Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Economic Inequality: It’s Far Worse Than You Think

scientificamerican.com

Post reply on HN
Print view View original

171–180 of 184 posts

Re: Economic Inequality: It’s Far Worse Than You Think

#171

Post by fullwedgewhale »

NoMoreNicksLeft wrote: post #125
fullwedgewhale wrote: post #11

The point of the article is that the meritocratic system in this country is broken. In part this is because we have systematically transferred wealth out of the bottom to the top. For example, focusing on tax cuts that benefit high income individuals while cutting support for public colleges. These two things are usually done at different times with tax cuts usually to stimulate the economy and spending cuts coming t…

It's unclear that the mechanism you describe behaves as you claim. Supposing that it's true that a college degree confers (typically, on average, whatever) an extra million over a lifetime career, what would happen if everyone did attend college? Would that effect remain? If college educations become more common, they also become less scarce and valuable. You talk about how affordable it was in the 1960s, but this is…

Let's step back for a second and realize there's nothing magical about college. We can make the same arguments about the validity of a high school education. In fact, I can take your argument and say that providing everyone a high school education lowers every high school graduate's wages. We can then apply the same argument to middle school or any even providing any education at all. If we teach everyone to read and write, under your model, it devalues reading and writing. Because fundamentally, your model is one where there is a fixed pool of demand for educated people and beyond that any additional education add little additional value. And that is a completely wrong assumption.

The reason why education works is that it makes all parts of society function better. Having an educated population produces a higher functioning society. That's a society that, more often than not, is able to produce more wealth faster. In fact, it's in the enlightened self interest of society to have a broadly educated population. Basic research winds up driving GDP growth as science goes from the lab to products. Having more engineers and scientists is important, but so is having musicians, writers, nurses, and so on. All these types of education are important in a modern society. What's going on in the United States is that we are slowly short changing ourselves by making it harder and harder for people to get that additional education.

But in the process we're also creating a more stratified society. A lot of social mobility comes from the "first generation to go to college." By making college education less affordable, we keep people in the lower and lower middle classes that could have a transition up the income ladder from lower skilled, lower paying jobs to white collar professions. That's just one way we're becoming a society with little social mobility. American has moved away from the meritocratic American ideal. Now, even if you're an idiot, if you start out rich you'll probably stay rich. If you're poor, even if you're smart and capable, you'll probably stay poor.

Re: Economic Inequality: It’s Far Worse Than You Think

#172

Post by pluma »

sokoloff wrote: post #151
sirrocco wrote: post #148

Earlier quoted context omitted.

That's exactly what he said - it's a matter of luxury. Retiring at 30 is a luxury.

Extended far enough, so is not starving to death in utter squalor. One person's luxury is another person's normal. I view retirement as "normal" and it's just a question of when. 30, 40, or 50 - none of those would I define as luxury-due-to-age.

I think the mistake is the underlying assumption.

What does it mean to "retire"?

If you mean being able to live comfortably without having to work, I'm arguing (for some definitions of "comfort") that's where you should start in the first place.

If you mean having a house, money in the bank, paying for your hobbies and taking regular vacations overseas, then that's what I'm arguing is a luxury.

Sure, if you define "luxury" as something that goes beyond your goal in life (say, having a reliable amount of savings to afford your lifestyle), then retiring with a yacht at 30 may possibly not be something you'd consider a luxury. But that doesn't change what I said.

I don't view retirement (in any shape or form) as "normal", unless medically necessary. But I also don't conflate unemployment and poverty. So you may very well decide to stop working at 30 regardless of your savings and prior income -- assuming you're guaranteed access to all necessities by default.

As far as I'm concerned, the only reason you should ever end up in poverty is if you have extremely unreasonable spending habits (e.g. gambling), and even then it's most likely an indicator of an underlying psychological or social problem than "your own fault".

