I think we as a nation should consider this an issue of national security. This type of financial instability in such a large percentage of the population could lead to making short-sighted or bad decisions in tough times, increased violence, increased rates of incarceration (both of those increasing the cost of government for all), among many other things. The reasons for it are multi-faceted I'm sure. I hope voters and politicians recognize statistics like this as an opportunity for reflection and change.
We should but you know personal responsibility and all that jazz. The wealthy only care when the pitchforks come out. The biggest achievement of the wealthy has been to convince the middle class to eat itself.
But personal responsibility is actually an important concept. It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Any strategy that is employed to remedy this has to contend with the fact that the individuals who need to have this situation remedied for themselves are the same ones who have gotten themselves into this situation.
I will say this again. As a mobile adult, in the United States, to not have $400 on reserve for an emergency is simply not possible with proper decision-making. Individuals at that level of poverty have national and state level food stamps, welfare, disability, affordable housing, rent control, minimum-wage laws, child-support, often social security, medicare/medicaid. It's not as though the country has a non-existent social safety net. You simply can't propose that the solution can exist independently of the personal decisions made by the individuals in this position.
What you mean is that a college educated young white male in his 20s/30s will have $400 in spare change around the house. Because we can't be bothered to keep track of $50 notes we keep around for pizza.
What exactly about being black and in a ghetto prevents you from gathering $400? I have worked multiple minimum wage jobs before without even being on any social welfare. If you are on social welfare, receiving food stamps, affordable housing, etc, you absolutely have the capability to provide yourself with an emergency buffer, even on minimum wage.
Not sure why you're getting down voted. An otherwise identical resume with the first name changed from Tyrone to Brad receives 3x callbacks for interviews.
People who have had a golden spoon in their mouth since birth and can't imagine a life where they didn't have their hands held to success the whole time.
They think that because they are not billionaires they aren't privileged and anyone can pull themselves up by their bootstraps, just like their great-great-grand pappy who came from Ireland and was treated pretty badly by the English in 1864.
It is very difficult to work multiple part time, minimum wage jobs these days because of the scheduling unreliability and availability requirements of the jobs. If you aren't available for ad-hoc hours, then your hours get dropped...
this is probablly a good pivot point for you to look at sociology. Because personal responsibility just doesn't magically happen. If you are not looking at what leads people into what you think is poor decision making and a lack of personal responsibility, you become part of the problem. The reality is, the social structures play a big part in this, and more problematically, you can't change it quickly.
Bahaha, yes, if you make perfect decisions you will have over $400. The whole point is people don’t make perfect decisions. Should they become homeless when they get hurt as a result? Does that threat help them make better decisions? Does it help society to let a small problem escalate into a larger one like that? I’d answer a resounding no on all fronts.
Repetition doesn't actually make your claim any better supported, so maybe instead of repeating it, provide better support or, failing that, just stop instead of reiterating.
The reason for some people not having the money around is undoubtedly poor decision making, but for a great many others they simply have no gainful employment, no prospects of obtaining gainful employment and are often trapped in debt spirals due to past financial desperation.
I'm real happy for you that you're so far removed from their situation that none of this occured to you.
Being trapped in a debt spiral due to past financial desperation is just a way of iterating forward in the loop of bad decision making. What I am saying is that to enter financial desperation in the United States is not actually possible if you utilize the available social safety net and make proper decisions.
The number of allowed bad decisions drops dramatically as you slide down the wealth scale. Saying you need to be correct 99.999% of the time is simply not a viable strategy. Especially when people are actively trying to get you to make bad decisions like enrolling in a for profit collage.
The vast US homeless population suggests we don't really have a safety net, so much as a safety rope you need to hold on tight and pray. Consider, if all the homeless people showed up in the same place that would instantly be in the top 10 US cities.
And once you've enrolled in that for-profit college, surprise! You can choose to keep your student status to keep your loans in deferment but now you're not eligible for food stamps while an enrolled student unless you work a minimum of 20 hours a week/earn ~$680 a month.
If you have Netflix, watch the documentary "Dirty Money". Then come back and tell us you wouldn't have been in the same situation had some event in your past not gone your favor.
Untrue. Get majorly sick or in a major accident and lose your insurance because your job finds a reason to restructure your department. Trust me, you will enter financial desperation very quickly while you wait for the social safety net to catch up, and by that time you're thousands of dollars in debt, likely already out of your house, and totally screwed.
All of you couldn't do a better job to make me very very glad of the taxes and other money I pay to the state and public health insurance here in Germany. As long as we can protect this system this will never happen to me or my neighbours.
It looks like you believe stability is simply a matter of 100% good decision making and that lower middle class is just one bus fare and two transfer passes away. You're painting a picture with a brush as wide as your canvas and with only one color on your palette.
I think we are mostly products of our surroundings so, yes, good decisions can help a lot. It just seems placing that level of "blame" is counter-productive and just does not represent reality on the ground. Trapped is trapped, you used the word yourself. I'd wager you have little idea the sorts of life traps that are laid out there. Having debt is pretty easy even with a better than average stability matrix. A single hit with bad luck is simply made worse as the "socially permitted" trolls eat their prey where no "socially permitted" social safety net exists that could possibly save them.
What is that? Trickle-down blame? You got yours? I simply don't understand the economics of "it's your own damn fault" with the force of a gavel.
>Being trapped in a debt spiral due to past financial desperation is just a way of iterating forward in the loop of bad decision making.
Imagine you went to a crappy school where you spent most of your days trying to avoid gangs rather than learning anything. You did everything people told you to do and you applied to some for-profit bullshit college that accepted you. You signed some paperwork that you literally didn't understand the details of (because of said shitty school and parents who have never dealt with this situation before and for-profit colleges that explicitly set out to target people exactly like you). Now you have $50,000 in debt that you literally can't even declare bankruptcy on and no marketable skills. What do you now do?
To blame it all on personal responsibility degenerates into a No True Scotsman argument very quickly. It's the kind of overly simplistic thinking that makes thirteen year old kids think Ayn Rand had it all figured out and never think further than than her heroic fantasy novels.
(I admit, I actually really like Ayn Rand's philosophy if it's seen as an ideal, rather than something that is practically p[possible. Marx and Engels were also idealists and in their perfect world everyone would be happy too.)
Humans are not born with an innate understanding of optimal decision making and the power of compound interest. Our environment shapes us to a massive degree and you're discounting this.
The problem with being poor is that it is extremely taxing on both your time, your ability to make rational decisions, and even IQ. Being poor is, in effect, a disability that keeps one from being able to make it out of that situation itself. Depression and many other mental conditions are treated similarly in American society where we oftentimes point to people that are successful with depression and ignore the sheer massive weight that depression by and large keeps most of its sufferers from achieving success.
The whole individual agency and moral superiority complex of American culture is more and more sickening to me as I grow older and see how most people simply with a rational set of actions and existing opportunities better off not pursuing what used to be the better options due to structural problems. Endless optimism only works so far for attitudes that help with success until you’re truly at a rock bottom point and nobody wants to be near someone that’s failed so much out of social niceties alone.
It wasn't my point to suggest that poverty is not a difficult position to be in, my point was to suggest that there is a serious problem with shrugging off the role of personal responsibility. I am very aware of what it means to be broke, you often don't even know where to begin. I'm not saying that they're poor because their situation at birth was necessarily fair, I'm not saying that nobody should change anything to help remedy their situation. What I am saying that in this country, at this time, the reality is that if 40% of the country does not have $400 saved for an emergency, given all of the available social services, there is a serious problem of priority and character.
There are obvious exceptions for individuals suffering from unavoidable medical circumstances and the like, and I am fully willing to criticize our existing healthcare system's failings in providing suitable mitigation against such circumstances. But we're talking about 40% of the country.
> That is a situation that can only be achieved by poor decision making and a lack of personal responsibility.
Poor decision making or lack of personal responsibility are certainly sufficient to achieve such a situation... but they're not necessary. Unless you play with the definition of "poor decision making" to include things like "capable of making mistakes."
The overhead margin of basic life costs are much higher when one is poor then one is wealthy. It's an even higher overhead when trying to access our ever shrinking safety net with its perverse incentives and a high time and hassle factor. Blaming the victim for being poor is both ridiculous and counterproductive. You should wonder instead why basic personal finance skills aren't on any National education curriculum if its such a basic needed skill. (and I agree it is!)
OK, but, like, what if some people are just actually bad at making decisions? Unless you have a plan for that you’re just moralizing toward no practical end.
What makes $400 such a special number? Why not $100, Why not $500, Why not $1,000?
What makes $400 the ideal number? Probably nothing, except the fact that it makes for the best headline, since "2 out of 5" is a quotable statistic.
Formulating advice should follow a different pattern. The ideal number for emergencies is probably closer to $5,000 since it covers more realistic emergency scenarios.
$500 might cover food, gas, a few taxi rides or train tickets and basic OTC medication like asprin for possibly a week.
$5,000 might cover a lost or stolen laptop, plane tickets, hotel stays, car repairs, emergency rooms and ambulances and out-of-pocket prescriptions, funerals, rent or convert to a month's worth of basic needs (food, gas, short-haul travel).
More is obviously always better, but emergency response is about covering the cost of capacity to react, plus supplies needed to take action, plus duration of endurance. $500 wouldn't keep you off the street for more than a weekend, but $5,000 could last a month or more.
The funny thing about what you're saying is that there's always somebody richer saying the same thing about you, just with bigger sums of money. "He wouldn't have a mortgage if he just made better financial decisions!" ;-)
Honestly, though, you're just stating the obvious: people screw up and behave irrationally. That's common knowledge.
The goal is to minimize the impact of poor decisions and give people a way to get back on track. "F* 'em, I've got mine" doesn't help anybody.
>It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult.
The problem occurs when there are MANY emergencies. You're about to get evicted, your car is broken down (so you're about to lose your job) and your kid is sick and you need a doctor but can't take the time off to get one.
>I will say this again. As a mobile adult, in the United States, to not have $400 on reserve for an emergency is simply not possible with proper decision-making.
Okay. The day your turn eighteen, your parents (who taught you very little and gave you nothing) kick you out on the street. You have no money (because they flat out stole it the day before you became an adult). Where does this magic $400 come from?
$400 is a LOT of money. The federal minimum wage is $7.25 before taxes. That's a week and a half of work without accounting for gas money to get you to the job or food to eat when you get there. After the basics (taxes, cheapest-possible rent, basic food, some kind of heating and lighting and a few other things) you're probably at the point where you have $10 or $20 left over.
Let's say you get sick, or disabled, or laid off. You are so fucked.
> Individuals at that level of poverty have national and state level food stamps, welfare, disability, affordable housing, rent control, minimum-wage laws, child-support, often social security, medicare/medicaid.
Have you any idea how long it takes to get disability? Years. And years. And it's not certain at all. What do you do in the meantime?
Even the other programs - they often fail the very people they are designed to help the most.
Child support? Again, have you any idea how many years it takes to get child support from someone who bails from their job every time the paperwork makes its way into the syste, and who never files a tax return?
You simply have no understanding of what it’s like to be poor in this country. In a lot of ways it’s more expensive to be poor than to be middle class— you get hit with higher interest rates, more fees, more things like inspection tickets for your car that you can barely keep on the road. A single emergency room visit is enough to bankrupt some people.
I’m making well into six figures now, but in my early 20s, I was living pay check to pay check and barely had enough to eat some weeks. If I managed to scrape up an extra $400, I had a hundred things to spend it on that weren’t a rainy day fund.
I find your absolutist view remarkably blinkered, indeed unrealistic in the fundamental sense of the word.
I wonder if you suddenly incurred uninsured medical expenses of oh, let's say, 20X your net worth or annual income, whether you might see things differently.
A family of four on a $50K annual income would find a sudden $1000K obligation utterly devastating.
That's life for (IMHO) too many of us. On average, it has far more to do with luck than your proffered causal moral failure. I think we can do better.
The problem with personal responsibility, which I am very much in favour of and wish we promoted a bit more, is that the deck is so stacked against people who don't have assets that I'm not sure average person can keep up.
I keep saying it; the amount of money in the system has increased +50% since 2008 [1], and worker compensation has gone up +25% (the BLS publishes a lot of series, I use [2]; hope it is right). So someone is getting a lot of money and it isn't obvious to what end - it isn't helping the workers or the poor, and nobody can make up that sort of difference by working harder. Workers are reaping a smaller percentage of society's bounty.
It’s due to a long and storied history of elites manipulating the masses through intimidation and fear
It went from overt violence to less obvious propaganda programs tuning our feelings
I wish the “smart” crowd would look into the history of government-corporate propaganda research
I’m not talking “deep state”. It’s plainly recorded in government record how they financed propaganda research and gifted it to media for advertising and corporate use
Look at the joke history classes taught in public school
Look at the efforts to hide info about the environment by this admin
There is a concerted effort in our faces to deceive and misdirect is
Economics, jobs, and government scandals are distractions in support of these efforts
Read up on Greenspan’s comments in the 90s about growing worker insecurity being a boon to beneficiaries of supply side economics
Watch Varoufakis explain how during the Greek debt crisis German tax payers took out loans from German banks to have it to Greece who gave it right back to German banks
This is a generations long boondoggle unrelated to one policy decision 10 yrs ago
It’s a round n round we go with numbers because even the educated masses are too on the periphery to see or outright prevented from being in the room
No, you are talking deep state (unelected “eternal beaurocracy”), they’ve just associated that term with crazies and racists like everything else that threatens them, so you’re scared to use it.
QE, Fractional reserve banking is basically printing money on every loan, us gov't budget deficit prints money. In terms of inflation, it does seem the supply needed to keep expanding to prevent a liquidity collapse of the economy - though my suspicion is it needed to keep expanding because the finanicialized sections of the economy basically keep sucking it up, somehow locking it up from liquidity in the economy.
Some people are getting huge amounts of money just because they can, and today's society, with the growing relevance of intellectual property, is geared more and more towards income inequality.
It used to be that one could somewhat easily get $1M by just selling 1 million people some $1 items, however that required making 1M items in the first place. Nowadays one can get the same $1M by making just a single unit of IP, and selling 1M copies at $1 each. Sure there is no guaranteed way of knowing whether some IP will sell 1M copies, but that only turns it into a sort of lottery which exacerbates the inequality even more.
Given that money -and particularly M2- is credit, which is kind of an "intellectual property" on itself, it isn't really surprising that a greater amount of IP in circulation would also mean a greater amount of credit/money.
Workers who exchange their effort for a fixed amount of income, are just out of all this IP lottery and its income multiplying potential.
