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Extra Credit PAYAM FAKERI I will like to prove my idea and agree with Piketty’s idea that the riches get richer and poor get poorer, particularly in a bad recession. My focus of my statement will be based on United States market; As we all know US economy is based of capitalism system; That means there are lots of money available thought wealthy major capital holders that they are not even more than 10% of the population of the US. Picketty's premise is that capitalism has a natural drift toward income inequality because assets like stock and real estate tend to grow in value faster than the economy as a whole. Piketty’s inequality theory is based on a formula he calls “R > G,” meaning that the return on capital wealth exceeds the…show more content…
In a recent economy crises; they are many companies ( investors ) that they are rich and have capital; they try to offer a loan at the very fast way if someone needs CASH; by having then sign a contract with the interest rate of 112% against their vehicle ( title loan). So investors get richer and poor people that ding to have $2000 cash get poorer. It can be even related to taxes – Richer get richer, pay less but regular person pays more, because rich can hire a CPA or go to professional accounting firm at the higher rate per hour or case but and middle class person just go to ordinary places to file his tax and probably ending up to pay more taxes. In general; the riches in this case (Person holding capital) has always have more investment opportunity, more chance to get the high line of credit, loans at the very reasonable rates from other investors, banks or lenders and the reason is they are strong, low debt ratio and more supportive financial statements while a poor person won’t have any of those
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