Re: Economic Inequality: It’s Far Worse Than You Think

#173

Post by sokoloff »

pluma wrote: post #172
sokoloff wrote: post #151

Earlier quoted context omitted.

Extended far enough, so is not starving to death in utter squalor. One person's luxury is another person's normal. I view retirement as "normal" and it's just a question of when. 30, 40, or 50 - none of those would I define as luxury-due-to-age.

I think the mistake is the underlying assumption. What does it mean to "retire"? If you mean being able to live comfortably without having to work, I'm arguing (for some definitions of "comfort") that's where you should start in the first place. If you mean having a house, money in the bank, paying for your hobbies and taking regular vacations overseas, then that's what I'm arguing is a luxury. Sure, if you define "l…

In today's world, absent social security or other income programs, $1MM in a post-tax account provides about $35K in income over a 60+ year projected period of non-work (aka "retirement").

This is about 75% of the median income for families of 4 and has to cover everything (including rent, unless you take some of the $1MM and buy a house, reducing your safe withdrawal rate accordingly).

That's a fairly spartan existence, IMO. Proponents of basic income systems (which are certainly appealing emotionally and viscerally) need to account for how to give every family the purchasing power of millionaires, forever. That seems economically a non-starter, regardless of whether or not I think it would be awesome to live in such a world where every precious hour of my labor could be devoted to improving my family's comfort and overall lot in life instead of more than half of it going to "run the family".

Re: Economic Inequality: It’s Far Worse Than You Think

#174

Post by sokoloff »

woobar wrote: post #170
sokoloff wrote: post #137

Earlier quoted context omitted.

There are more EVs sold with an after-credits price under $25K than over $50K. And there's an awful lot of people driving $25K new ICE cars, so I can't agree that the EV credit is mostly going to cars that are beyond the reach of average workers. (I also don't think that the average worker is financially well-advised to buy a new $25K car, but they're doing it in droves, so...)

But this is the point. Without the credit they will not be able to afford $32.5K car. And btw, average worker makes $35K, and pays federal tax up to $3200. So their "after credit" price would be close to $30K.

Fair point, though those average workers who can do math and plan ahead would lease the car, where NMAC (or the competitors' equivalent) would purchase the car and take the $7500 federal credit as a cap cost reduction and the lease payments would reflect the full value of that credit.

I would be in favor of a simplified tax code, even if it takes away the mortgage interest deduction (mine is partially phased out already), the EV credits, etc (and especially if it gets rid of ACA as my health care plan changed dramatically for the worse and by an amount far greater than historically normal rate increases).

Re: Economic Inequality: It’s Far Worse Than You Think

#175

Post by wdr1 »

fullwedgewhale wrote: post #11

The point of the article is that the meritocratic system in this country is broken. In part this is because we have systematically transferred wealth out of the bottom to the top. For example, focusing on tax cuts that benefit high income individuals while cutting support for public colleges. These two things are usually done at different times with tax cuts usually to stimulate the economy and spending cuts coming t…

> The point of the article is that the meritocratic system in this country is broken.

I think you're overreaching.

The article is pretty clear in its explanation on the difference between people's perception of inequality & reality.

That this is evidence the meritocratic system is broken is your conclusion, not the article's.

Re: Economic Inequality: It’s Far Worse Than You Think

#176

Post by sgift »

joeclark77 wrote: post #44

Nothing in the article explains why "economic inequality" is a bad thing. Which seems to be a logical pre-requisite to declaring it to be "worse than you think".

"Nothing in the article explains why it is a bad thing that x. Which seems to be a logical pre-requisite to declaring it to be 'worse than you think'"

It's quite simple: Some things you have to accept as a given, it's a shared social norm. No one will bother to write a paragraph why rape is bad each time an article about rape is written, no one will bother to write a paragraph why police brutality is bad each time an article about police brutality is written and no one will bother to explain why "economic inequality" (i.e. some people starve while others live in luxury) is bad. It would be cumbersome and tiring for most readers for the sake of a tiny minority to write articles in the style you seem to prefer.

