Relevant Range.  Systems only work within what’s called a relevant range.  Currently, our economic system is not correctly functioning as parts of it now fall outside of a working Relevant Range.

Defining the range. There are basically only two factors in a relevant range.  Top end and Bottom end of the range.

The bottom end of our economy is constantly being dealt with.  Mostly called social programs. It’s how to keep the poor from having nothing.  Bottom of the range is keeping people at the minimum end surviving financially. If that sets the bottom end, where should the top be?

Top end of a functional economic relevant range cannot be infinity. There must be an upper end.  How to set it?  We  need to come up with this.  Where can an upper limit be set that there are real opportunities for hard work and entrepreneurialism to provide incentives,  yet prevent greed and gluttony from spoiling the range.

I think there are two current proposals that work towards this end.  Elizabeth Warren’s “Wealth Tax” on assets over $50 Million and Alexandria Ocasio-Cortez’s plan to increase the top marginal tax rate to 70%.

Where is the limit the top end of the relevant range should be set at?  At this point we don’t need to set it, but just acknowledge that such a limit needs to be attained.

Example Story - The Balloon.  This is a simple example story about the concept of  “Relevant Range”.  In this story there is a Very Strong self- inflating Balloon (our overall Economy).  Belief is, this balloon is this wondrous best of the world system.  Truth is, there are issues with the balloon.

Right now we have to keep blowing up the balloon, but it should be self-expanding, The issue is a set of tiny pin prick holes (the ultra-rich) allowing the self-expanding gas to escape the balloon (the upper limit of the relevant range).

As this gas escapes the balloon shrinks to compensate.  This shrinking causes pressure on the system.  This pressure manifests itself in many ways. Since there is no way out of the balloon (except the tiny pinholes),  all sorts of actions are required to prevent a collapse of the balloon. 

These actions do include entitlement programs growing at rates we cannot continue to afford.  Proof of this is what we have to continue to blow the balloon up with, our national debt. Do we want to continue to feed this debt, or come up with a real solution?

The solution, slow down and eventually plug the leaks. This entails setting a true upper limit to the relevant range.  Elizabeth Warren’s “Wealth Tax” on assets over $50 Million and Alexandria Ocasio-Cortez’s plan to increase the top marginal tax rate to 70% are starting points to slowing the leaks. Eventually we need to seal the Holes.

The balloon will eventually implode if we don’t fix the issue.  Not just address symptom after symptom.