Why do I have the feeling that most posters on HN who consider themselves the "middle class", actually fall well above of the middle quintile of household income and most are in the 5th quintile.
The true Middle Class probably don't make any distinction between anyone who is in the top 20% (household income over $116,000) or especially the top 10% ($161,000).
> Why do I have the feeling that most posters on HN who consider themselves the "middle class", actually fall well above of the middle quintile of household income and most are in the 5th quintile.
Because middle class in a capitalist society is an economic relationship between the captialist and working class (characterized by mixed dependence on capital and labor, most archetypically the independent operator who supports themselves by applying their own labor to their own capital rather than primarily by renting labor to apply to capital or selling labor to capitalists), and its members are usually well above middle income (though, on average, far below that of the capitalist class.)
The middle income quintile is largely members of the proletariat, not the petit bourgeoisie.
This is a concept I haven't yet seen a good definition for though I know it is rigorously defined. What is the difference between the bourgeoisie and the petit bourgeoisie?
In discussion of capitalist economies, a rough definition (loosely following Marx) of the major classes is:
haut bourgeoisie (capitalists): those who own capital and rent labor to apply to it.
petit bourgeoisie (middle class): those who live by a combination of labor and capital, particularly those who apply their own labor (perhaps alongside a small amount of rented labor) to their own capital.
proletariat (working class): those who derive income mainly by selling labor to members of either of the preceding classes.
Do I understand correctly that an Uber driver with a 30k capital investment in a car is part of the petite bourgeoise, and a surgeon working for a hospital who has put 400k toward education is part of the proletariat? Or do you count education as capital?
I agree. When a couple of developers can start a software company with nothing but a credit card and an AWS account the concept of "capital" has changed a lot.
The outlay for infrastructure. Previously you had to own your own hardware, get a business class line, maintain it, etc. Now you just rent servers from AWS or another provider. I like to think of it like a ski rental. They build a few extra services on top to make it even more convenient, but the critical part is the hardware.
The part where a credit card is involved. It's not directly renting equipment, it's renting money to buy the equipment in anticipation of earning new money to replace the rented money, but it's isomorphic to renting equipment, which is rather the central point to the idea of capital as marketable goods rather than entailed property (or, commonly, an appurtenance to entailed land) which distinguishes capitalism from feudalism.
Well, personally, I could set up a few cheap servers in my office and take advantage of my gigabit internet up/down while I'm bootstrapping and then get a colo. The point being that the main capital today is intellectual not physical.
Capital is something you purchase or work to build from raw material, or some combination. And an education (with or without a degree) is considered an asset. So why not?
It's just a classification system, so I wouldn't take it in isolation. If what you are trying to understand is wealth and power, you have consider more dimensions.
In Marx's time, these categories perhaps mapped more consistently to the gradation of wealth and power, but there were exceptions then too.
And the degree to which an asset is "capital" that produces wealth and income without the owner's labor is relative to it's scarcity. The 30k car is a common possession, and also it has no added economic value without the driver's direct labor. A fleet of cars driven by rented labor is capital, as are factories, valuable land, or high concentrations of wealth.
Education is a kind of capital, but the surgeon's student loan is no different in than a social worker's student loan, except in the cost and income potential.
In that sense the surgeon is a worker but their work usually produces a great deal of extra income that allows them to purchase capital assets of other kinds.
> Do I understand correctly that an Uber driver with a 30k capital investment in a car is part of the petite bourgeoise
In the simple, no debt financing case, that's the most obvious categorization, though much the same concerns that lead to questions about whether those drivers are rightly categorized as contractors might be raised as to whether they are genuinely self-employed independent business owners or rented labor being applied to Uber capital with a weird gatekeeping mechanism.
> and a surgeon working for a hospital who has put 400k toward education is part of the proletariat?
A lot to high income workers (surgeons often very much among them) are joint capital/labor earners of a kind that diverges from the independent small business owner model, because they gain substantial income, often deferred through reinvestment and often mainly in what are held largely as retirement funds, on capital to which their own labor is not applied, as well as selling labor to capital; for that reason they’d generally be seen as petit bourgeoisie, thought somewhat different from the main textbook example.
> Or do you count education as capital?
Traditionally, if it's not been made property that can be itself sold freely in capitalist economy, it's not capital in the analysis of economic class in a capitalist economy. (Looked at from within the system rather than from critics of capitalism, ask yourself: are the returns of education taxed like labor or like capital—that tells you how the capitalist system itself sees them.)
The difference is owning major assets. Be it a company, many housing investments, office spaces, factories, big farms, major amounts of stocks, financial institutions etc.
Secondary, amount of political and medial power and pressure wielded.
Finally, a condition wether your own labour is not technically required for survival.
Most petit bourgeoisie still has to work, does not wield direct (individual) political power nor has big enough assets to survive despite major downturns.
The difference from proletariat is that they can rent and hire labour. Sometimes they get to manage it too.
It's funny to me that you are using words like proletariat and bourgeois, words used to describe class differences in an agrarian basee society/economy, to describe modern america, which is as opposite as you can get from an agrarian society.
The social Dynamics of the modern anerican situation have changed so much from when Marx was alive his labels no longer accurately apply.
>The wealthy only care when the pitchforks come out.
I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. And it's a growing trend, a lot of very wealthy people are starting to plead for higher taxes. The reasoning being if wealth inequality continues to widen, eventually it won't be a case of shaking the rich to empty their pockets a bit, it will be a case of hanging the rich from lampposts.
I've met a lot of anti-capitalists who are mildly Posadist/accelerationist for this reason. For all of the ideas in this thread regarding increasing taxes on the rich and social welfare problems, I cannot help but believe that ultimately, we are overdue large scale social unrest in 1st world countries. Placating the proletariat with incentives like tax breaks and welfare programs is great in the short term, but in the end it might just be delaying the inevitable, and making it far worse. I'm firmly of the belief that a new economic system needs to be part of mainstream discussion as soon as possible, because otherwise we will eventually have riots which cause a power vacuum, and history has shown nothing good comes from that.
>The wealthy only care when the pitchforks come out.
I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more.
Why do rich people want to pay more taxes? Why not directly invest in improving the situation of the poor? This way they remain in control of how money is spent. Tax money will just be spent for more wars.
It is labour intensive to directly infest into poor. It involves setting a good programme and/or charity and managing it...
Technically government is already equipped to do everything a charity can and more eith superior information so should be more efficient at it. Although it depends on the country/state in question.
>>The wealthy only care when the pitchforks come out.
Generally by that time the wealthy are long out of the country. In fact in most revolutions where people imagine they will take from the rich, people are generally in for a shock when they realize the rich are long gone. And now the door for a peaceful taxation is also gone.
>>The biggest achievement of the wealthy has been to convince the middle class to eat itself.
The wealthy have to convince nothing. Middle class is full of people who want instant gratification, and are bad at savings and investments.
In the historical long run, few people have ever had financial security until the 20th century. People have much more financial security now than in, for example, the 19th century when there was no welfare safety net or bank deposit insurance.
Yes, it sucks to have trouble coming up with $400 for an emergency. But it's not a serious threat to the ongoing stability of society.
I'm pretty sure most people would not be okay with going back to the 19th century living conditions, to say nothing of the medieval era or before that.
I believe I've been hearing stories like this (about the lack of liquid savings for Americans) for something like 30 years now. Anyone able to dig up the historical data on this? I kind of think Milton Friedman wrote about this in one of his books.
Your post is optimistic to the point I choked on my coffee.
Our economy is predicated on consumer spending; we have a whole set of industries built on the backs of poor financial decision making and being near-broke (payday loans, credit cards, overdraft charge reordering, debt collectors, etc.) all of which pull power away from desperate people and give it to others (now your landlord/phone company/ISP/etc have legal grounds to kick you out, terminate your service, etc.) Never mind the difficulty of making use of a court system stacked against the poor...
> I hope voters and politicians recognize...
Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB[0], which was literally created to do some of the things you're interested in.
I especially like how Mulvaney is moving everything into "financial education", as if an agency with 500M budget is going to make a dent against the billions spent on marketing related to financial "services".
Our economy, habits, and mindset can change with a great deal of work and energy. People are becoming more connected than ever before, and with that we can build a new kind of social momentum.
Hey, you're right, things suck now, but it doesn't have to be like this.
The piece you're missing is that none of this is a mistake, the entire economy is designed to do this. Apathy and hoping it'll get better will if anything make it worse (not that I'm implying that's your position).
The only thing that will make it better is demanding that things change. This means mass unionization, strikes, worker owned businesses, protests, leftist politicians like Sanders and Corbyn, and a whole program of fundamental goods provided free at the point of service like healthcare, education, and child care. We have a lot of work ahead of us.
Unless you are a firm believer in the power of the Illuminati, we have as close to the opposite of a planned (and thus designed) economy as one can get in the present day.
Just because a behavior or other feature in a complex system is emergent doesn't mean the system was initially designed that way.
I am a firm believer in corporate consolidation, so yes, those smoke filled rooms do exist. However, you can consider this a systemic critique of capitalism which systemically concentrates wealth. The intention doesn't matter if the system is set up to create a particular result.
I really dislike how absurd conspiracy theories are used to discredit any discussion of networks of power and how those networks operate.
There is no vast monolithic conspiracy but there are certainly many smaller ones (lobbyists, front groups, back room deals, etc.) with incentives that align. Alignment of incentives can generate a result that looks a whole lot like the result of a big organized conspiracy.
If anything the less organized network of aligned interests is tougher to resist than an "Illuminati." It's more resilient and antifragile. Big vertically integrated power structures are slow and brittle.
> we have as close to the opposite of a planned (and thus designed) economy as one can get in the present day.
I understand why this might seem like the most obvious answer, but your analysis seems to not take into account things like revolving door politics, regulatory capture, lobbyists priority access to lawmakers, citizens united, etc... etc... etc...
I don’t think most people would suggest that there is a small table surrounded by evil cackling billionaires conspiring to pull every single worldwide string, but rather there is a relatively small number of people who have enough money to buy themselves access to writing regulation and laws which favor their own interests which will often coincidentally align with the other billionaires who can afford this kind of access.
We can’t ignore the ways in which issues like this skew influence to a small number of powerful interests.
1. A big chunk of the issues leading to today's constitution were tax and debt relief measures being instituted by the states in response to populist movements.
2. The framers were mostly very wealthy and biased toward preservation of capital.
3. Many of the measures instituted in the constitution were designed to preserve wealthy Americans' property (slaves, for instance). Populist debt relief efforts made this an especially high priority.
4. The only way to get the states to ratify the constitution was to concede many populist goals (state legislators were largely very wealthy as well, and apparently stubbornly pessimistic about the constitution despite its immediate necessity).
The book goes into great detail on the reasoning and compromises made to create the constitution. I think you will find that politics rigidly define the operation of our markets.
I get where you're coming from but you have some insufficient assumptions about the context in which this particular complex system operates.
All you're going to do with that is to piss off the upper middle class, not the people who actually got fat on the backs of the poor and who are so far ahead of the situation that you're never getting that money back. It's gone. The only equalizer left is massive inflation, which may happen for other reasons.
Don't despair comrade, the revolution is coming (we must hope). Trump and Sanders both showed that the citizenry are restless and are ready to demand (some kind of) change.
Yes and when they demand change and start "taxing the rich". You're going to find that a lot of doctors, lawyers, and people in IT who are making low six figures are going to be classified as "the rich".
On the other hand, I had to remind my libertarian friends who didn't want "government controlled healthcare" because it would increase taxes that we were already paying $12000 a year for family insurance - well it didn't all come out of our check but that was our contribution plus the company's contribution.
> "According to statistical data from the Internal Revenue Service (IRS), the top 1% had an adjusted gross income of $465,626 or higher for the 2014 tax year."
"Doctors, lawyers, and IT people making low six figures" have absolutely nothing to fear. And for the extremely few fortunate people who actually make more than half a million dollars each year, they will easily be able to afford the new taxes.
You really think the "populists" who want to "tax the rich" are going to stop
At the 1%? It's not the 1% they despise - as evidence by the election - it's "the liberal west coast elites". The other 80% with households making less than $116K year would just as likely start taxing everyone who makes more than that.
Have you noticed that most tax deductions that are designed to help the middle class phase out in the $120 - $160K?
> You really think the "populists" who want to "tax the rich" are going to stop At the 1%?
Yep.
Most people are perfectly capable of distinguishing between a middle class 2 bedroom house and someone who owns 15 vacation homes, a private jet, and private islands.
The real question is whether or not middle class people will punch down and behave as if no one can distinguish between a multi billionaire and and a normal middle class person or whether the middle class will refuse to let the billionaires put all of the stress on the middle class.
Someone living in a trailer park in thier mid 40s will see my 5 bedroom house in the burbs - something any developer with 8+ years experience can afford in my market - just as out of reach as what the millionaire can afford. They will just as willingly vote for a politician to raise my taxes as they would the billionaire.
How many people making the median household income of $60K a year will object to a politician saying tax everyone extra making a household income of $116K- the top 20% of household income?
I'm currently below that threshold. But I could choose to expand my business, maybe hire a few people and create some jobs and productive economic output. But if you are going to tax me heavily for that then no, I'll probably just stick to what I am doing and not bother.
I'm an experienced developer with a wide range of skills from web development to AWS architecture. When I looked at doing side work and thought about the rates people were willing to pay me and thought about the 49% marginal tax rate on every dollar I would have earned (Federal, state, social security, Medicare including the self employment tax - pre 2018), I thought "why bother?" My skillset isn't easily replaced.
On the other hand now that my marginal tax rate would be 33.6% (2018 Tax rates) since I'm already over the social security maximum from my primary job, it's much more attractive.
My wife would have jumped at the chance to make an extra work at $15 - $20 an hour (W2) when she was single, now at our combined tax rate, it's not even worth it. We are thinking about her working part time. The main reason she is working at all is for the health benefits that give me the opportunity to aggressively jump between contract, full time, unstable startups, and stable corporate jobs.
Taxes make a difference on how much someone is willing to work, especially if they make enough to be comfortable.
I'm not entirely convinced by your line of thinking.
Firstly is your sole motivation for your business financial? Because if so you may as well sell it, buy property and let it out, you'll earn a comfortable living and if you use a letting agent you can get them to deal with the renters and do almost zero work, bar having to file taxes once a year (and hey you can get an accountant to do that for you). Even ignoring that, is your business something that actually generates a lot of profit or are the margins small? Whatever you're doing you could invest the time into an ICO and make millions. Point I'm getting at is that very few people start a business solely for financial reasons, there's usually some level of passion involved.
