Inequality: Why are the rich getting richer?

Our money system guarantees that inequality will get worse -- Here is the evidence:

1. The current money system distributes money from the bottom 90% to the top 10%

Because 97% of the money in the UK is created by banks, someone must pay interest on nearly every pound in the circulation. This interest redistributes money from the bottom 90% of the population to the very top 10%. The bottom 90% of the UK pays more interest to banks that they ever receive from them, which results in a redistribution of income from the bottom 90% of the population to the top 10%. Collectively we pay £165m every day in interest on personal loans alone (not including mortgages), and a total of £213bn a year in interest on all our debts.

2. It transfers money from the real economy to the banks

Businesses are also in a similar situation. The 'real' (non-financial), productive economy needs money to function, but because all money is created as debt, that sector also has to pay interest to the banks in order to function. This means that the real-economy businesses - shops, offices, factories etc -- end up subsidising the banking sector.

3. It transfers money from the rest of the UK to the City of London

Banks pay their staff out of their profits, which in large part comes from the interest they charge on loans. Because most of the high earning bank staff work in the City of London, this results in a geographic transfer of wealth from the UK to those working in the City of London.

4. The instability that the system causes means that temporary and low-paid jobs are insecure

When banks cause a financial crisis it leads to unemployment. It tends to be low-paid and temporary contract workers who are the first to get made redundant first, so that instability in the economy has a bigger effect on those on low incomes with insecure jobs.

5. High house prices increase inequality

When house prices are pushed up by banks creating money, those on low incomes suffer the most. People on low incomes often can't get a mortgage big enough to buy a house, so they don't benefit from the rise in house prices. Meanwhile, those who can get access to mortgages can buy multiple houses for buy-to-let and benefit from artificial inflation in house prices. Younger people also lose out, as the cost of buying their first house swallows an ever larger amount of their income, while older and retired people who own houses benefit. This all increases inequality across different income groups and between the young and old.

Help us change the money system!

Our debt-based money system is fuelling inequality. By taking the power to create money away from banks, we can reduce inequality and make the economy more stable.
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[michaelhudson]

If someone wants academic support for the ideas presented above, please see the working paper, "The Chicago Plan Revisited, " by Michael Kumhof and Jaromir Benes, International Monetary Fund, August 2012, working paper, wp/2012/202. The working paper examines the history of monetary policy and finds that state created money is a much more successful method of creating money than our current system. In fact, the proposed system would solve our debt crisis, and keep debt manageable.

[StewFairweather]

You're asking for evidence? You could start with Positive Monies other videos on their channel or visit positivemoney[dot]org. All the information is available if you genuinely seek it. It's a little lazy to demand evidence from YT commenters.

[Saifthebest]

"Why are the rich getting richer?"

Because the government does them special favours. Why? Bribery and threats.

[Madrrrrrrrrrrr]

Money is the source of every nation in this world not killing each other. They are depended on each other. It's THE positive effect of money in this world! 

[Jamesmith]

It may have something to do with how banks are owned by shareholders. One could also research the links between those with money and power and how they are closely tied with the community structure of the banks. I would be surprised is any of those 10% didn't have any connections with banks

[Quis_ut_Deus]

Not only the compound interests of Banks sucks up money, but globalisation of the economy and huge fusions of corporations have to do with this gap.

Furthermore we have to consider the effect of how the salary are maintained in long term under the inflation so that purchasing power diminishes.

The root of the problem is more about cupidity than the enrichment. The root of the problem is the heart of men.

[kingofthepaupers]

Jct: About time the Positive Money LETS non-supporters get something perfectly. A+ on this part of the banking systems engineering.

[Polarcupcheck]

Some rich guy once told me If I can't work 100 hours a day, I'll never get rich. I have no idea how he works 100 hours. People say there is only 24 hours in a day, but they aren't rich, so they are just jealous.

[PositiveMoneyUK]

Could These 3 Simple Changes to Banking Fix the Economy?

