Why can't a money limiting law be passed?

Question

Isn't it the Bill Gates and Oprah Winfreys of America buying $50 bottles of water that make some people so poor? I don't fully understand the way the economic system works. But doesn't this throw the rest of people out of balance for their to be all these business tycoons out there?

Aren't we limited to a certain amount of resources that have unequal opportunity to take advantage of, because of unequal economic plans.

Answer 1

in a manner of speaking yes, as in some people will always make more than others. however, your plan reveals your lack of understanding of economics. limiting the personal wealth of some people is an incredibly inefficient, silly, inane plan that will almost certainly not work. it's not like there's one big pot of money, and some people just manage to grab more. a lot of poor people don't have the kinds of skills and education that well-paid people have, therefore they can't get a high salary. and as for bill gates and oprah, the vast majority of his net worth is in stock, so if he tried to sell it all, the price would collapse. and she has built an entertainment empire from nothing, she has needed help and people to work for her, but not just anyone can host a talk show.

Answer 2

Interestingly enough, for most businesses, the higher-income customers, although fewer in number, make up the majority of sales. Think about the retail industry; for most businesses, the 30% of customers that are richest make up something like 70% of the sales and probably around 75% of the profits (since they don't just buy what's on sale). To cut the incomes of the high-income people would be hurting the domestic businesses that supply items to them, and more people would be out of jobs as businesses shut down. Government interference in the market in this scenario would, as usual, hurt the market and the economy.

In regards to your second point, yes, resources are limited. However, different combinations of income and spending habits dictates the laws of supply and demand; everyone will never be simultaneously satisfied with a specific good, and consumer preferences indicate essentially how much a particular consumer wants a good, and therefore what price he/she will pay for it. The opportunity cost of $50 probably isn't that much for people like Bill Gates and Oprah, and so if water ever actually gets that expensive, they will still buy it, while other people may decide to keep their $50 for something else. This is how demand works, and it's about as fair as a system can be. How those people with high incomes get their money is another discussion...

Answer 3

Not only would you not actually want this, it would hurt you.

It turns out that the annual average change in personal income is equal to the rate of change of the rate of change of profit.

In other words, if a company makes 10 percent profit every year, you will never see a pay raise.

If a company's profit grows, its employees see not only the inflation raise, but the growth in profit raise. That is the reason Americans are thirty times richer than Bangeladeshi workers and two hundred times richer than their colonial counterparts.

Place a ceiling and you will see the poor hurt the worst. Bill Gates will still be rich, but some little kids won't eat. Everything is interconnected, don't mess with it because you are envious.

Answer 4

It is insane to pay anything for bottled watter. I don't care how much money you have. It's a stupid economic decision. People are poor because they don't have the skills or the opportunity to build the skills. Oprah isn't the reason the poor are poor. I don't think income equality should be the goal of anyone in the economy. It's a disincentive to create wealth. One of the 10 principles of economics is the people respond to incentive.

Answer 5

I understand your point..............but, when you start limiting how much a person can earn or spend..........you are asking for trouble. What I see in my County, is that my town used to be very inexpensive to buy a home. Then, people from the Southern part of the state, who have very expensive homes, started moving to our County, because they could buy one or two of our homes for cash with the money they had from selling their homes down South of the state AND have enough left over to retire on! So, almost overnight, our county became a great place for the people in the south of our state to move to.......causing our homes to go WAY up in price. Now, young people cannot afford to buy homes here anymore. So, the people from Southern CA moved to Northern (Humboldt County) CA, and people in Humboldt Co, are moving to Idaho to buy homes. Soon Idaho will be raising their land prices, and so it goes.
Anytime we start talking about evening out the money to each of us, Communism just leaps out at us. It is a great concept, but, it doesn't happen the way the concept does. Those with power will always have the money, while those with little power will NOT have a lot of money.
It is good to work and to earn money to make a living, to rear a family, to enjoy life. The sad part is that, these days, it takes at least 2 people working (in a home) to, usually, make the housepayment and to pay bills. That is very sad, as we realize there will always be those who don't worry about income because they don't need to worry about it. Either they earned their money, or it was inherited. Either way, it will always make it hard on the most of us.

Answer 6

There is a major theoretical flaw here. Trade is not a zero-sum game -- it is a win-win situation: if a trade were not beneficial to both traders, it would not happen. In fact, trade is one of the two creators of wealth, and the success of the Oprah Winfreys and the Bill Gates of this world has arisen because they have enriched all of us.

Answer 7

No, there should not. Rich people buying outrageously priced water does not effect you at all, really. In fact, it creates jobs. Somebody has to make those $50 bottles of water. If rich people stopped buying stuff, manufacturers would go out of business and people would lose jobs.

Answer 8

you kind of sound like a communist,.....if bill gates can afford a 50 dollar bottle of water, then why should he not be allowed to buy it?,.....it is his money, he should be able to spend it any way he sees fit,.....if It was your money you would want the same opportunity,.....

Answer 9

laissez faire economics. Plus all the lawmakers are rich...

Answer 10

if we passed a money-limiting law, we would have a command economy, wich is what communists have [in most cases]