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Why America's economy is soaring ahead of its rivals

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Re: Why America's economy is soaring ahead of its rivals

#381

Post by TrapLord_Rhodo »

buckle8017 wrote: post #356
spaceguillotine wrote: post #350

I've never known more homeless people before in my life in America, seems like its only the rich getting richer and the poor getting poorer and less healthy.

The homeless is just more visible than it used to be. https://www.statista.com/statistics/555795/estimated-number-...

the chart shows an absolute surge? Are you we looking at the same chart? also, if we are thinking from first principles here... there's no way to actually count that... Maybe you can give a sample area, and go around counting that specific area? and just do that for every major city? still pretty shaky data at best... so in this case i think anecdotal evidence is better evidence. There is obviously WAY, WAY, WAY more homeless, and they are WAY, WAY, WAY more cracked out.

Re: Why America's economy is soaring ahead of its rivals

#382

Post by mullingitover »

luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

> But is the majority of the population thriving?

It's important to understand that the stock market is a leading indicator.

Everyone doesn't immediately get laid off when the stock market tanks. Everyone doesn't immediately get a raise when the stock market is roaring.

A lot of people are just now experiencing the stock market mini-crash of 2022, when the pandemic helicopter money dried up. In two years a lot of people are going to be experiencing the investments that are being made in the market right now. Most of them are going to wrongly ascribe those good times to the person holding high political office even though that person had nothing to do with it. This won't be the first time it has happened.

Re: Why America's economy is soaring ahead of its rivals

#383

Post by toephu2 »

amrocha wrote: post #157
naming_the_user wrote: post #148

Earlier quoted context omitted.

This feels like a huge generalization to me. The US, UK, EU and realistically most developed countries I would say have fairly similar quality of life within margin of error. I've travelled a fair amount and everywhere is basically the same. For an individual it's really going to come down to lifestyle and what you prefer. Some people like urban living and walkability, if that's you then you probably want Japan or ol…

[flagged]

I don't think you know what dictatorship means. Anyone living in a real dictatorship would be offended by your comment.

Re: Why America's economy is soaring ahead of its rivals

#384

Post by nradov »

roenxi wrote: post #14

This is an interesting take, because it contrasts with GDP PPP [0] which is suggesting that America is in fact being overtaken by its rivals although it has managed to outpace the EU. China is claiming to already be ahead and India is well on track to gain absolute economic ascendancy relative to the US. And I expect that Asia is going to start developing some serious military muscle on the back of that because they…

There has certainly been huge GDP growth in China but their specific claims about GDP can't be attempted to be believed. Their numbers have never been independently verified and most of the raw data is treated as a state secret. There is reason to suspect that some of what they're reporting is just made up. Party officials are evaluated based on meeting certain economic targets so there's a lot of incentive at the lower levels to falsify data. The same thing happened in the USSR before it collapsed (I'm not suggesting that China will collapse any time soon, just pointing out that this is a common pattern in single-party authoritarian governments). External estimates based on resource utilization indicate that real GDP might be significantly lower.

Re: Why America's economy is soaring ahead of its rivals

#385

Post by zeroc8 »

HellDunkel wrote: post #263

When younger, i often thought about moving to the US because it offered so many amazing and creative places to work. Most of these places seem to have gone completely or are in a somewhat unhealthy state (hollywood, video games). Boring tech companies took over and often times they stared with just a website - for gods sake- this is so lame! I‘m so happy i didnt go back then- I think it would have depressed me to exp…

Same here, I've even lived in the States for a while. For me, Europe is the place to be. While we might not have as many opportunities as our counterparts in the States, life is generally pretty great over here for the average Joe. They have more money, but we have more free time for ourselves. Since life is short, time is more valuable. At least for me.

Re: Why America's economy is soaring ahead of its rivals

#386

Post by jandrewrogers »

luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck.

There is another 25-30% of households that spend all of their income on ordinary expenses beyond necessary expenses. This includes things like car payments on a new BMW or a mortgage on a big house; "ordinary" is determined by expense category, not expense necessity, so a lot of spending on luxury goods is classified as "ordinary". By implication, there is effectively no ceiling to ordinary expenses.

By contrast, the median US household has >$12,000/year in excess income after all ordinary expenses. Technically these households could have expanded their lifestyle to consume that income, but in many cases they are spending it on things that are not classified as "ordinary" and therefore not saving it. The categories of "non-ordinary" expenses (which have a sensible objective criteria) are almost entirely obvious lifestyle flex things, so not particularly controversial.

The implications of these statistics are pretty wild. The median household can easily accumulate a million dollars in inflation-adjusted net worth, not including their house, over a 40 year career. And they can do it without being particularly thrifty, since ordinary expenses covers a lot of luxury spending.

