|Should the rich get more money?|
Well, yes. But, there is one situation when the rich getting richer and the poor getting poorer is actually good.
In an ideal world, with sound money and with no central banking, the middle class would be in charge. However, that is not the world we live in.
We live in a world that runs on so-called 'Capitalism'.
Firstly, we don't live in a 'Free Market World', we live in a centrally planned world. You cannot have a free market economy with a central bank in the country. Period. And all countries have central banks.
So, in this 'Planned Economy World', governments have figured out how to a) Please the lobbyists b) Please their constituency c) Keep up the facade of freedom.
By central banking, governments can keep spending money they don't have whilst keeping up the facade of freedom & free markets.
Under the pretence of boosting the economy, governments allow the central banks to print money and then use that money to buy government bonds and financial assets. They literally create wealth out of thin air and buy stuff with it.
Now, we have all heard of inflation. Inflation happens when money is printed. There is no other way to consistently get inflation year after year other than money printing. Inflation is a tax on your wealth, the amount of all the stuff you could buy with your wallet reduces after every night.
So, you'd think that governments should not create inflation by printing money as it would hurt poor people the most. As they have to suffer an invisible tax on their wealth.
True, but what if there was a way to boost the economy by printing money without having inflation descend onto society indiscriminately.
Politicians can avoid the matter of the effects of money printing and debt very effectively and for many many years even.
The effects of inflation and the rising prices of general items can be controlled if you contain inflation to only financial assets. These would be, government bonds, real estate, financial products, stock buybacks etc.
In other words, governments believe that you can boost the economy by inflating the prices of certain assets and not everything else.
That is partly true.
In order to boost the economy by printing money, the government allows the central banks to print money and buy financial assets, this is also called Quantitative Easing, a nice sounding word but it just means creating inflation.
However, all that inflation is contained in financial assets and does not flow down to the people, as in the working class. So, the general price levels stay roughly the same, poor people's wealth stays the same, at least in theory.
Only the rich can afford to have financial assets, so they get richer and richer.
And it does work, the economy does start looking better, but only temporarily.
You see, "Inflation always catches up"
And when it does, the poor suffer.
But, they would suffer even more and much faster if you allow the money to fall like a thundershower down on the economy.
So any major programs that give money directly to the people will only make them poorer, in the long run, Public Works and Infrastructure Development is great, but governments would need to keep doing it forever. It does not provide the permanent solutions that are needed. Not to mention the prices of things keep skyrocketing as people have more money to spend.
The only real solution is to allow the economy to restructure. We need to take a little bit of pain in the short term so that we can have long-term growth.
To be clear, money printing is bad, and even in many ways evil. In the long run, it is a transfer of wealth from the poor to the rich. It should never be done. Period.
But if you are going to do it, only in this situation, let the rich get richer, else the poor will be poorer.