Secondly, why exactly would a high tax rate stop you expanding completely? You'll still be earning money, just less than before. And as the other commenter pointed out, someone else will step in if you don't, which could threaten your business.
Point I'm getting at is that very few people start a business solely for financial reasons, there's usually some level of passion involved.
You really think that the average small business person working from themselves are doing it out of "passion" rather than that's their best alternative? Many small business owners work as much as possible to avoid having to pay someone else, hardly ever take vacations, and if given the choice, I'm sure would rather work in a nice comfortable white collar job if they could make the same amount of money.
Successful business starts with either tons of capital, experience, and power, or meaning/passion. He has a point. Middle brow MBAs and other business persons that you describe are not going to be making as much as you think for these reasons alone.
You should really read https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0... -- whether you agree with the author's politics or not her numbers are in fact right. There's no way to pay for the sort of expansive welfare state some people want solely by additional taxes on "the top 1%". There just isn't enough money there, it turns out.
Some of the savings we posit from healthcare can be used to pay for other programs.
2) Eliminate Imperialism - Save > $1T dollars by not fighting wars based on lies. The Pentagon's budget was recently raised by about the amount a version of free college education would cost.
3) Tax the (Natural Person) Rich - Take their giant chunk of change and use it to buy more stuff, like infrastructure
4) Eliminate the Rentier Class - Housing is suddenly cheap and ordinary people have much more pocket change. Who will be incentivized to build housing then? Well, your representatives of course.
5) Tax the Tax Evaders - Apple, Google, and all the rest that use tricks to hide billions overseas (or have it parked here after the tax bill).
There's lots of money to find, just look under the couch.
That's an ad-hominem attack that has nothing to do with the substance of this discussion. How about sticking to the actual numbers?
> 1) With respect to healthcare, investopedia has different numbers than the ones she cites
Let's assume the investopedia numbers are right (though it's not clear why their uncited administrative costs number is more authoritative than an OECD report on administrative costs). They claim 5% of GDP in administrative costs (25% of 20%). The drug numbers they mention as being "saveable" are $11.6 billion per year; that's .0006% of GDP. No other numbers are cited for drugs there. For defensive medicine, .03% of GDP. For the other items, no numbers are given.
So we could potentially spend about 5% of GDP less on healthcare; the other bits all look like rounding error on that. I used $19.39 trillion for the current annual US GDP, fwiw.
And just to be clear, the actual US federal government spending on healthcare is about $1 trillion a year, or maybe 5-6% of GDP, as far as I can tell. The remaining 14-15% of GDP is spent outside the federal budget already. If we're trying to put it in the federal budget that means raising taxes by 9% of GDP or so.
> Eliminate Imperialism - Save > $1T dollars by not fighting wars based on lies.
This would definitely be nice, but that doesn't seem to be what most people propose. Again, the context is people proposing "just tax the 1%".
So if we taxed away every single penny "the 1%" earn, that gives us 16% of GDP. That's assuming that there are no disincentive effects, emigration, etc, etc. Probably a bad assumption.
> Eliminate the Rentier Class
I'm not sure what your actual proposal is here, but at this point I suspect we're way outside the realm of the politically feasible or desirable. That said, can you quantify this, please?
> Tax the Tax Evaders
I would be very much behind this idea. Again, this is not the same as "just tax the 1%".
Anyway, last I checked US government spending (including all levels of government) was about 37% of GDP. If we add the very optimistic 16% we can get by taxing "the 1%" we get to 53%. That's still less than France or Finland or Denmark spend. Yes, we could nationalize healthcare if we did that, fairly easily. We couldn't do all the other things people want to do by "taxing the 1%".
I agree that if we radically restructured everything about how the government is funded and what we spend money on then there are a lot more options. But, again, what people tend to propose is "just tax the 1% and use that money for X, Y, and Z". And there's not enough money in that bucket to do all those things.
>The only thing that will make it better is demanding that things change. This means mass unionization, strikes, worker owned businesses, protests, leftist politicians like Sanders and Corbyn, and a whole program of fundamental goods provided free at the point of service like healthcare, education, and child care. We have a lot of work ahead of us.
Of course. That's no excuse to snarf your coffee instead of putting nose to the grindstone and doing the work. Agitate, educate, organize!
You are wrong. In a healthy, high functioning family, values are extremely different than what you describe. The fact that massive amounts of homes are broken, with the children only being raised by one parent, the prevalence of drug abuse, "substance" abuse such as caffeine and sugar, poor diets and habits... Is not human nature, it's a systemic illness. These two things are not the same.
Statistically and psychologically speaking, his voice reflects the paradigms and perceptions of someone who has resorted to corrupt behavior, i.e. Using other people, relying on people to bail him out of taking responsibility for his actions, lying and skewing or hiding the truth to gain a competitive edge, etc. He could also just be someone who recently forsook his values because that is the nature of corruption, it slowly spreads like a cancer.
This will become more and more apparent in the coming years and I do believe it will be at the center of all conflict and political discourse going forward.
Nihilistic minds will lead us down a path that depletes the healthy parts of the system(s) upon which such people rely too heavily. And these aforementioned parasitic systems are not good at generating wealth nor are they historically efficient at generating innovation or new, stronger systems.
There might not be a revolution, but there will be a subverting downward spiral that will end with a wake up call. One can only hope and try to convince & convert others to put on the brakes long and hard enough for us to develop immunities and fixes.
> Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB
The current administration was elected with fewer votes than the leading opponent, so it certainly reflects a subset of voters and the politicians comprising the administration, but hardly is a basis for concluding that voters in general have zero interest in issues simply because the administration evidently does not.
Although comforting, the having a majority of the votes is a misleading metric in some ways, the electoral college is skewed so that voters in states with lower population have more power so each vote is not equal. This effect carries over to the Senate where a similar outcome with lower population states having more power so one person's vote is more powerful depending upon their geographic location.
> Although comforting, the having a majority of the votes is a misleading metric in some ways
In some ways, perhaps, but not when the question is whether the actions of the person elected can, based on the election results, be taken as proof that the voters collectively have zero concern for an issue.
> the electoral college is skewed so that voters in states with lower population have more power so each vote is not equal.
True.
> This effect carries over to the Senate
No, it's a carryover from the Senate: electoral college representation is identical by state to Congressional representation in both houses combined.
While I agree with your stance, I don't think using HRC as an example, nor her supporters is an accurate example. She got played trying to play the GOP's own games. Now if you had said Bernie specifically...
Overall, which one of the following best describes how well you are managing financially these days?
14 (0.1%): Refused
893 (7.2%): Finding it difficult to get by
2,395 (19.2%): Just getting by
4,930 (39.6%): Doing okay
4,215 (33.9%): Living comfortably
If 40% of people can't find $400 in a pinch, then it means at least some of those people self-reporting as "Doing OK" still can't find $400 in an emergency.
There's just so many ways Americans are getting wrecked. College debt, housing crisis, terrible public transit, ruinous health care prices, and looming pension crisis that the government will have to print its way out of.
This makes it clear why our current capitalism doesn't work. The ruling class / rich and wealth people and businesses could extract more wealth out of the middle and lower classes than they do now, if the lower classes were more stable and secure.
In the US especially, but nearly everywhere, there are hoards of people trying to lower or eliminate social services, basic science research, etc, with the dog-whistle claim that those things are not necessary and should not be provided by the state or using state funds. This line of thinking is extremely common in conservative circles, where they claim that societal prosperity would come from hurting the poor as much as possible in order to extract the greatest amount of wealth from them.
But when you look at statistics like these, it is clear that there is no more wealth to be extracted from the lower classes - they are all just merely trying to survive. Provide UBI or something like it, along with all other things necessary for a strong social net, and watch the rich get even richer while the poor grow into a stronger middle class.
It is especially confusing that this outcome seems to be hated by the rich, despite it certainly lifting their wealth. It makes me wonder if much of conservative policy is just as much about hating the poor as it is helping the rich - because conservative policies that hurt the poor are increasingly obviously hurting the rich. I just don't understand why it isn't taken for granted that we need a stable society to make more money over time. That seems clear to me.
Many of those in poverty today are there because of the systematic oppression of the poor across America for the last many hundreds of years. Blaming them for it isn't going to help - they aren't even being provided basic education, as that is also being cut in many places in the USA (so how do you expect them to become financially aware, anyway, if they are not taught that growing up in school? Parents raising children in poverty are in no place to teach their own kids financial management skills).
To lift people out of poverty we must change our attitudes towards class and capitalism and be more compassionate to create a more stable society.
I’m not entirely sure why you’ve been downvoted, because this also seems intuitively obvious to me.
A long-term stable society, with a controlled income and wealth gap, seems to be in the general long-term best interests of everybody, rich and poor alike.
This is good for the rich in the long term (Because it avoids violent revolutions), but bad in the short term (What are the odds there's going to be a revolution next week? Pretty low!)
I am and know many conservatives. I don't see any "poor hate," though I don't argue it doesn't exist. Rather, it seems conservatives get upset at the idea of an unlevel playing field, i.e. creating policies that favor one group over another. Well-intentioned as any given policy may be, we are opposed to crafting government rules or benefits that apply to one set of people and not another.
But the playing field is already incredibly uneven; surely one of the goals of state-backed systems is to help make it more even?
It’s reasonable to debate the precise methods through which that is achieved, but I’m not as sure that many people would object to the underlying goal.
Every policy favors one group over another. The policy against murder favors non-murderers against murderers. The question shouldn't be about whether a policy favors someone but whether the policy helps someone live a better life.
Do you not think that it should be an unlevel playing field? If you happen to be born (by complete luck) into a house where you always had a meal on the table & books to read, you're already miles ahead of many people.
To me it just seems fair to help those who through no fault of their own have been born into poverty. A "level playing field" just helps those who are miles ahead to begin with.
If you haven't seen it, you might want to watch this video [1] on a "race" - see how level the field actually is.
> Well-intentioned as any given policy may be, we are opposed to crafting government rules or benefits that apply to one set of people and not another.
Conservatives talk about poor people as if it's a permanent attribute that can't be changed like "race". Poor is a tangible attribute. The programs which you fear so much are there to help people change that attribute.
But I get the feeling that many of the so-called conservatives use poor as a euphemism for undesirable people they don't want to see get ahead or mingle with. Why else would you refuse a helping hand to someone in need?
What I find ironic (as an exmormon/ex-christian now semi-agnostic person -- I still quasi believe there could be some sort of afterlife but the bible is dead to me.) is that those on the 'christian right' are more prone to push out the poor and neglect them those who are on the left more anxious to help and alleviate their pain points. -- I've known humanists, secular buddhists, atheists, and agnostics with bigger hearts and more care for the poor than the majority of God-fearing people regardless of faith.
One reason I stopped believing is because of all the hypocrisy I'd hear. Go to church on Sunday, leaders of the church officially deny supporting a political agenda, then they go about instituting anti-gay propaganda and fighting against legalizing marriage, or legalizing medical marijuana. Heck the LDS church is trying to ban the ability to record someone (like a Bishop) without them knowing, because they're afraid of the backlash they themselves might have (and so far are having with recent events).
Yet, I still admire Jesus and what he taught... the sad thing is.. there's no Jesus in most of America or they'd be fighting to cure the sick and the poor, they'd want universal healthcare and guaranteed basic income. Even Jesus forgave the Harlot and welcomed her at his table, so why not forgive the drug addict and give them a home regardless?
I say make GBI require you spend it on rent/mortgage -- to receive it you can't be homeless - you must have a physical address and only one check per address + x amount per person living in house, --maybe 2k per house/apartment, 500 per adult/child extra living therein.
This even helps the economy as poor people are most likely to spend the money locally instead of squirrel it away in a trust fund or investment.
If I had GBI, I'd quit my day job and finally launch a side-business or go freelance full-time, but I work 60 hours a week on salary for 80k as a developer because I have to pay the bills and my wife stays home with the kids. I could really use that money personally to just float by when freelance dries up, or my side project fails, and I start building the next one.
"Rather, it seems conservatives get upset at the idea of an unlevel playing field, i.e. creating policies that favor one group over another."
I posit that this is not true in the least; they just get upset at the idea of a policy that isn't targeted at giving them the upper hand. Otherwise, they're perfectly fine with policies that favor one group (them) over another.
Given its size, the HN audience's ideology should fit a normal distribution just like the rest of society, but adjusted for the fact that it selects for people who work in tech. A "silent conservative majority" is unlikely on that basis.
The Shock Doctrine [1] described that idea that the rich could undertake disasters of various types in order to push unpopular policy in their wake. I don't think it was ever updated to the 2008 recession, but the bailout of the banks via buying poorly performing securities via quantitative easing follows that though with the same effect. The fed bought risky bank mortgage securities, while still allowing mortgage loan servicing continue to collect on loans and real estate parcels (and equity value) of individuals who didn't get a bail out - and now whatever survived will be sold back to the banks.
Even if not intentional, it's a question of financial buffers. The extremely wealthy can weather recession and do even better by buying distressed assets from any who don't have the buffer which they hold. It's not the absolute numbers of the wealth, it's the amount of growth in control of assets that matter in this model. Without the right public policy, the wealthy win on the backs of the poor on the downswing and upswing of the broad economy.
Isn't this similar to a prisoner's dilemma but on a large scale? If the society is optimizing for a global maximum then the few individuals would be better off by being selfish and optimizing for a local maximum.
The US is incredibly rich country. Every second teenager is carrying iPhone worth more than yearly income in a large portion of the world. It is all thanks to capitalism.
Problem is that most US population is not educated/smart and easy to manipulate into crazy consumption. UBI will not fix it, it will make it worse. Even putting more money into education is not really a clear solution.
You need to understand that middle class is gone. Beside 2-5% of highly specialised STEM workers everyone else job is already subsidized.
Every second teenager is carrying iPhone - are you sure? [Citation needed]
Problem is that most US population is not educated/smart and easy to manipulate into crazy consumption - conspicuous consumption: a fault that can be levied far wider than just the US. The US has a well documented and understood education system and their unis are respected across the world.
You need to understand that middle class is gone. - Wot?
2-5% of highly specialised STEM workers everyone else job is already subsidized. - On the face of it, an economy cannot function like that. Are you saying that the 2-5% are subsidising the other 95-98%?
(You write in English extremely well but you quite consistently miss the indef/def. articles out.
For example: the US is an incredible ... an iPhone ... the yearly ... The problem is ... most of the US population ... the middle class)
> Every second teenager is carrying iPhone - are you sure? [Citation needed]
There is 70 millions of iPhone sold in last 4 years in US.
