Quote Originally Posted by CoccoBill View Post
I think I was unclear about what I meant with that. From what I understand the argument is that in order to help the poor, we should give more money to the rich. I have let myself be told, that this only increases income inequality, that while it may be the best thing for the growth of the economy as a whole, it will only give marginal benefits for the majority, while giving enormous benefits to the rich. If you look at the Gini coefficients of countries, you'll find that the countries with the lowest value (least income inequality) are the western prosperous countries, and the highest values are found in the third world. Looking at the trends you'll see the Gini coefficients lowering linearly with economic growth. If we measure overall well-being with the size of the economy without looking at the distribution, we're getting a distorted view.
I think you made two different points here, so I'll split them up.

I think I was unclear about what I meant with that. From what I understand the argument is that in order to help the poor, we should give more money to the rich. I have let myself be told, that this only increases income inequality, that while it may be the best thing for the growth of the economy as a whole, it will only give marginal benefits for the majority, while giving enormous benefits to the rich.
Giving money to the rich is a bad idea. I don't know of anybody who proposes doing that. Supply-side reformers propose marginal rate reductions for all income brackets (Reagan focused on all brackets even though this is often unnoticed) for the purpose of incentivizing more work. Supply-side reformers also propose regulation reductions that will reduce the quality and quantity of products/services and/or reduce their costs. The only people who are "given" money in our economy appears to be many of the poor through welfare and some rent seeking corporations through "corporate welfare". It should be clear that reducing tax rates is not giving anybody any money. It is reducing the amount taken from them, partly in an attempt to incentivize more work.

When one group of people work more than another, you haven't "given" them anything. Their increased production benefits everybody. If we disagree with this, to be logically consistent, we should probably start doing things like blaming urban poverty on Asian Americans since they are more productive than other Americans. Clearly that would be ridiculous. Everybody benefits from increased production, and the people who benefit the most are those who do it personally. Redistribution just reduces production and makes everybody less prosperous.

If you look at the Gini coefficients of countries, you'll find that the countries with the lowest value (least income inequality) are the western prosperous countries, and the highest values are found in the third world. Looking at the trends you'll see the Gini coefficients lowering linearly with economic growth. If we measure overall well-being with the size of the economy without looking at the distribution, we're getting a distorted view.
This tells us that something is a certain way, not why that something is that way. These correlations don't tell us that redistributing funds could change things for the better. Marxism and the Soviet Union was dependent on the view that redistribution would change this sort of thing for the better. The USSR hit the ideology as hard as you could, and the entire thing collapsed into destitution because of it. To contrast this, supply-side reforms have overwhelming evidence showing they work in both industrial and pre-industrial nations. One need to look no further than China. But I will admit it's very hard to find this stuff for non-economists since the media never talks about them. I see it from time to time on economists' blogs, but I don't save them and they get buried.