[kingofthepaupers]

Jct: The Professor of Banking Systems Engineering grades Positive Money A+ on how money for debt works and how the interest we can't pay is the problem. B for a half-vast solution that provides interest-free credit to the state but not to its citizens. 

[julianmcculloch]

and how do you pay the interest? give out more money, to pay the existing interest off, wow job done, all paid, but what about the interest on the new money? oh no!.

another way to pay for the old money, give the banker your assets, and your left with nothing. How do you get your assets again? barter or change the money system

if you own the bank, you get all the interest(profit)

[carolinebarwick]

Propaganda which encourages the 99% to believe the economy is bouncing back breeds complacency among the majority. I have been blogging ( via my posts in Life after Debt) to raise awareness about the social injustice, inequalities and absence of fair play for the victims of the banking crisis. My own case against HBOS serves to illustrate just how un-level the playing really field is and my five year battle to be heard proves that equality remains a lucrative key to the banksters success

[jonesc]

nothing wrong with interest, big problem with fractional reserve banking. Interest simply indicates how much money is worth today, instead of tomorrow.

Total production is very hard to work out, ie what is the "value" of 100, 000 Justin Bieber cds? But inflation is at least something you can see happening. (though I agree it can be skewed eg by fuel prices, as everything is delivered somewhere)

Under Positive Money's scheme there would still be interest. Which is a good thing for savers.

[WllH]

Also i hope you understand that the moment you deposit your money into the banks accounts its not your money anymore :) because when you sign up for your account you give the bank authorization to do what they want with your cash hence why you get interest when you deposit money your money is loaned out staright away + new money is created hence if everyone pulls out their money the banks go bust thats why taking peoples savings to bail out banks is just pathetic and wont last just like in europ

[UniversalPotentate]

I agree with that. I'm confident the people at Positive Money agree with that. However, if you want to get across the message of "Don't lump US in with THEM." then state that and ONLY that.
The problem is usury (ill-gotten gains), not the equitable exchange of service for money. Customers aren't mad at Bill Gates, Steve Jobs or Sam Walton. We should be infuriated with Ben Bernanke (US Fed), Todd Maclin (Chase), Douglas Flint (HSBC), Michael O'Neill (Citi), et al.
Is PM's monetary solution wrong?

[Prodige]

Yes, the system is flawed and abused by a VERY small percentage of the population, namely banks. It kills me though to see entrepreneurs who create jobs, help our communities, and want the best for the economy and the US to be grouped into this same evil clan simply based on our income alone. Just because someone makes 12 million dollars a year doesn't mean they are an evil banker, often times it's because they have provided extreme value to consumers and received money in exchange

[Prodige]

Secondly, this video and many other videos seem to assume that anyone who is in the 1% owns a freaking bank, which (sorry to burst your bubble is just not reality), business owners and entrepreneurs who earn millions a year are in the 1% as well and we do NOT give loans out and live of interest, in fact, a vast majority of the 1% did not make their money from loaning the "90%" some money out but rather building companies and creating jobs

[Prodige]

First off, at 1:55 the idiot say's that the bottom 90% of people pay interest that lines the pockets of the top 10%, being in the top 10% is earning (don't quote me) probably less than $100, 000/yr which would mean that quite a few individuals watching this video would qualify in that category. Now, if you qualify, ask yourself where is your check every month from the bottom 90%. Oh that's right, it doesn't exist. Yep, I get no check each month for a loan a bank gave out, shoot.

[atlant]

One minor critique of an otherwise excellent video: The bankers aren't the top 10%, they're the top fraction of the 1%. The other 9.8% if the top 10% are just well-paid specialists like engineers and doctors, or high managers and executives.

Still, it's the top 0.1-0.2% that are the multibillionaires and own the vast majority of the economy, so this is otherwise correct.

[heithm]

The farm dollar will be exactly what this video says but better. When a farm dollar is created through work of a small farm it will be destroyed after it is uses for buying food. It will be part money or currency, and part futures contract. It will be like community farming, but with a currency competent.