If you include other high-end phones it makes teenager/adults to carry half the year of work in Pakistan and year of work in Madagascar.
I have yet to see a UBI proposal that provided non-trivial amounts of money and yet was not simply financially impossible.
For example, there are over 300M (300,000,000) people in the US. To provide $1000 per year would require $300B. But that's less than $100/month. If you're homeless, that might be enough that you don't starve. But it's not enough that you can go to a doctor and eat. It's sure not enough that you can pay rent so you can get off the street.
If you make it $1000/month, now it's enough money to actually help people. But it also costs $3 trillion a year. That's twice the current Federal budget. So either taxes have to be three times as high, or they have to be twice as high while we eliminate every other thing that the Federal government currently does.
I don't think raising taxes to that level is possible, politically.
The usual answer to this objection is that the government can simply print money. Yes, they can. So could Venezuela's, but that didn't work out very well...
I think the solution is going to have to come from a change in society, not from a change in government programs. I think the rich are more often blissfully ignorant than they are evil oppressors. Things may start to change when the rich actually know some poor people, and can see the way society's structure looks through their eyes - when they can feel the pain it causes to people that they know.
"If you make it $1000/month, now it's enough money to actually help people. But it also costs $3 trillion a year. That's twice the current Federal budget."
The 2015 Federal Budget (I guess the last time we actually had and official one) was about $3.8 trillion dollars. The budget President Obama submitted on 2016 for fiscal year 2017 was about $4.2 trillion.
Anyway, there's a crucial difference between "financially impossible" and "politically feasible." It's important to distinguish this because what's politically feasible can shift over time; it's not interesting to talk about whether we can agree to build a perpetual motion machine but it might be interesting to talk about whether we should send a manned mission to Mars.
Alaska benefits from the petroleum fund but they have what could be termed a UBI since every citizen is eligible after a few months. Studies have found the support from even the small sum is enough to help people counterintuitively try to find more work. (Possibly due to people being too poor to even transport themselves to areas with work without the UBI help.)
https://www.marketwatch.com/story/finland-has-been-giving-68...
What if the government took back the land.. i.e. all land is owned by the government and all resources under the land. Then everyone pays land use 'tax' that covers everything, those who own buildings on land pay the tax, those who rent could be charged some to offset the tax. Also putting a max limit on CEO pay wouldn't hurt 200x employee average, everything over that including bonuses is taxed at 100%. -- There are ways to pay for everything -- look at how taxes for the top 10% have dropped since FDR's day - it used to be 90% now it's like 40'ish but CEO pay has skyrocketed to as much as 5000x the average worker.
> This makes it clear why our current capitalism doesn't work. The ruling class / rich and wealth people and businesses could extract more wealth out of the middle and lower classes than they do now, if the lower classes were more stable and secure.
The goal is not to maximize wealth, but to maximize power over others. Insecurity in the working class does not increase the maximum extractable wealth for the capitalists, but it does increase the power that the capitalists can exert over the working classes because security creates the practical freedom to not knuckle under.
Wealthy investors are happy to tell founders that a smaller percentage of a bigger pie is a better deal, but then seem not so happy to make their percentage smaller in order to increase the size of the pie for society at large.
Investors have to fight hard and endure a long time for every % of return. Society on the other hand will never be satisfied with their piece, they will always need more, and sooner not later.
"Workers have to fight hard and endure a long time for every $ of income. Investors on the other hand will never be satisfied with their piece, they will always need more, and sooner not later."
Society has to fight hard and endure a long time for every % of return. Investors on the other hand will never be satisfied with their piece, they will always need more, and sooner not later.
Or as Adam Smith put it: "All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
IMHO, this is 180 degrees backwards. It feels like most of the financial industry now is focused on short term profit optimization over long term value growth. Long term investors are notable exceptions.
America is over. The class divide has surpassed any reasonable threshold and in time it will only further crystalize. This country needs an Elon Musk to replace every part of the government, which is itself a jobs program at this point. We do not live in "America" anymore.
I was with you until your Musk comment. We don't need more centralization of power; instead, we need decentralization--more local sustainability in place of the just-in-time global economy we live in now.
The other side of his comment about the class divide is kind of telling though. It implies that the middle class is the most unstable of the three major economic classes in the long run. And with the current system of constraints, contents only want to settle in the top or in the bottom.
I have to agree. No matter what one's political leanings or who one believes is responsible, it seems true. Perhaps this is a reversion to a historical (read: modern civilization) mean? One theory is that the period immediately after World War II was an abnormal period of prosperity for the United States, seeing as how much of the developed world elsewhere was simply destroyed.
My Musk comment was more about how much of NASA had turned into a jobs program than anything.
Take a very simple example, the BMV. We've had good internet now for a couple decades and you still can't do basic transactions without going to the BMV in the middle of the day.
Almost all other government agencies have been entirely immune to technological change as well. They are, jobs programs.
Can you explain why you feel NASA is a jobs program? There's certainly a much larger, constant-stream funding source going to national defense and national sciences. NASA is being paid to continue our usually unprofitable interests in space. Everything else falls under the non-compete restriction. Also, NASA employs some highly employable folks who would make much more in private industry.
I'm actually not going to do this. If you want to have this conversation go read up on it. Not trying to be rude but your question makes it sound like you've never heard the idea before. Given that, I feel like you're not ready to have this conversation. ...I'm trying not to sound rude but it isn't working. I am not expressing malice towards you.
Again, I have to say I really hate how my previous comment sounded. There's just a lot to this and I didn't want to try and defend the very idea while arguing about government reform because it would have been an uphill battle. Sorry for how rude that sounded.
The basic idea, though, is that NASA (while awesome) has been building a heavy lift but also disposable and expensive new rocket. There are a lot of traditional contractors (Boeing, Lockheed Martin, ATK) across the country helping to build the rocket. This means jobs. So congress supports the program, despite its cost, because it means jobs. This stifles innovation as evidenced by what SpaceX has been able to do on a fraction of the budget. This branches and goes deeper with organizations like the ULA which charges several times that of SpaceX but has failed, completely, to innovate. Anyways by the time NASA's new rocket will be ready SpaceX will be have been launching Falcon Heavy for years and possibly even launching the BFR. This means SpaceX will have more powerful, more reliable, reusable, cheaper rockets. All this time NASA has been unable to innovate because ??? and now the entire SLS is nothing more than a jobs program.
The article is about congress using NASA to send money to their districts by building out the lift program.
Thats Congress being dumb. NASA may have become a jobs program, but it isnt supposed to be, and Musk is a response to that, in my mind.
"A surprise billion dollars may sound good. But while adding money to “Space Operations,” the Appropriations Committee also cut $660 million from NASA’s science, aeronautics, and space technology programs that build the telescopes, observatories, planes, and landers that make the agency so beloved. In justifying this decision, the committee wrote that the rocket “is the nation’s launch vehicle that will enable humans to explore space beyond current capabilities.”"
dude i just googled the first article that came up. i then spent about twenty minutes of my time to try and explain it to you as simply as possible. then, actually exactly as predicted, you turned around and started an argument. i guess i was right after all.
America or more specifically California has tried local responsibility for zoning of housing and it has created a crippling housing shortage. Local or centralized, sustainability comes from the right incentive structures.
There's a lot of negativity in this thread and the title is very sensational. The point that should be highlighted in the article - "The bright side? That's an improvement from half of adults being unable to cover such an expense in 2013. The number has been ticking down each year since."
I wonder if that's tracked to inflation. A $400 medical expense from 2013 is likely closer to $500 today, which might account for the difference from 50% to 40%.
Govt inflation numbers represent a portfolio consisting of all commodities in equal quantity. But if you hold a portfolio of iPhones, Toyotas, and etc (assuming they are non depreciating assets) that number would double very easily.
Government inflation numbers don't work like that at all. They are based on the Consumer Price Index, which uses a market basket of consumer goods and services.
Yes, but all of them being commodities (what I said) is not the same as inflation only being accurate when someone purchases every commodity available in the marketplace (what you said).
Inflation of a portfolio of iPhones is completely different than inflation that an average American pays due to cost of living changes in the economy. You're cherrypicking a hypothetical scenario that doesn't apply at all to the example at hand, which is the average person's ability to pay for emergencies that arise related to living expenses.
Which includes blackbox modifiers like "hedonic adjustments". So if it costs you $800 to get a cast for your broken leg today as opposed to $400 a few years ago, but they claim the quality of the cast is twice as good, then they say there was 0% inflation as you are getting the same "value" even though its costing you twice as much to fix the same problem.
Yeah that's not too big of a change. Medical expenses, at least measured by national health expenditure per capita, have grown about 17% since then [1]. An additional 17% on $400 would be ~ $468. That number could be enough to account for some of the difference. Of course, medical expenses are by no means the only type of emergency expense, and what you've said about inflation as a whole is still true.
Why does it seem unlikely? I don't know the shape of the distribution but it doesn't seem implausible to me that a 7.5% change in the threshold amount would correspond to a 10% change in the population quantile.
Medical expenses are going up much faster than inflation. At least 4% annually I think. Maybe as much as 6-8% on average since 2013? I see varying figures, but definitely not 0-2%.
Average increases in nationwide medical expenses and inflations' effect on the average household are completely separate issues because the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation's health care costs.
The inflation of medical expenses in the US significantly outpaces the standard measures of inflation that you're quoting, generally by at least 3%. The OPs estimate of $500 is much closer to reality than yours.
Quoting a factoid about the distribution of actual medical _spending_ doesn't change the incorrectness of projecting CPI onto medical _costs_. There are indices - the BLS maintains one and a number of actuarial firms publish others - that track the costs of various medical services and they all outpace CPI.
You're right, there are a lot of factors at play here, its not a simple issue, and both myself and OP were somewhat oversimplifying things on opposing ends of the spectrum. My point though is that simply looking at the increase in the cost of medical services across the board is different than looking at how much the average American family is actually spending on medical costs year over year, and that is a key differentiation.
The negativity in this thread is justified, and the headline is correct to highlight the darkly absurd desperation of the average citizen's situation. To attempt to look on the bright side here would be analogous to a commenter on a news article in 1918 saying "well, 50,000 people will die of Spanish flu this month, but let's look on the bright side: 75,000 people died last month!"
Furthermore, even the statistic that 40% of people can't cover a $400 expense is lowballing the severity of the situation, because who says that $400 is anywhere near the average financial cost of an unexpected emergency? What percentage of Americans can't cover a $500 expense (we know it's more than 40%)? What about a $1,000 emergency expense (which in my estimation is closer to the median deductible for a health insurance policy (assuming that one has health insurance in the first place))?
I had a coach that when I'd ask about how to get out of tricky situations he'd often respond with something along the lines of "Bro, you f'd up a long time ago"...
I don't think 40% is some magic number to begin hysteria. Neither is $400. Selling something to cover your expenses might be a blessing in disguise if the thing you sell is a liability in the first place (ex: a car you cant really afford).
My observation of America is that for a whole lot of people we F'd up a long time ago... These people need financial education, they need to be taught to not buy things they dont need, they need to be taught delayed gratification and to not be consumerists.
Unfortunately if we did this we would be in a much deeper hole than the great depression. The economy only works because people have been trained for 80 years to buy things they don't need, throw them out when they shouldn't and replace them with pretty much exactly the same thing they got rid of.
This might be a bad state of affairs to be in, but before we go trying to change people we need to change the system. Else we will be looking at Hitler as a moderate who had some reasonable national policies.
"Selling something to cover your expenses might be a blessing in disguise if the thing you sell is a liability in the first place (ex: a car you cant really afford)."
In that specific case, no. In the US today, a car is damn near mandatory. Otherwise you'll be spending hours commuting on a bus, and that's if you're lucky enough to be somewhere with decent bus service. And that's assuming you have the type of job schedule where you can have that kind of time.
Many times, not being able to keep your car, even if it's expensive in maintenance costs, means you could lose your job.
"They" need to be taught to demand a degree of rights, protections and subsidies in line with the rights, protections and subsidies afforded the already-wealthy.
I bet a lot of the people with little savings would argue that they didn't F up, they just were born into a poor family.
If you are poor, it's much harder to take risks and try to get ahead. You are always on the hook for your rent and can't just go ask your parent for a 0% interest loan to help you out for a couple months.
Yes, a lot of Americans have bad financial habits and buy unnecessary things. But some of these people with little savings are doing everything they can to stay afloat and just don't have the luxury of doing an 8 week data science boot camp to get a better job (or they would miss rent and get evicted).
> My observation of America is that for a whole lot of people we F'd up a long time ago
I didnt say the individuals are the source of the issue. I'm saying as a society we screwed up by more or less creating this issue. Things like a lack of financial (and other) education, or failing to teach adequate data science in high school etc.
Now back to the headline: $400 in available readies? You do have to start measuring somewhere when looking into poverty but it is harder than it seems on the face of it. Many people will drain their balance regardless to zero or below, (nearly) no matter how well off. I recall being a youngish lad with an income of £30 per hour - let's realistically say ~£50,000 per annum (gross, pre IR45). At that point in my life, I too would often qualify for "can't find £350" right now. My real point is that you have to be really careful how you measure this sort of thing, ie trying to quantify bits of people's lives with simple pithy statements.
I’m skeptical that this happens much. It reeks of urban legend.
Now, I’m sure some seniors do this, but I suspect it’s due mental issues rather than fiscal concerns. Is cat food even cheaper than really cheap canned food?
In my experience, nobody wants to hear this, but basic food is damn near free. I get it, I get it -- it's just a silly thing Sean Hannity says. It also happens to be true. Nobody has to eat cat food to save money. Have you priced beans and rice lately? It barely costs anything.
Beans and rice ≠ protein, and yes, carbs are giveaways. But that's not all good.
Anecdote here, but I knew two competent, capable seniors (each on Social Security) who in fact ate canned pet food because it was a source of meat that they otherwise couldn't afford. I doubt I knew the only two people in America who do that.
"Mr. Speaker, it was reported to me that there are seniors in my district who eat dog food when their food stamps run out,” she said. “I was appalled and went to see for myself, and I was dumbfounded."
They live on Social Security. Sometimes I tell people this and they seem surprised. It’s not surprising to poor people. My grandparents never had more than Social Security in retirement. It’s all my mother has (or all she would have if not for me). My uncle just died a few months ago, but he had been living on Social Security, too.
Poor people don’t have retirement money. They live off their Social Security checks. It’s that simple.
