A rocket without fuel is not going anywhere! So what is the solution?

If the poor consume the most and the rich defer consumption indefinitely, and the rich take an increasingly larger share of income and the poor end up funding consumption from increasing amounts of debt, we will have a rocket without fuel and without fuel this rocket is not going anywhere. 

Capitalism is an essential method for allocating scarce resources yet we clearly have an inherent weakness in the machine.   How do we keep the capitalist system’s strengths while preventing its imbalances?   We need to reset the system periodically and this probably involves preventing intergenerational transfers of wealth.  

Please note the poignant post from Zero Hedge on the financial equality in the world today: The Definitive Rich Vs Poor Chart- The Rich Hold Assets, The Poor Have Debt

And a link to one of the reports quoted – Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—an Update to 2007

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  1. Pingback: Inequality, Capitalism in crisis, the democratic option or the way of the demagogue | Depth Dynamics

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