Re: Economic Inequality: It’s Far Worse Than You Think

#177

Post by xyzzyz »

ryandrake wrote: post #85
fullwedgewhale wrote: post #11

The point of the article is that the meritocratic system in this country is broken. In part this is because we have systematically transferred wealth out of the bottom to the top. For example, focusing on tax cuts that benefit high income individuals while cutting support for public colleges. These two things are usually done at different times with tax cuts usually to stimulate the economy and spending cuts coming t…

I'd build on that to point out that the systematic transfer of wealth from the bottom to the top is not something that "we're doing", but simply the natural product of capitalism. It doesn't require an evil mustache twirler sitting in a dimly list room scheming about how he's going to systematically conduct a massive wealth transfer. Wealth transfer is the natural result of any system that rewards the deployment of c…

I'd build on that to point out that the systematic transfer of wealth from the bottom to the top is not something that "we're doing", but simply the natural product of capitalism. (...) Wealth transfer is the natural result of any system that rewards the deployment of capital with more capital.

That's true, as long as the rate of return on capital is bigger than the growth of economy. Otherwise, as the economy grows faster than capital brings the returns, capital owners own smaller and smaller part of overall wealth.

Unfortunately, throughout almost all known history, the rate of return on capital was greater than growth. The only exception was the brief period of the post-WW2 years.

Re: Economic Inequality: It’s Far Worse Than You Think

#178

Post by nap »

danans wrote: post #153
nap wrote: post #145

Earlier quoted context omitted.

Taxing is not morally justified BECAUSE it is a robbery. There is not failure taxing just because there is nothing to get from people who failed.

It seems like you think that redistribution == robbery. I'm curious what is your preferred solution for financing public infrastructure. All private? Every street and sewer line is a company's property? Even human societies like hunter gatherers redistributed food within their groups so some of them could concentrate on child rearing and basic tool making while others acquired food. Even if duties were shared, they c…

Forced redistribution == robbery. Donations and other voluntaries is okey.

> Every street and sewer line is a company's property?

Private infrastructure works good with Internet.

> Redistribution of surplus was a major contributing factor which led to the specialization

Redistribution != Exchanging. Market is okey because there are no forcing, everything is ultroneous.

Re: Economic Inequality: It’s Far Worse Than You Think

#179

Post by nap »

Frondo wrote: post #160
nap wrote: post #145

Earlier quoted context omitted.

Taxing is not morally justified BECAUSE it is a robbery. There is not failure taxing just because there is nothing to get from people who failed.

Taxation is not robbery. Taxation is a way to pay the bill of being a citizen of a place. Your confusion may arise from the following: In a robbery, someone takes something from you. With taxation, an organization takes something from you. The difference is, in a robbery, you get nothing back. With taxation, you are getting something from the government, so you're actually just paying for that.

> bill of being a citizen of a place.

I'm never sign for that.

> The difference is, in a robbery, you get nothing back.

If robber give you something back - it will not be a robbery?

> so you're actually just paying for that

I'm actually just paying for government spying me, for forcing me to not to having ownership of myself and other "government goods".

Re: Economic Inequality: It’s Far Worse Than You Think

#180

Post by nap »

Frondo wrote: post #161
nap wrote: post #149

Earlier quoted context omitted.

Is property rights completely at odds with living in a developed industrial nation? When you're threatening to force people to give up their property - it's a robbery.

Living in a developed industrial nation, with all the benefits that incurs, and not paying for it? That's freeloading. There's no moral standing in skipping out on the bill for something you're getting.

I'm paying medical, education, internet and other bills. It's okay. If I don't want paying I just shouldn't asking for this service. But with taxation I can't not pay for things that I don't want. I have to pay NSA for skying me. I have to pay police for not having ownership of myself (can't do drugs, can't commit suicide - I'm just property of the state, not myself).
Post reply on HN