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
No it's not. Poor people live in food deserts and buy 5000 calorie dinners for $2 at Dollar General. It's hardly discretionary to try to feed yourself real food. Now let's tie in the cost of healthcare associated with eating cheap junk food and you've got a problem. This is like an argument with someone who denies global warming.
Unless someone is starving, spending more on food as income rises is discretionary. A proper food budget is stable, it should not change as someone earns more money.
As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
If you don't mind me asking, how long ago was your experience with minimum wage? Also, did you have access to a store where you could purchase fresh fruits and vegetables?
> Unless someone is starving, spending more on food as income rises is discretionary
It's also not discretionary if at lower income levels they receive a greater share of direct food aid that isn't counted in their spending because they never exchange money or a money-denominated voucher for it.
> As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
Many of the poor:
(1) Aren't able to find work (and may not be able to work; permanent disability is a thing, and positively correlated with poverty),
(2) May not work find full time work when they work, and
(3) May be supporting non-working (and unable for age or other reasons to work) dependents on their part-time, intermittent, minimum wage income.
I’m amazed that your personal experience was so representative that you don’t even have to consider that other people’s circumstances might be different.
As of 2012 food costs as a % of spending are the lowest in the US than anywhere else in the world. [0] During the Obama administration there was a massive increase in enrollment with the SNAP program. [1] Between government programs and charitable organizations I'd argue it is practically impossible for someone to go hungry through no fault of their own. You'd have to be unlucky on a cosmic level.
A rational actor defers maintenance when money is scarce. That doesn't make maintenance discretionary, just deferrable and indefinitely deferred maintenance eventually causes unavoidable, huge spending.
It's a definition that works for how economists talk about things, but is extremely out of phase with the colloquial definition. Hence the stated outrage from the parent on how the poor spend so much of their income on "luxuries", when that refers to different things than what most non-economists would define as "luxuries".
You make it sound like poorer Americans are blowing their paychecks on designer handbags, but the article makes it clear that that's not what's happening. "Luxury goods" as economists define them are not what you'd expect. To quote the article:
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
while smoking and lottery-ticket buying are categorized as necessities.
I gave up smoking a couple of months ago after 30 odd years - I now feel rather stupid, given how clever I really am. I have never been a gambler but the parallels are very clear to me and I have a couple of friends who are gamblers and display the same stupidity. I keep my gob shut.
I do not agree with the definition of necessity implied above. Gambling and drug taking (smoking int al) are not basic requirements for life. Eating is. Eating at McDs is simply buying calories and possibly a few other basic life sustaining requirements and consuming the same. McDs may not provide you with all the nutritional requirements for a healthy life but you will get a lot of calories in. Until embarrassingly recently, the sole stated purpose of eating was calories. Brits are still not known as Limeys for nothing.
Fags and bandits can go and *////~~~~ bbbbzzzzt OFF!!!!
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
In other words, the whole study is complete nonsense because those definitions are ridiculous and completely detached from any sensible definition of those words.
they're not useful for the discussion we are trying to have in this thread, but it seems a bit presumptuous to say that the entire study is complete nonsense because they use certain terms of art in the way they are normally understood within their field. a paper talking about the "power" of turing machines is not hogwash simply because other people mean something different when they talk about compute power.
I find this truly hard to believe. Half of the country is on the verge of homelessness and poverty? Bullshit. Get out of your bubble and go see other parts of the country. See the rampant consumerism and tell me this isn't fake news.
No surprise that low income consumers choose to consume rather than save as saving account with a low balance has no direct impact on generating additional wealth.
The average American spends about twice that on just beer (not all alcohol) every year. I share your concern for poor people dumping money into the lottery, but that’s actually a pretty small vice.
easier to get rid of lotteries; no constitutional amendment required. some of the beer spending also comes from people more able to tolerate the wasted funds; those with the least are the most likely to play lotteries.
The court found the law unconstitutional on procedural grounds. In particular, the federal government did not ban gambling. It required states to ban gambling. The court ruled that the federal government cannot force states to pass laws.
Interesting. I wasn't aware that was the basis of the ruling.
I'm not entirely clear about the legal implications, though. It's unclear if the majority would also overturn a direct ban, but obviously this case would not form precedent.
Of course the states themselves could ban the lottery. Many of them already do. But states can also ban alcohol and indeed several continued to after the 21st amendment was ratified.
People wonder why payday loan companies are becoming more popular. It might be kicking the can down the road, but when $400 is a killer then people will kick the can.
We can’t improve the money situation without improving the “free time” situation too. For people with 2+ jobs and hours of commuting, when is there time to do anything that would remotely fix their financial situation? Exhaustion for starters. No time for more school or other improvements that might net a better job. No time to even research where a better place to live might be. Heck, even voting for someone to help change your situation takes a lot of time, if you want to figure out which candidate is truly in line with what you want.
Wow, everything in this thread is "those evil rich people, fleecing the poor." Quite aside from the fact that the target audience of this site can expect to make around 2X the median income of the US--meaning that we are those evil rich people--surely the problem isn't this one-sided.
The poverty rate in the US is about 13% [1]; we would expect those people to not have any savings. That leaves about 33% unaccounted for. It looks like 42% of workers in the US make less than $15/hr [2], which does fit the figure fairly close. However, some of those are teenagers, so they don't count as they aren't living on their own.
I'd like to see some analysis of spending. How many people don't have any savings because they aren't spending wisely. This girl [3] discovered that she could actually save for a deposit for a house in London, despite making under £40k (about $53k). That's less than the median US income and presumably doesn't go all that for in London. She was simply spending a lot of money on food, drinks, and specialty coffee.
I would push back on this bit about teenagers:
> so they don't count as they aren't living on their own.
I think it's a significant assumption to make that parents would be able/willing to cover a random $400 expense. The study did not specify a specific type of emergency expenditure, just that it was unexpected. I can fully imagine a scenario where parents would cover hospital visits for a bad case of the flu, but not cover an abortion, or repairs to a car from an accident where the child was at fault.
The latter two examples still seem like fair 'unexpected expenses' for the child dependent making < $15/hour
This is kind of tangential, but I find it a sad commentary on our society when an abortion is considered a "fair unexpected expense" of a teenager. Abortion is 100% avoidable [1]. And regardless of your view on women's rights, etc. the fact is that a living human is killed in an abortion. "Don't have sex until you are okay with the possibility of getting pregnant" apparently isn't very popular, but the situation is entirely preventable. (I'm not trying to push an agenda here, just reacting.)
[1] Unless rape is involved, but that isn't the normal case. (Abortions because rape are 1%, according to http://www.johnstonsarchive.net/policy/abortion/abreasons.ht.... Disclaimer: I scanned the link for figures, I didn't try to figure out if it is pro- or anti- abortion.)
>Quite aside from the fact that the target audience of this site can expect to make around 2X the median income of the US--meaning that we are those evil rich people--surely the problem isn't this one-sided.
Not debating this fact, however cost of living makes a huge difference. 2x the median income doesn't mean much if everyone lives in big cities where the cost of living is 2x the median also. I feel like this is a point that has been ignored in this thread by a lot of people.
Also one note on one of your sources: the guardian article mentions she's living in an ex-council house with a flatmate. I've lived in an ex-council flat before in London, and honestly it is not for everyone. There was zero insulation so even with the heating on full, winter was unbearable. Constant electrical problems. Decent chance of getting mugged while taking out the trash. Mould in various places that never got dealt with. I know all ex-council flats aren't like this, but are we entirely comfortable with saying that above-average earning professionals in metropolitan cities should have to live with flatmates, often strangers, for up to ten years, often in increasingly poor conditions, while significantly cutting back on their quality of life, to be able to possibly afford a small flat likely an hour away from where they will work? It's easy to tell people to cut back on going to the pub or eating out, it's much harder to do when you're living in a mouldy shoebox and need an occasional break from misery, especially when you have friends that will still go out without you and adverts telling you to buy avocado on toast everywhere you go.
I agree with you about cost of living. But my point was, that someone living on what I would consider to be an untenable income for London is actually able to save up for a down-payment on a house--in London! Sure, I understand the desire to have a "break from misery," but my point is that the conclusion she came to was that her lack of savings was entirely her decision. If someone living in ex-council houses (as an American, those words don't mean anything to me, so thanks for your description) has the financial ability to save up for a down payment, I think a lot of people in the U.S. do, too. Sure, it takes some self-sacrifice and discipline. I'm not saying it's easy. I'm just saying that I don't think we should be blaming the evil rich people for people's lack of savings without having a look at some personal responsibility.
The problem is one-sided, it's a trope to blame poor people for not being frugal enough when lower income wages have stagnated over the last 40 years. The wealthy in America are relieved of guilt if it's not their fault poor people are poor.
We've systematically gutted social services for the poor while giving tax breaks and subsidies to the rich, then we blame the poor for buying consumer goods (which we market to them and need them to buy) instead of saving their income.
So it's better for the poor to blame the rich and be relieved of the guilt of being poor? It's not one-sided, and to say it is allows for a victim mentality that is harmful to anyone reading this and not thinking critically. I acknowledge that there are myriad reasons for becoming poor. Some people have one horrible tragedy after another heaped upon them to the point where they are destitute, and to those people we need to lend our aid and sincerest sympathy. There are others, however, who are poor because they spend their money foolishly, often times in a unconscious attempt to assuage feelings of depression, anxiety, or lack of agency. These people also deserve our sympathy, but they will never escape their issues without actually realizing they have a problem and seeking help. I fear that comments like this enable those people by re-enforcing their belief that it's a one-sided issue that they have no control over, and to them you're doing a grave disservice.
That kind of sums it up right there. Most wealthy people in this country didn't become wealthy because they were able to save money while working for $15/hr.
You can't save your way out of poverty, the poor don't want your sympathy, they want dignity. They want a living wage, a pension, and healthcare. We can afford to give it to them, we're just too focused on making more billionaires.
> Those who don't have the cash on hand say they'd have to cover it by borrowing or selling something.
Be careful about concluding that these people are poor. I'm not poor, and I have no cash. Everything is invested. Piling up cash in a savings account just means it'll get eaten away by inflation.
This is hardly uncommon. If you've got a house with a large payment, you aren't poor, even though you may not have any cash. Your money is invested in the house.
A version of this comment appears every time this is discussed. This isn’t what we’re talking about. These aren’t liquidity problems. People really just don’t have the money.
It's literally what the article is talking about. I included the quote. I suggest they are misinterpreting their data, and are measuring the wrong things.
It's like that daft statistic a few years back that 40% of corporations don't pay any income tax. This raised all sorts of righteous hysteria. Never mind that 40% of corporations lost money that year, and income taxes are not due when you lose money.
Maybe the best thing I can do here is concede that "can you find $400 for an emergency" is an imprecise question that this article doesn't (and can't) answer.
I think I know what it's saying (probably because I have a lot of experience with the type of people I'm imagining) and you guys think you know it's saying something else (because of your own experiences having money that's inaccessible), but, ultimately, the question is too imprecise for either of our claims.
So, yes, I strongly suspect I'm right -- "selling something" is pretty plainly not referring to financial instruments -- but it's true that it's more intuition than fact.
That may very well be true. But the point still stands that "can you find $400 for an emergency" does not measure what you think it measures.
Having said that, it is still problematic that %40 of the population answers no to this; and I suspect that in most cases it is actually the case that they simply do not have the wealth. In fact, I think the phrasing in this article is far less problematic than the "in savings" phrasing one often sees.
Further, I would go so far as to say that people, who have wealth but cannot cover an unexpected $400 expanse are genuinely victims of poor financial planning. If you are in that position, open a line of credit. Most credit cards will give you at least 1 month of 0% interest; and if you have equity in your house you should be able to use that to secure another low interest line of credit if you need to. Sure, you don't want to rely on either of these for day to day expenses, but they are a fine solution to solve the liquidity problem of emergencies.
EDIT: I suppose my solution may fall under the catagory of "borrowing" which the article says is how the quoted %40 would cover such an expense. I read that line as talking about borrowing from friends/family.
That seems like an extremely foolish investment strategy. If you don't even have $400 in cash you can't even cover some minor unexpected car or house maintenance. Even a minor market correction at the same time as a month or two spent out of work could end up costing you many times more than you could lose in investment income by keeping a few months of expenses in cash..
I do not believe this. Even when I was flat broke starving I could always scrape up 400 somewhere and that was decades ago. Credit cards, friends and family, pawn shops. There's a way. This is a VERY misleading headline.
308 comments
[ 27.0 ms ] story [ 5412 ms ] threadI will say this again. As a mobile adult, in the United States, to not have $400 on reserve for an emergency is simply not possible with proper decision-making. Individuals at that level of poverty have national and state level food stamps, welfare, disability, affordable housing, rent control, minimum-wage laws, child-support, often social security, medicare/medicaid. It's not as though the country has a non-existent social safety net. You simply can't propose that the solution can exist independently of the personal decisions made by the individuals in this position.
What you mean is that a college educated young white male in his 20s/30s will have $400 in spare change around the house. Because we can't be bothered to keep track of $50 notes we keep around for pizza.
http://www.nber.org/papers/w9873.pdf
People who have had a golden spoon in their mouth since birth and can't imagine a life where they didn't have their hands held to success the whole time.
They think that because they are not billionaires they aren't privileged and anyone can pull themselves up by their bootstraps, just like their great-great-grand pappy who came from Ireland and was treated pretty badly by the English in 1864.
There's a lot of "let them eat cake instead" mentality in that statement.
This alone is sufficient motivation to drive policies which ensure not just inequality, but humiliation of the losers.
Repetition doesn't actually make your claim any better supported, so maybe instead of repeating it, provide better support or, failing that, just stop instead of reiterating.
The reason for some people not having the money around is undoubtedly poor decision making, but for a great many others they simply have no gainful employment, no prospects of obtaining gainful employment and are often trapped in debt spirals due to past financial desperation.
I'm real happy for you that you're so far removed from their situation that none of this occured to you.
The vast US homeless population suggests we don't really have a safety net, so much as a safety rope you need to hold on tight and pray. Consider, if all the homeless people showed up in the same place that would instantly be in the top 10 US cities.
Yes, I've lost jobs before because of corporate restructuring.
I think we are mostly products of our surroundings so, yes, good decisions can help a lot. It just seems placing that level of "blame" is counter-productive and just does not represent reality on the ground. Trapped is trapped, you used the word yourself. I'd wager you have little idea the sorts of life traps that are laid out there. Having debt is pretty easy even with a better than average stability matrix. A single hit with bad luck is simply made worse as the "socially permitted" trolls eat their prey where no "socially permitted" social safety net exists that could possibly save them.
