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Governmental Policies Lead to Record Number of Millionaires

Posted by Steve Markowitz on March 18, 2014

MillionairesAccording to CNN Money, the number of millionaires in the United States is soaring.  Prior to the 2008 economic meltdown there were 9.2 million household millionaires.  After the downturn, that number dropped to 6.7 million in 2008.  It now exceeds the 2007 bubble economy with 9.6 millionaire households existing in the United States in 2013.

As a capitalist this Blog responds positively to growing wealth when it is a result of productive capitalism.  However, the increasing numbers of American millionaires since 2008 has been the result of governmental and central bank interventions that have created bubbles to the benefit of wealthier Americans at the expense of the good of the overall economy.

The 2008 economic meltdown was itself cause by interventions in the economy.  The major culprit was the Federal Reserve and its low interest rates policy used any time there was a hiccup in the economy.  This thwarted the economy’s ability to rebalance supply and demand and led to bubbles, most significantly in the housing and equities markets.  That led to the mother of all hick-ups with the economic calamity of 2008.

The interventionists did not learn from their failures.  After the 2008 meltdown they once again flooded markets would liquidity and used historically low interest rates to artificially stimulate economic growth.  While those efforts may have kept the downturn from becoming temporarily more significant, they have had consequences that include the increasing wealth disparity in the United States.  Those interventions created artificially high equities’ valuations that disproportionately benefited wealthier individuals.

Have the interventionists such as President Obama respond to the disparity problems they helped create?  They ferment class warfare by attacking wealthier Americans to deflect blame from their own failed policies.  Then they suggest still further interventions to correct the disparity, i.e. higher taxes.  The consequences of further interventions will lead to more economic distortions that the interventionists will then come save us from.

It is understandable that political elitists promote governmental interventions.  That helps guarantee their employment and power.  It is harder to understand why the People continue to allow these folks to exercise such power and authority given their record of failure.

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