was never responsible for income equality -- it must have been something else. And that "something else" was a less biased monetary system: hard asset backing, and lack of Federal reserve craziness in intervening to tilt access to capital to the rich...

Comments: Be the first to add a comment

add a comment | go to forum thread