What is that? Trickle-down blame? You got yours? I simply don't understand the economics of "it's your own damn fault" with the force of a gavel.
Imagine you went to a crappy school where you spent most of your days trying to avoid gangs rather than learning anything. You did everything people told you to do and you applied to some for-profit bullshit college that accepted you. You signed some paperwork that you literally didn't understand the details of (because of said shitty school and parents who have never dealt with this situation before and for-profit colleges that explicitly set out to target people exactly like you). Now you have $50,000 in debt that you literally can't even declare bankruptcy on and no marketable skills. What do you now do?
To blame it all on personal responsibility degenerates into a No True Scotsman argument very quickly. It's the kind of overly simplistic thinking that makes thirteen year old kids think Ayn Rand had it all figured out and never think further than than her heroic fantasy novels.
(I admit, I actually really like Ayn Rand's philosophy if it's seen as an ideal, rather than something that is practically p[possible. Marx and Engels were also idealists and in their perfect world everyone would be happy too.)
Humans are not born with an innate understanding of optimal decision making and the power of compound interest. Our environment shapes us to a massive degree and you're discounting this.
The whole individual agency and moral superiority complex of American culture is more and more sickening to me as I grow older and see how most people simply with a rational set of actions and existing opportunities better off not pursuing what used to be the better options due to structural problems. Endless optimism only works so far for attitudes that help with success until you’re truly at a rock bottom point and nobody wants to be near someone that’s failed so much out of social niceties alone.
There are obvious exceptions for individuals suffering from unavoidable medical circumstances and the like, and I am fully willing to criticize our existing healthcare system's failings in providing suitable mitigation against such circumstances. But we're talking about 40% of the country.
Poor decision making or lack of personal responsibility are certainly sufficient to achieve such a situation... but they're not necessary. Unless you play with the definition of "poor decision making" to include things like "capable of making mistakes."
This could be a good time for everyone to review the concept of the Fundamental Attribution Error: https://en.wikipedia.org/wiki/Fundamental_attribution_error
https://www.goodreads.com/quotes/72745-the-reason-that-the-r...
https://en.wikipedia.org/wiki/Welfare_trap
What makes $400 the ideal number? Probably nothing, except the fact that it makes for the best headline, since "2 out of 5" is a quotable statistic.
Formulating advice should follow a different pattern. The ideal number for emergencies is probably closer to $5,000 since it covers more realistic emergency scenarios.
$500 might cover food, gas, a few taxi rides or train tickets and basic OTC medication like asprin for possibly a week.
$5,000 might cover a lost or stolen laptop, plane tickets, hotel stays, car repairs, emergency rooms and ambulances and out-of-pocket prescriptions, funerals, rent or convert to a month's worth of basic needs (food, gas, short-haul travel).
More is obviously always better, but emergency response is about covering the cost of capacity to react, plus supplies needed to take action, plus duration of endurance. $500 wouldn't keep you off the street for more than a weekend, but $5,000 could last a month or more.
Honestly, though, you're just stating the obvious: people screw up and behave irrationally. That's common knowledge.
The goal is to minimize the impact of poor decisions and give people a way to get back on track. "F* 'em, I've got mine" doesn't help anybody.
The problem occurs when there are MANY emergencies. You're about to get evicted, your car is broken down (so you're about to lose your job) and your kid is sick and you need a doctor but can't take the time off to get one.
>I will say this again. As a mobile adult, in the United States, to not have $400 on reserve for an emergency is simply not possible with proper decision-making.
Okay. The day your turn eighteen, your parents (who taught you very little and gave you nothing) kick you out on the street. You have no money (because they flat out stole it the day before you became an adult). Where does this magic $400 come from?
$400 is a LOT of money. The federal minimum wage is $7.25 before taxes. That's a week and a half of work without accounting for gas money to get you to the job or food to eat when you get there. After the basics (taxes, cheapest-possible rent, basic food, some kind of heating and lighting and a few other things) you're probably at the point where you have $10 or $20 left over.
Let's say you get sick, or disabled, or laid off. You are so fucked.
> Individuals at that level of poverty have national and state level food stamps, welfare, disability, affordable housing, rent control, minimum-wage laws, child-support, often social security, medicare/medicaid.
Have you any idea how long it takes to get disability? Years. And years. And it's not certain at all. What do you do in the meantime?
Even the other programs - they often fail the very people they are designed to help the most.
Child support? Again, have you any idea how many years it takes to get child support from someone who bails from their job every time the paperwork makes its way into the syste, and who never files a tax return?
I’m making well into six figures now, but in my early 20s, I was living pay check to pay check and barely had enough to eat some weeks. If I managed to scrape up an extra $400, I had a hundred things to spend it on that weren’t a rainy day fund.
I wonder if you suddenly incurred uninsured medical expenses of oh, let's say, 20X your net worth or annual income, whether you might see things differently.
A family of four on a $50K annual income would find a sudden $1000K obligation utterly devastating.
That's life for (IMHO) too many of us. On average, it has far more to do with luck than your proffered causal moral failure. I think we can do better.
I keep saying it; the amount of money in the system has increased +50% since 2008 [1], and worker compensation has gone up +25% (the BLS publishes a lot of series, I use [2]; hope it is right). So someone is getting a lot of money and it isn't obvious to what end - it isn't helping the workers or the poor, and nobody can make up that sort of difference by working harder. Workers are reaping a smaller percentage of society's bounty.
[1] https://fred.stlouisfed.org/series/M2 [2] https://fred.stlouisfed.org/series/A033RC1A027NBEA
It went from overt violence to less obvious propaganda programs tuning our feelings
I wish the “smart” crowd would look into the history of government-corporate propaganda research
I’m not talking “deep state”. It’s plainly recorded in government record how they financed propaganda research and gifted it to media for advertising and corporate use
Look at the joke history classes taught in public school
Look at the efforts to hide info about the environment by this admin
There is a concerted effort in our faces to deceive and misdirect is
Economics, jobs, and government scandals are distractions in support of these efforts
Read up on Greenspan’s comments in the 90s about growing worker insecurity being a boon to beneficiaries of supply side economics
Watch Varoufakis explain how during the Greek debt crisis German tax payers took out loans from German banks to have it to Greece who gave it right back to German banks
This is a generations long boondoggle unrelated to one policy decision 10 yrs ago
It’s a round n round we go with numbers because even the educated masses are too on the periphery to see or outright prevented from being in the room
Deep state is nonsense. It’s public record what’s going on
Lack of information or looking on the part of the rubes and proles doesn’t mean “conspiracy”
Especially when it’s a Google search away
It used to be that one could somewhat easily get $1M by just selling 1 million people some $1 items, however that required making 1M items in the first place. Nowadays one can get the same $1M by making just a single unit of IP, and selling 1M copies at $1 each. Sure there is no guaranteed way of knowing whether some IP will sell 1M copies, but that only turns it into a sort of lottery which exacerbates the inequality even more.
Given that money -and particularly M2- is credit, which is kind of an "intellectual property" on itself, it isn't really surprising that a greater amount of IP in circulation would also mean a greater amount of credit/money.
Workers who exchange their effort for a fixed amount of income, are just out of all this IP lottery and its income multiplying potential.
The true Middle Class probably don't make any distinction between anyone who is in the top 20% (household income over $116,000) or especially the top 10% ($161,000).
https://dqydj.com/household-income-percentile-calculator-201...
Because middle class in a capitalist society is an economic relationship between the captialist and working class (characterized by mixed dependence on capital and labor, most archetypically the independent operator who supports themselves by applying their own labor to their own capital rather than primarily by renting labor to apply to capital or selling labor to capitalists), and its members are usually well above middle income (though, on average, far below that of the capitalist class.)
The middle income quintile is largely members of the proletariat, not the petit bourgeoisie.
haut bourgeoisie (capitalists): those who own capital and rent labor to apply to it.
petit bourgeoisie (middle class): those who live by a combination of labor and capital, particularly those who apply their own labor (perhaps alongside a small amount of rented labor) to their own capital.
proletariat (working class): those who derive income mainly by selling labor to members of either of the preceding classes.
The main difference is in influence wielded...
In Marx's time, these categories perhaps mapped more consistently to the gradation of wealth and power, but there were exceptions then too.
And the degree to which an asset is "capital" that produces wealth and income without the owner's labor is relative to it's scarcity. The 30k car is a common possession, and also it has no added economic value without the driver's direct labor. A fleet of cars driven by rented labor is capital, as are factories, valuable land, or high concentrations of wealth.
Education is a kind of capital, but the surgeon's student loan is no different in than a social worker's student loan, except in the cost and income potential.
In that sense the surgeon is a worker but their work usually produces a great deal of extra income that allows them to purchase capital assets of other kinds.
In the simple, no debt financing case, that's the most obvious categorization, though much the same concerns that lead to questions about whether those drivers are rightly categorized as contractors might be raised as to whether they are genuinely self-employed independent business owners or rented labor being applied to Uber capital with a weird gatekeeping mechanism.
> and a surgeon working for a hospital who has put 400k toward education is part of the proletariat?
A lot to high income workers (surgeons often very much among them) are joint capital/labor earners of a kind that diverges from the independent small business owner model, because they gain substantial income, often deferred through reinvestment and often mainly in what are held largely as retirement funds, on capital to which their own labor is not applied, as well as selling labor to capital; for that reason they’d generally be seen as petit bourgeoisie, thought somewhat different from the main textbook example.
> Or do you count education as capital?
Traditionally, if it's not been made property that can be itself sold freely in capitalist economy, it's not capital in the analysis of economic class in a capitalist economy. (Looked at from within the system rather than from critics of capitalism, ask yourself: are the returns of education taxed like labor or like capital—that tells you how the capitalist system itself sees them.)
Finally, a condition wether your own labour is not technically required for survival.
Most petit bourgeoisie still has to work, does not wield direct (individual) political power nor has big enough assets to survive despite major downturns.
The difference from proletariat is that they can rent and hire labour. Sometimes they get to manage it too.
The social Dynamics of the modern anerican situation have changed so much from when Marx was alive his labels no longer accurately apply.
I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. And it's a growing trend, a lot of very wealthy people are starting to plead for higher taxes. The reasoning being if wealth inequality continues to widen, eventually it won't be a case of shaking the rich to empty their pockets a bit, it will be a case of hanging the rich from lampposts.
I've met a lot of anti-capitalists who are mildly Posadist/accelerationist for this reason. For all of the ideas in this thread regarding increasing taxes on the rich and social welfare problems, I cannot help but believe that ultimately, we are overdue large scale social unrest in 1st world countries. Placating the proletariat with incentives like tax breaks and welfare programs is great in the short term, but in the end it might just be delaying the inevitable, and making it far worse. I'm firmly of the belief that a new economic system needs to be part of mainstream discussion as soon as possible, because otherwise we will eventually have riots which cause a power vacuum, and history has shown nothing good comes from that.
This? https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocr...
Technically government is already equipped to do everything a charity can and more eith superior information so should be more efficient at it. Although it depends on the country/state in question.
Generally by that time the wealthy are long out of the country. In fact in most revolutions where people imagine they will take from the rich, people are generally in for a shock when they realize the rich are long gone. And now the door for a peaceful taxation is also gone.
>>The biggest achievement of the wealthy has been to convince the middle class to eat itself.
The wealthy have to convince nothing. Middle class is full of people who want instant gratification, and are bad at savings and investments.
Yes, it sucks to have trouble coming up with $400 for an emergency. But it's not a serious threat to the ongoing stability of society.
Our economy is predicated on consumer spending; we have a whole set of industries built on the backs of poor financial decision making and being near-broke (payday loans, credit cards, overdraft charge reordering, debt collectors, etc.) all of which pull power away from desperate people and give it to others (now your landlord/phone company/ISP/etc have legal grounds to kick you out, terminate your service, etc.) Never mind the difficulty of making use of a court system stacked against the poor...
> I hope voters and politicians recognize...
Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB[0], which was literally created to do some of the things you're interested in.
I especially like how Mulvaney is moving everything into "financial education", as if an agency with 500M budget is going to make a dent against the billions spent on marketing related to financial "services".
[0] http://www.latimes.com/business/la-fi-cfpb-student-loans-201...
Our economy, habits, and mindset can change with a great deal of work and energy. People are becoming more connected than ever before, and with that we can build a new kind of social momentum.
Hey, you're right, things suck now, but it doesn't have to be like this.
The only thing that will make it better is demanding that things change. This means mass unionization, strikes, worker owned businesses, protests, leftist politicians like Sanders and Corbyn, and a whole program of fundamental goods provided free at the point of service like healthcare, education, and child care. We have a lot of work ahead of us.
Unless you are a firm believer in the power of the Illuminati, we have as close to the opposite of a planned (and thus designed) economy as one can get in the present day.
Just because a behavior or other feature in a complex system is emergent doesn't mean the system was initially designed that way.
There is no vast monolithic conspiracy but there are certainly many smaller ones (lobbyists, front groups, back room deals, etc.) with incentives that align. Alignment of incentives can generate a result that looks a whole lot like the result of a big organized conspiracy.
If anything the less organized network of aligned interests is tougher to resist than an "Illuminati." It's more resilient and antifragile. Big vertically integrated power structures are slow and brittle.
I understand why this might seem like the most obvious answer, but your analysis seems to not take into account things like revolving door politics, regulatory capture, lobbyists priority access to lawmakers, citizens united, etc... etc... etc...
I don’t think most people would suggest that there is a small table surrounded by evil cackling billionaires conspiring to pull every single worldwide string, but rather there is a relatively small number of people who have enough money to buy themselves access to writing regulation and laws which favor their own interests which will often coincidentally align with the other billionaires who can afford this kind of access.
We can’t ignore the ways in which issues like this skew influence to a small number of powerful interests.
In short:
1. A big chunk of the issues leading to today's constitution were tax and debt relief measures being instituted by the states in response to populist movements.
2. The framers were mostly very wealthy and biased toward preservation of capital.
3. Many of the measures instituted in the constitution were designed to preserve wealthy Americans' property (slaves, for instance). Populist debt relief efforts made this an especially high priority.
4. The only way to get the states to ratify the constitution was to concede many populist goals (state legislators were largely very wealthy as well, and apparently stubbornly pessimistic about the constitution despite its immediate necessity).
The book goes into great detail on the reasoning and compromises made to create the constitution. I think you will find that politics rigidly define the operation of our markets.
I get where you're coming from but you have some insufficient assumptions about the context in which this particular complex system operates.
