The Law Of Attraction - 2130 Words

The law of attraction says that focusing on positive or negative thoughts will bring either those positive or negative thoughts into positive or negative experiences. Most people wouldn’t believe that such a theory could possibly work in their lives, but I personally believe that this theory is one of the main reasons that America has such a large gap in income. In the USA today, the gap between the rich and the poor has steadily increased to the point where there the middle class has all but disappeared. People are either getting richer or they are getting poorer. To a lot of people this may seem like a horrible thing and initially I also thought such income inequality was outrageous. However, as I researched the issue and discussed the†¦show more content†¦Over time, income inequality promotes growth in many areas and anyone pursuing an education receives an income reward for their efforts. Hongyi Li, an Ohio State University graduate with a PhD in Managerial Economics and Heng-fu Zou, a Harvard University graduate with A PhD in Economics, give a precise mathematical explanation of how income inequality promotes economic growth. They argue that: â€Å"by dividing government spending into production services and consumption services—the former enter the production function while the latter enter the utility function†¦.With this extension it is found that, within a typical political-economy mechanism on income taxation, more equal income distribution can lead to higher income taxation and lower economic growth.† (Li and Zou, 325) Li and Zou explain that by dividing government spending into equal amounts of production services and consumption services, it is found that this equilibrium of income will overall increase the general population’s taxes, and lower the economy s growth rate. Becker and Murphy illustrate Li and Zou’s theory by showing that throughout history, when income inequality increased, the rate of technological advancement also increased, and incomes for the average household also increased. Becker and Murphy focus on the importance of education when they discuss income inequality, which supports my hypothesis, but the main point is that