One of the reasons that the income gap is widening is the impact of the gain in the stock market – wealthy Americans invest disproportionately in the market. The less wealthy, for several reasons, don’t invest in the market.
Because of this, those wealthy Americans that DO invest in the market are seeing gains to their income due to the power of the stock market – the gains are flowing to the wealthy.
Consider this fact when reflecting on arguments AGAINST private investment accounts in place of social security*. The idea that we reform social security away from the government trust fund to a privately held account that could be invested at the discretion of the individual.
The arguments against this plan is that it would expose the money to the vagrancies of the stock market and places the individual at too much risk.
This is very similar to the arguments presented by the liberal when it comes to the importance of money. It goes something like this:
There is more to life than money, therefore a degree in Renaissance Art of Western Europe is valuable in its own right and a career in that field can offer a full and rewarding life. The rich get richer and the poor get poorer – we need more redistribution of the money!
On the one hand, the argument states that money isn’t important and then becomes surprised when people who do value money have more of it than people who don’t value money.
The stock market is a massively effective method of building wealth. Buying stocks during the recession, not selling, was responsible for astonishingly large gains for many many people.
If you care about income disparity, and we know that a large reason for this disparity is the market, how can you disagree with private social security accounts?
* I say this knowing full well that the REAL argument against private social security accounts is the same argument against Obamacare – Individual Liberty. Social Security is nothing more than a mandate to save money and a private account would be no different than forcing people to buy health insurance.