If you're trying to suggest that higher income socialists won't like it if they're the ones being taxed, then I don't think you understand socialists.
"Doctors, lawyers, and IT people making low six figures" have absolutely nothing to fear. And for the extremely few fortunate people who actually make more than half a million dollars each year, they will easily be able to afford the new taxes.
Have you noticed that most tax deductions that are designed to help the middle class phase out in the $120 - $160K?
Yep.
Most people are perfectly capable of distinguishing between a middle class 2 bedroom house and someone who owns 15 vacation homes, a private jet, and private islands.
The real question is whether or not middle class people will punch down and behave as if no one can distinguish between a multi billionaire and and a normal middle class person or whether the middle class will refuse to let the billionaires put all of the stress on the middle class.
How many people making the median household income of $60K a year will object to a politician saying tax everyone extra making a household income of $116K- the top 20% of household income?
That’s fine. Since we have a free market economy, someone else who wants that money more than you will do it instead.
On the other hand now that my marginal tax rate would be 33.6% (2018 Tax rates) since I'm already over the social security maximum from my primary job, it's much more attractive.
My wife would have jumped at the chance to make an extra work at $15 - $20 an hour (W2) when she was single, now at our combined tax rate, it's not even worth it. We are thinking about her working part time. The main reason she is working at all is for the health benefits that give me the opportunity to aggressively jump between contract, full time, unstable startups, and stable corporate jobs.
Taxes make a difference on how much someone is willing to work, especially if they make enough to be comfortable.
Firstly is your sole motivation for your business financial? Because if so you may as well sell it, buy property and let it out, you'll earn a comfortable living and if you use a letting agent you can get them to deal with the renters and do almost zero work, bar having to file taxes once a year (and hey you can get an accountant to do that for you). Even ignoring that, is your business something that actually generates a lot of profit or are the margins small? Whatever you're doing you could invest the time into an ICO and make millions. Point I'm getting at is that very few people start a business solely for financial reasons, there's usually some level of passion involved.
Secondly, why exactly would a high tax rate stop you expanding completely? You'll still be earning money, just less than before. And as the other commenter pointed out, someone else will step in if you don't, which could threaten your business.
You really think that the average small business person working from themselves are doing it out of "passion" rather than that's their best alternative? Many small business owners work as much as possible to avoid having to pay someone else, hardly ever take vacations, and if given the choice, I'm sure would rather work in a nice comfortable white collar job if they could make the same amount of money.
https://theoutline.com/post/2303/megan-mcardle-has-a-lot-of-...
However, to answer some of these points:
1) With respect to healthcare, investopedia has different numbers than the ones she cites: https://www.investopedia.com/articles/personal-finance/08061...
Some of the savings we posit from healthcare can be used to pay for other programs.
2) Eliminate Imperialism - Save > $1T dollars by not fighting wars based on lies. The Pentagon's budget was recently raised by about the amount a version of free college education would cost.
3) Tax the (Natural Person) Rich - Take their giant chunk of change and use it to buy more stuff, like infrastructure
4) Eliminate the Rentier Class - Housing is suddenly cheap and ordinary people have much more pocket change. Who will be incentivized to build housing then? Well, your representatives of course.
5) Tax the Tax Evaders - Apple, Google, and all the rest that use tricks to hide billions overseas (or have it parked here after the tax bill).
There's lots of money to find, just look under the couch.
That's an ad-hominem attack that has nothing to do with the substance of this discussion. How about sticking to the actual numbers?
> 1) With respect to healthcare, investopedia has different numbers than the ones she cites
Let's assume the investopedia numbers are right (though it's not clear why their uncited administrative costs number is more authoritative than an OECD report on administrative costs). They claim 5% of GDP in administrative costs (25% of 20%). The drug numbers they mention as being "saveable" are $11.6 billion per year; that's .0006% of GDP. No other numbers are cited for drugs there. For defensive medicine, .03% of GDP. For the other items, no numbers are given.
So we could potentially spend about 5% of GDP less on healthcare; the other bits all look like rounding error on that. I used $19.39 trillion for the current annual US GDP, fwiw.
And just to be clear, the actual US federal government spending on healthcare is about $1 trillion a year, or maybe 5-6% of GDP, as far as I can tell. The remaining 14-15% of GDP is spent outside the federal budget already. If we're trying to put it in the federal budget that means raising taxes by 9% of GDP or so.
> Eliminate Imperialism - Save > $1T dollars by not fighting wars based on lies.
This would definitely be nice, but that doesn't seem to be what most people propose. Again, the context is people proposing "just tax the 1%".
> Tax the (Natural Person) Rich
Right, this is the thing under discussion: taxing "the 1%". The total income of the top 1% is something around 20% of total personal income according to https://www.epi.org/blog/top-1-percent-receive-record-high-s... and total personal income is around $16.5 trillion according to https://www.statista.com/statistics/216756/us-personal-incom...
So if we taxed away every single penny "the 1%" earn, that gives us 16% of GDP. That's assuming that there are no disincentive effects, emigration, etc, etc. Probably a bad assumption.
> Eliminate the Rentier Class
I'm not sure what your actual proposal is here, but at this point I suspect we're way outside the realm of the politically feasible or desirable. That said, can you quantify this, please?
> Tax the Tax Evaders
I would be very much behind this idea. Again, this is not the same as "just tax the 1%".
Anyway, last I checked US government spending (including all levels of government) was about 37% of GDP. If we add the very optimistic 16% we can get by taxing "the 1%" we get to 53%. That's still less than France or Finland or Denmark spend. Yes, we could nationalize healthcare if we did that, fairly easily. We couldn't do all the other things people want to do by "taxing the 1%".
I agree that if we radically restructured everything about how the government is funded and what we spend money on then there are a lot more options. But, again, what people tend to propose is "just tax the 1% and use that money for X, Y, and Z". And there's not enough money in that bucket to do all those things.
If anything inflation only makes matters worse for people who weren't careful enough to save and invest in assets(like land) early on in their life.
Of course. That's no excuse to snarf your coffee instead of putting nose to the grindstone and doing the work. Agitate, educate, organize!
People are selfish and greedy. They always have been. They always will be.
Any solution to a problem that relies on building "a new kind of social momentum" are ignorant at best and actively harmful at worst.
Parent comment is right.
People are selfish and greedy:
Subprime mortgage crisis
Enron
George Soros shorting the British pound
The entire Mongolian expansion and their culture of rape and pillaging
* Small time Nazi officers stealing Jewish people's wedding rings
* Too big to fail
* Literally any employment contract where people are laid less than market value.
* Thieves exist.
* Murderers exist
* Corruption exists
* Swindlers exist
I guess that acknowledging human nature is edgy now. Well, fuck it. I must be edgy then.
Humans aren't all bad or all good. It's a spectrum of traits and behaviours, and they absolutely can be altered and conditioned.
Don't sneer. Do the hard work to make necessary things happen.
This will become more and more apparent in the coming years and I do believe it will be at the center of all conflict and political discourse going forward.
Nihilistic minds will lead us down a path that depletes the healthy parts of the system(s) upon which such people rely too heavily. And these aforementioned parasitic systems are not good at generating wealth nor are they historically efficient at generating innovation or new, stronger systems.
There might not be a revolution, but there will be a subverting downward spiral that will end with a wake up call. One can only hope and try to convince & convert others to put on the brakes long and hard enough for us to develop immunities and fixes.
The current administration was elected with fewer votes than the leading opponent, so it certainly reflects a subset of voters and the politicians comprising the administration, but hardly is a basis for concluding that voters in general have zero interest in issues simply because the administration evidently does not.
In some ways, perhaps, but not when the question is whether the actions of the person elected can, based on the election results, be taken as proof that the voters collectively have zero concern for an issue.
> the electoral college is skewed so that voters in states with lower population have more power so each vote is not equal.
True.
> This effect carries over to the Senate
No, it's a carryover from the Senate: electoral college representation is identical by state to Congressional representation in both houses combined.
Overall, which one of the following best describes how well you are managing financially these days?
I might call it blind optimism seeing as pg 21 of the same PDF shows the sources they would consider to fund an emergency expense, but not spin.
In the US especially, but nearly everywhere, there are hoards of people trying to lower or eliminate social services, basic science research, etc, with the dog-whistle claim that those things are not necessary and should not be provided by the state or using state funds. This line of thinking is extremely common in conservative circles, where they claim that societal prosperity would come from hurting the poor as much as possible in order to extract the greatest amount of wealth from them.
But when you look at statistics like these, it is clear that there is no more wealth to be extracted from the lower classes - they are all just merely trying to survive. Provide UBI or something like it, along with all other things necessary for a strong social net, and watch the rich get even richer while the poor grow into a stronger middle class.
It is especially confusing that this outcome seems to be hated by the rich, despite it certainly lifting their wealth. It makes me wonder if much of conservative policy is just as much about hating the poor as it is helping the rich - because conservative policies that hurt the poor are increasingly obviously hurting the rich. I just don't understand why it isn't taken for granted that we need a stable society to make more money over time. That seems clear to me.
Many of those in poverty today are there because of the systematic oppression of the poor across America for the last many hundreds of years. Blaming them for it isn't going to help - they aren't even being provided basic education, as that is also being cut in many places in the USA (so how do you expect them to become financially aware, anyway, if they are not taught that growing up in school? Parents raising children in poverty are in no place to teach their own kids financial management skills).
To lift people out of poverty we must change our attitudes towards class and capitalism and be more compassionate to create a more stable society.
A long-term stable society, with a controlled income and wealth gap, seems to be in the general long-term best interests of everybody, rich and poor alike.
It’s reasonable to debate the precise methods through which that is achieved, but I’m not as sure that many people would object to the underlying goal.
It seems to me that the conviction in which conservatives believe in this particular principal depends on what they'll get out of the situation.
To me it just seems fair to help those who through no fault of their own have been born into poverty. A "level playing field" just helps those who are miles ahead to begin with.
If you haven't seen it, you might want to watch this video [1] on a "race" - see how level the field actually is.
[1] https://www.youtube.com/watch?v=4K5fbQ1-zps
Conservatives talk about poor people as if it's a permanent attribute that can't be changed like "race". Poor is a tangible attribute. The programs which you fear so much are there to help people change that attribute.
But I get the feeling that many of the so-called conservatives use poor as a euphemism for undesirable people they don't want to see get ahead or mingle with. Why else would you refuse a helping hand to someone in need?
One reason I stopped believing is because of all the hypocrisy I'd hear. Go to church on Sunday, leaders of the church officially deny supporting a political agenda, then they go about instituting anti-gay propaganda and fighting against legalizing marriage, or legalizing medical marijuana. Heck the LDS church is trying to ban the ability to record someone (like a Bishop) without them knowing, because they're afraid of the backlash they themselves might have (and so far are having with recent events).
Yet, I still admire Jesus and what he taught... the sad thing is.. there's no Jesus in most of America or they'd be fighting to cure the sick and the poor, they'd want universal healthcare and guaranteed basic income. Even Jesus forgave the Harlot and welcomed her at his table, so why not forgive the drug addict and give them a home regardless?
I say make GBI require you spend it on rent/mortgage -- to receive it you can't be homeless - you must have a physical address and only one check per address + x amount per person living in house, --maybe 2k per house/apartment, 500 per adult/child extra living therein.
This even helps the economy as poor people are most likely to spend the money locally instead of squirrel it away in a trust fund or investment.
If I had GBI, I'd quit my day job and finally launch a side-business or go freelance full-time, but I work 60 hours a week on salary for 80k as a developer because I have to pay the bills and my wife stays home with the kids. I could really use that money personally to just float by when freelance dries up, or my side project fails, and I start building the next one.
I posit that this is not true in the least; they just get upset at the idea of a policy that isn't targeted at giving them the upper hand. Otherwise, they're perfectly fine with policies that favor one group (them) over another.
Given its size, the HN audience's ideology should fit a normal distribution just like the rest of society, but adjusted for the fact that it selects for people who work in tech. A "silent conservative majority" is unlikely on that basis.
Even if not intentional, it's a question of financial buffers. The extremely wealthy can weather recession and do even better by buying distressed assets from any who don't have the buffer which they hold. It's not the absolute numbers of the wealth, it's the amount of growth in control of assets that matter in this model. Without the right public policy, the wealthy win on the backs of the poor on the downswing and upswing of the broad economy.
https://en.wikipedia.org/wiki/The_Shock_Doctrine
I wonder what happens when we swing into recession and there is nothing left to take.
Using tax leins to steal real estate:
https://live.washingtonpost.com/tax-lien-investigation.html
Bail fees convert civilians into prisoner-slaves:
https://brooklynbailfund.org/our-results/
Problem is that most US population is not educated/smart and easy to manipulate into crazy consumption. UBI will not fix it, it will make it worse. Even putting more money into education is not really a clear solution.
You need to understand that middle class is gone. Beside 2-5% of highly specialised STEM workers everyone else job is already subsidized.
Problem is that most US population is not educated/smart and easy to manipulate into crazy consumption - conspicuous consumption: a fault that can be levied far wider than just the US. The US has a well documented and understood education system and their unis are respected across the world.
You need to understand that middle class is gone. - Wot?
2-5% of highly specialised STEM workers everyone else job is already subsidized. - On the face of it, an economy cannot function like that. Are you saying that the 2-5% are subsidising the other 95-98%?
(You write in English extremely well but you quite consistently miss the indef/def. articles out. For example: the US is an incredible ... an iPhone ... the yearly ... The problem is ... most of the US population ... the middle class)
There is 70 millions of iPhone sold in last 4 years in US. If you include other high-end phones it makes teenager/adults to carry half the year of work in Pakistan and year of work in Madagascar.
https://www.statista.com/statistics/242269/apple-iphone-in-t...
> The US has a well documented and understood education system and their unis are respected across the world.
It is highly specialized and makes most US educated people clueless outside their niche.
> Are you saying that the 2-5% are subsidising the other 95-98%?
Yes. Most non-technology work is now cost centre.
If you include other high-end phones it makes teenager/adults to carry half the year of work in Pakistan and year of work in Madagascar.
You are a bot and I claim my five quid.
For example, there are over 300M (300,000,000) people in the US. To provide $1000 per year would require $300B. But that's less than $100/month. If you're homeless, that might be enough that you don't starve. But it's not enough that you can go to a doctor and eat. It's sure not enough that you can pay rent so you can get off the street.
If you make it $1000/month, now it's enough money to actually help people. But it also costs $3 trillion a year. That's twice the current Federal budget. So either taxes have to be three times as high, or they have to be twice as high while we eliminate every other thing that the Federal government currently does.