Americans have very high incomes, both in theory and practice, they just would rather spend it than save it.

Re: Why America's economy is soaring ahead of its rivals

#387

Post by bbqfog »

sangnoir wrote: post #291
luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

> But is the majority of the population thriving? Looking at the numbers: low unemployment, strong consumer spending, average income increasing at a rate higher than inflation, I'd say the majority is doing better than most years. They might not feel that way though, and we've been in a continuous vibes-cession since COVID.

Looking at the numbers the interest rate is almost 7% making most things very unaffordable for people who can't buy things like houses and cars with cash. Until that number dramatically goes down, regular people will suffer.

Re: Why America's economy is soaring ahead of its rivals

#388

Post by nradov »

lern_too_spel wrote: post #240
nradov wrote: post #222

Earlier quoted context omitted.

How is that a "problem"? What is preventing other countries from building tech winners? The USA isn't launching missiles to destroy the next foreign Nvidia or Meta competitor.

You could just as well ask what is preventing every other state in the US from building tech winners.

What is preventing every other state in the US from building tech winners? The majority of large tech companies are headquartered in CA and there are a few others in WA, TX, NY, and ID. There used to be quite a few in MA and even FL was in the running for a while. What caused them to fall behind within a few decades, while other states never really got started? Some are hopelessly handicapped by horrible geography or low population density but others like CT or IL would appear to have all the necessary ingredients.

Re: Why America's economy is soaring ahead of its rivals

#389

Post by Nevermark »

boringg wrote: post #279
nightski wrote: post #269

Earlier quoted context omitted.

We need to differentiate living paycheck to paycheck out of necessity vs. choice. It might be surprising but there are a lot of people who choose to do so because why save when you could die tomorrow.

Or they get caught up living a lifestyle that they feel like they need to give the appearance of success!

This is an under appreciated problem with inequality.

Ideally, others success should be net-positive/neutral for others.

In practice, inequality has these perverse impacts at least:

(Wealth is a spectrum. “Rich” and “non-rich” below stand in for any significant relative difference.)

1. The non-rich often put unrealistic pressure on themselves to keep up with wealthier lifestyles.

But beyond that self-inflicted wound:

2. The rich can afford outsized amounts of critical or survival type services and assets. Like land. Fresh vegetables. This imbalance raises the cost of meeting basic needs.

3. Markets respond to more rich by creating higher end services and products. Some have subjective value (fashion), some are luxuries (massages are beneficial, but not critical for most), but many are practical.

For instance, computing hardware, internet access options, expensive healthcare interventions, medications, private transport growth relative to public transport, etc.

4. And the rich also perversely put unrealistic social and employer pressures on the lifestyles of the non-rich. I.e. dress and personal technology shibboleths, etc.

—-

It is worth pointing out that the large role of real estate as a passive wealth compounder, tracking up with the product of increased overall economy and inequality growth, is perverse enough.

But the common arrangement of property taxes that tax both land (the limited and exclusionary asset) and its development (the non-exclusionary asset we should not be disincentivizing in any way), adds another perversity to land economics.

When a problem compounds already, it doesn’t need any more perverse incentives!

If property taxes were replaced by just land taxes (renormalized to be revenue neutral) it would:

1. increase the return on development, and

2. increase the costs of holding (absolutely or relatively) undeveloped land!

Which would both increase development (i.e. housing, multi-housing) and increase supply of (relatively) unused land.

This would be a net win for those who are impacted or concerned about inequality, but also those with a libertarian or capitalist viewpoint. As it removes a wealth tax. (Which isn’t just a double tax, but an unlimited repetitive tax on the same already taxed/unrealized non-exclusionary wealth!)

Whether rich or poor, improving one’s property with already taxed capital or self-supplied labor, would not perversely raise one’s taxes.

Re: Why America's economy is soaring ahead of its rivals

#390

Post by bbqfog »

lolinder wrote: post #333
sangnoir wrote: post #291

Earlier quoted context omitted.

> But is the majority of the population thriving? Looking at the numbers: low unemployment, strong consumer spending, average income increasing at a rate higher than inflation, I'd say the majority is doing better than most years. They might not feel that way though, and we've been in a continuous vibes-cession since COVID.

HN in particular has a deflated view of the economy because our sector was going through such a big bubble from 2014 on, which got even bigger for a brief window around the pandemic. We in particular had a long way to fall back to reality, so our personal economic outlook is worse than it's been for a while, even if the rest of the economy is looking up.

The interest rate is hurting everyone who can't buy houses with cash. High interest rates have also helped crash the real estate market, so even if you just own a home, you've taken a bath since the high interest policy has been implemented.
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