I don't think raising taxes to that level is possible, politically.
The usual answer to this objection is that the government can simply print money. Yes, they can. So could Venezuela's, but that didn't work out very well...
I think the solution is going to have to come from a change in society, not from a change in government programs. I think the rich are more often blissfully ignorant than they are evil oppressors. Things may start to change when the rich actually know some poor people, and can see the way society's structure looks through their eyes - when they can feel the pain it causes to people that they know.
The 2015 Federal Budget (I guess the last time we actually had and official one) was about $3.8 trillion dollars. The budget President Obama submitted on 2016 for fiscal year 2017 was about $4.2 trillion.
Still, $3T more would be a pretty large increase. And there's exactly zero chance that a corresponding $3T would be cut somewhere else...
The goal is not to maximize wealth, but to maximize power over others. Insecurity in the working class does not increase the maximum extractable wealth for the capitalists, but it does increase the power that the capitalists can exert over the working classes because security creates the practical freedom to not knuckle under.
Opponents of capitalism (on the Left, at any rate) see it, yes, as progress over feudalism, but just not the end of such progress.
Or as Adam Smith put it: "All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
https://www.quora.com/What-did-Adam-Smith-mean-when-he-said-...
I figured Trump would go down in history as a modern money baron president, the likes of Coolidge, Harding and Hoover.
Take a very simple example, the BMV. We've had good internet now for a couple decades and you still can't do basic transactions without going to the BMV in the middle of the day.
Almost all other government agencies have been entirely immune to technological change as well. They are, jobs programs.
Again, I have to say I really hate how my previous comment sounded. There's just a lot to this and I didn't want to try and defend the very idea while arguing about government reform because it would have been an uphill battle. Sorry for how rude that sounded.
The basic idea, though, is that NASA (while awesome) has been building a heavy lift but also disposable and expensive new rocket. There are a lot of traditional contractors (Boeing, Lockheed Martin, ATK) across the country helping to build the rocket. This means jobs. So congress supports the program, despite its cost, because it means jobs. This stifles innovation as evidenced by what SpaceX has been able to do on a fraction of the budget. This branches and goes deeper with organizations like the ULA which charges several times that of SpaceX but has failed, completely, to innovate. Anyways by the time NASA's new rocket will be ready SpaceX will be have been launching Falcon Heavy for years and possibly even launching the BFR. This means SpaceX will have more powerful, more reliable, reusable, cheaper rockets. All this time NASA has been unable to innovate because ??? and now the entire SLS is nothing more than a jobs program.
Thats Congress being dumb. NASA may have become a jobs program, but it isnt supposed to be, and Musk is a response to that, in my mind.
"A surprise billion dollars may sound good. But while adding money to “Space Operations,” the Appropriations Committee also cut $660 million from NASA’s science, aeronautics, and space technology programs that build the telescopes, observatories, planes, and landers that make the agency so beloved. In justifying this decision, the committee wrote that the rocket “is the nation’s launch vehicle that will enable humans to explore space beyond current capabilities.”"
https://www.bls.gov/cpi/
All of these are commodities. And every single product derived is based on commodity. Most commodities can be traded on commodity markets.
https://www.bls.gov/charts/consumer-price-index/consumer-pri...
https://www.bls.gov/cpi/quality-adjustment/home.htm
1: https://www.statista.com/statistics/184955/us-national-healt...
Source: https://www.thebalance.com/causes-of-rising-healthcare-costs...
It's still pretty terrible it a) got to that point b) is still at this point.
Furthermore, even the statistic that 40% of people can't cover a $400 expense is lowballing the severity of the situation, because who says that $400 is anywhere near the average financial cost of an unexpected emergency? What percentage of Americans can't cover a $500 expense (we know it's more than 40%)? What about a $1,000 emergency expense (which in my estimation is closer to the median deductible for a health insurance policy (assuming that one has health insurance in the first place))?
I don't think 40% is some magic number to begin hysteria. Neither is $400. Selling something to cover your expenses might be a blessing in disguise if the thing you sell is a liability in the first place (ex: a car you cant really afford).
My observation of America is that for a whole lot of people we F'd up a long time ago... These people need financial education, they need to be taught to not buy things they dont need, they need to be taught delayed gratification and to not be consumerists.
This might be a bad state of affairs to be in, but before we go trying to change people we need to change the system. Else we will be looking at Hitler as a moderate who had some reasonable national policies.
In that specific case, no. In the US today, a car is damn near mandatory. Otherwise you'll be spending hours commuting on a bus, and that's if you're lucky enough to be somewhere with decent bus service. And that's assuming you have the type of job schedule where you can have that kind of time.
Many times, not being able to keep your car, even if it's expensive in maintenance costs, means you could lose your job.
Except the American economy essentially banks on this fact, so you'd actually likely do more harm than good if people decided not to spend so much
If you are poor, it's much harder to take risks and try to get ahead. You are always on the hook for your rent and can't just go ask your parent for a 0% interest loan to help you out for a couple months.
Yes, a lot of Americans have bad financial habits and buy unnecessary things. But some of these people with little savings are doing everything they can to stay afloat and just don't have the luxury of doing an 8 week data science boot camp to get a better job (or they would miss rent and get evicted).
I didnt say the individuals are the source of the issue. I'm saying as a society we screwed up by more or less creating this issue. Things like a lack of financial (and other) education, or failing to teach adequate data science in high school etc.
You have two apples, you eat one. How many apples remain?
The part about delayed gratification is pure psychology. And its just personal training.
I'm not from the US, I am Indian, these problems are universal. Most people can't handle freedom, that is all there is to it.
Is that true? What happens when those 25% retire or can no longer work? Ahh: https://www.telegraph.co.uk/finance/personalfinance/pensions... - not too bad - the US got a C, UK got a C+.
Now back to the headline: $400 in available readies? You do have to start measuring somewhere when looking into poverty but it is harder than it seems on the face of it. Many people will drain their balance regardless to zero or below, (nearly) no matter how well off. I recall being a youngish lad with an income of £30 per hour - let's realistically say ~£50,000 per annum (gross, pre IR45). At that point in my life, I too would often qualify for "can't find £350" right now. My real point is that you have to be really careful how you measure this sort of thing, ie trying to quantify bits of people's lives with simple pithy statements.
They eat cat food on their meager social security payments.
Now, I’m sure some seniors do this, but I suspect it’s due mental issues rather than fiscal concerns. Is cat food even cheaper than really cheap canned food?
Anecdote here, but I knew two competent, capable seniors (each on Social Security) who in fact ate canned pet food because it was a source of meat that they otherwise couldn't afford. I doubt I knew the only two people in America who do that.
http://www.wboc.com/story/23662934/some-seniors-in-kent-coun...
"Mr. Speaker, it was reported to me that there are seniors in my district who eat dog food when their food stamps run out,” she said. “I was appalled and went to see for myself, and I was dumbfounded."
https://www.cnsnews.com/news/article/congresswoman-some-my-c...
>I’m sure some seniors do this, but I suspect it’s due mental issues
"A woman in her 80's was eating dog food until a neighbor took her to a food pantry."
https://www.nytimes.com/1993/11/16/nyregion/fear-of-hunger-s...
Poor people don’t have retirement money. They live off their Social Security checks. It’s that simple.
The bigger problem is American’s terrible spending habits not lack of real income.
https://www.google.com/amp/s/www.marketwatch.com/amp/story/g...
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
If someone is spending more on food, clothing, electronics as their income rise those things are clearly discretionary.
As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
It's also not discretionary if at lower income levels they receive a greater share of direct food aid that isn't counted in their spending because they never exchange money or a money-denominated voucher for it.
> As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.
Many of the poor:
(1) Aren't able to find work (and may not be able to work; permanent disability is a thing, and positively correlated with poverty),
(2) May not work find full time work when they work, and
(3) May be supporting non-working (and unable for age or other reasons to work) dependents on their part-time, intermittent, minimum wage income.
[0] http://www.ibtimes.com/us-spends-less-food-any-other-country... [1] http://www.trivisonno.com/food-stamps-charts
Maybe terrible spending habits cause no lack of real income, and if everybody became responsible the economy would tank.
> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.
I gave up smoking a couple of months ago after 30 odd years - I now feel rather stupid, given how clever I really am. I have never been a gambler but the parallels are very clear to me and I have a couple of friends who are gamblers and display the same stupidity. I keep my gob shut.
I do not agree with the definition of necessity implied above. Gambling and drug taking (smoking int al) are not basic requirements for life. Eating is. Eating at McDs is simply buying calories and possibly a few other basic life sustaining requirements and consuming the same. McDs may not provide you with all the nutritional requirements for a healthy life but you will get a lot of calories in. Until embarrassingly recently, the sole stated purpose of eating was calories. Brits are still not known as Limeys for nothing.
Fags and bandits can go and *////~~~~ bbbbzzzzt OFF!!!!
> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.
In other words, the whole study is complete nonsense because those definitions are ridiculous and completely detached from any sensible definition of those words.
How does that dispute the article at all?
so the average american doesn't have $400 saved up, _and_ spends $206 per year on lotto tickets.
if we're in society collapsing danger, maybe we could look at the organizations running the lottos?
https://journalistsresource.org/studies/economics/personal-f...
https://mobile.nytimes.com/2018/05/14/us/politics/supreme-co...
It’s not clear at all that the federal government could ban the lottery without a constitutional change.
The court found the law unconstitutional on procedural grounds. In particular, the federal government did not ban gambling. It required states to ban gambling. The court ruled that the federal government cannot force states to pass laws.
I'm not entirely clear about the legal implications, though. It's unclear if the majority would also overturn a direct ban, but obviously this case would not form precedent.
the states operate the lotteries themselves. they could just stop doing so.
The poverty rate in the US is about 13% [1]; we would expect those people to not have any savings. That leaves about 33% unaccounted for. It looks like 42% of workers in the US make less than $15/hr [2], which does fit the figure fairly close. However, some of those are teenagers, so they don't count as they aren't living on their own.
I'd like to see some analysis of spending. How many people don't have any savings because they aren't spending wisely. This girl [3] discovered that she could actually save for a deposit for a house in London, despite making under £40k (about $53k). That's less than the median US income and presumably doesn't go all that for in London. She was simply spending a lot of money on food, drinks, and specialty coffee.
[1] https://poverty.ucdavis.edu/faq/what-current-poverty-rate-un...
[2] http://fortune.com/2015/04/13/who-makes-15-per-hour/
[3] https://www.theguardian.com/money/2018/jan/29/can-you-really...
I think it's a significant assumption to make that parents would be able/willing to cover a random $400 expense. The study did not specify a specific type of emergency expenditure, just that it was unexpected. I can fully imagine a scenario where parents would cover hospital visits for a bad case of the flu, but not cover an abortion, or repairs to a car from an accident where the child was at fault.
The latter two examples still seem like fair 'unexpected expenses' for the child dependent making < $15/hour
[1] Unless rape is involved, but that isn't the normal case. (Abortions because rape are 1%, according to http://www.johnstonsarchive.net/policy/abortion/abreasons.ht.... Disclaimer: I scanned the link for figures, I didn't try to figure out if it is pro- or anti- abortion.)
> the fact is that a living human is killed in an abortion.
This is absolutely the talking point of somebody pushing an agenda and represnting it here as a simple “fact” is specious at best.
Not debating this fact, however cost of living makes a huge difference. 2x the median income doesn't mean much if everyone lives in big cities where the cost of living is 2x the median also. I feel like this is a point that has been ignored in this thread by a lot of people.
Also one note on one of your sources: the guardian article mentions she's living in an ex-council house with a flatmate. I've lived in an ex-council flat before in London, and honestly it is not for everyone. There was zero insulation so even with the heating on full, winter was unbearable. Constant electrical problems. Decent chance of getting mugged while taking out the trash. Mould in various places that never got dealt with. I know all ex-council flats aren't like this, but are we entirely comfortable with saying that above-average earning professionals in metropolitan cities should have to live with flatmates, often strangers, for up to ten years, often in increasingly poor conditions, while significantly cutting back on their quality of life, to be able to possibly afford a small flat likely an hour away from where they will work? It's easy to tell people to cut back on going to the pub or eating out, it's much harder to do when you're living in a mouldy shoebox and need an occasional break from misery, especially when you have friends that will still go out without you and adverts telling you to buy avocado on toast everywhere you go.
We've systematically gutted social services for the poor while giving tax breaks and subsidies to the rich, then we blame the poor for buying consumer goods (which we market to them and need them to buy) instead of saving their income.
That kind of sums it up right there. Most wealthy people in this country didn't become wealthy because they were able to save money while working for $15/hr.
You can't save your way out of poverty, the poor don't want your sympathy, they want dignity. They want a living wage, a pension, and healthcare. We can afford to give it to them, we're just too focused on making more billionaires.
Be careful about concluding that these people are poor. I'm not poor, and I have no cash. Everything is invested. Piling up cash in a savings account just means it'll get eaten away by inflation.
This is hardly uncommon. If you've got a house with a large payment, you aren't poor, even though you may not have any cash. Your money is invested in the house.
It's like that daft statistic a few years back that 40% of corporations don't pay any income tax. This raised all sorts of righteous hysteria. Never mind that 40% of corporations lost money that year, and income taxes are not due when you lose money.
I think I know what it's saying (probably because I have a lot of experience with the type of people I'm imagining) and you guys think you know it's saying something else (because of your own experiences having money that's inaccessible), but, ultimately, the question is too imprecise for either of our claims.
So, yes, I strongly suspect I'm right -- "selling something" is pretty plainly not referring to financial instruments -- but it's true that it's more intuition than fact.
Having said that, it is still problematic that %40 of the population answers no to this; and I suspect that in most cases it is actually the case that they simply do not have the wealth. In fact, I think the phrasing in this article is far less problematic than the "in savings" phrasing one often sees.
Further, I would go so far as to say that people, who have wealth but cannot cover an unexpected $400 expanse are genuinely victims of poor financial planning. If you are in that position, open a line of credit. Most credit cards will give you at least 1 month of 0% interest; and if you have equity in your house you should be able to use that to secure another low interest line of credit if you need to. Sure, you don't want to rely on either of these for day to day expenses, but they are a fine solution to solve the liquidity problem of emergencies.
EDIT: I suppose my solution may fall under the catagory of "borrowing" which the article says is how the quoted %40 would cover such an expense. I read that line as talking about borrowing from friends/family.
This is a self-induced injury. Financial education should be mandatory, and started in elementary school.
You may want to rethink that.