9 ms·

>"More wealth than half the world's population" That's such a disingenuous statistic. A huge number of people, including a huge number of very well off people,

>"More wealth than half the world's population" That's such a disingenuous statistic. A huge number of people, including a huge number of very well off people, have a negative net worth due to debt. I don't have a car payment or a mortgage, so I have more wealth than at least 30% of America, over 100 million people, combined! It's disappointing to see that FiveThirtyEight has now become just another outfit twisting the truth for their political agenda. I expected better from them.

baddox 11y ago
Are we talking about net worth, or income? I thought we were talking about income initially.
- marcoperaza 11y ago
  I'm just talking about the statistics that GavinMcG was citing. We were talking about income inequality, but the sensationalist statistic he cited is not.
deleted 11y ago
[deleted]
GavinMcG 11y ago
It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course) not the whole story. But that's one narrow slice. On the scale of 80 people with billions upon billions vs. half of everyone else, it's hardly a disingenuous statistic.
- marcoperaza 11y ago
  The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.
  - GavinMcG 11y ago
    Well on the future earning potential front, the wealthier you are...
  - notahacker 11y ago
    On a global scale, this is nonsense. The number of people globally who have negligible net worth because they earn less than $10 per day vastly exceeds the number of people who have negligible net worth because they've only just started paying down the mortgage on their McMansion and still have student loan repayments remaining. The purchasing power of those 80 people isn't going to start looking insignificant if you change the basis for comparison to net wealth plus imputed future income streams.
    - marcoperaza 11y ago
      I disagree. If you take the 3 billion poorest people in the world and properly account for their future earnings, it will certainly exceed the combined expected wealth of these 80 billionaires. You couldn't have anything close to this sensationalist statistic. Also, global poverty is not the fault of Western riches. It's not something we (Westerners) can do anything about either, except engage in mutually beneficial trade. Most of the world is being held back by bad governance, dictatorships and democracies alike. The West has the only economies of significant size that still have the broad outlines of a true free market system.
      - makomk 11y ago
        And how much of those future earnings will go right back into the pockets of the mega-wealthy through rent and interest payments and profits on goods that they buy from companies owned? Nearly all of it, I'd imagine.
      - jessaustin 11y ago
        Now you're not talking about wealth, but rather some other measure that is apparently more interesting to you. If you're going to count future earning, you ought at least count future spending as well, which quantity may completely swamp the other. After all wealth includes past spending as well as past earning.
heurist 11y ago
It's more complicated than that. You need to live in a cheap part of town to afford rent but your city is un-walkable and has poor public transportation? Buy or lease a car so you can reliably get to work on time. You have a family and want to send your children to the best (or even decent) public schools? Live in a more expensive area - you have to buy access to good schools in many places, and the monthly payment on a mortgage for a house is cheaper than renting. You want a college education? Pay up. You want health care? Better have good insurance. There are many reasons that people have debt, and it's not all exorbitant spending. At the same time SOMEONE is profiting off that debt, and they have a vested interest in keeping that debt alive. This is a good talk that discusses nonintuitive pains the middle class is experiencing: https://www.youtube.com/watch?v=akVL7QY0S8A https://www.youtube.com/watch?v=akVL7QY0S8A
- marcoperaza 11y ago
  The problem is that these measures leave out most people's most valuable asset, their future earning potential. There's nothing wrong with having a serviceable mortgage or car payment. I think you misinterpreted me. Yes, people do profit from that debt. Good! Because otherwise you wouldn't be able to turn some of that future earning potential into buying power today. This ancient innovation, the loan, allows us to do that. If the lender didn't stand to profit from interest, he wouldn't lend. It's a triumph of capitalism.
  - heurist 11y ago
    I did not misinterpret you, I understand fully what you are trying to say. I disagree with you. You and I are in the fortunate positions of being able to service debt and even avoid it entirely. Many people are not. Lenders have the ability to take advantage of social and financial systems that require debt, and through the application of their profits can alter those systems so that more debt is required to survive. In my mind, that is capitalism's failure. Spending your future earning potential is fine, buy a boat or a house bigger than you need if you want to, but if you need to go into debt for employment, education, or health care as many in the U.S. do now then something is very wrong. Furthermore, servicing that debt can keep people stuck in debt or poverty and reducing their spending potential, which is destructive to the economy. All of these things can be fixed fairly cheaply but the solutions are being suppressed for the profit of a few.
cmurf 11y ago
This is a disingenuous rebuttal. The difference in wealth between someone worth $45B, and two people each worth $1 million and -$1million respectively, is identical. The millionaire is worth less than 0.01% of the first. If this were a card game, the millionaire could go piss himself. If it were possible to put $45B into a typical savings account earning 1% interest per year, that $45B person will make more money doing nothing in 1 day than the millionaire is worth. The thing is, it's not possible to do that. It's actually difficult to make only $1 million per day off $45B in assets. You'd have to give away huge chunks of assets to avoid making $4+ million per day. The problem is hoarding. It's no longer enough to go back to a 94% income rate for the top bracket like we used to have for ~30 years expressly to prevent this amount of hoarding.
- marcoperaza 11y ago
  Hoarding? Do you think rich people just stuff their money in a mattress? Even if they deposited it all in checking accounts, the banks would reinvest it all over the economy.
  - cmurf 11y ago
    Yes I do, that mattress is called stock.
    - marcoperaza 11y ago
      If you're buying newly issued stock, that's going to be directly spent on business expenses like salaries and payments to other companies. Even buying existing stock directly supports the market for companies to raise money in that way. If you're buying existing stock, someone on the other end is receiving your money that they will then spend or invest as they see fit. Very little money is idle, since it's in no one's interests for it to be.
  - leot 11y ago
    Yes, the problem is hoarding. Which is proportional to the delta in potential and actual productivity of the already wealthy (and their assets). Here's a quick demonstration: imagine all US taxation (apart from excise taxes) was replaced by a 3% yearly tax on household net wealth. No income taxes. No corporate taxes. No cap gains. No weird deductions based on expected future whatever. The question now is: cui bono? The hard working, high growth individuals (wealthy or not) benefit because their income and capital gains remain untouched -- they just need to earn enough in returns to offset the 3% tax. And who loses? The hoarders engaged strictly in "wealth preservation" (https://books.google.com/ngrams/graph?content=wealth+preservation&year_start=1900&year_end=2008&corpus=15&smoothing=3 https://books.google.com/ngrams/graph?content=wealth+preserv...).

baddox 11y ago

Are we talking about net worth, or income? I thought we were talking about income initially.

marcoperaza 11y ago
I'm just talking about the statistics that GavinMcG was citing. We were talking about income inequality, but the sensationalist statistic he cited is not.

deleted 11y ago

[deleted]

GavinMcG 11y ago

It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course) not the whole story. But that's one narrow slice. On the scale of 80 people with billions upon billions vs. half of everyone else, it's hardly a disingenuous statistic.

marcoperaza 11y ago
The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.
- GavinMcG 11y ago
  Well on the future earning potential front, the wealthier you are...
- notahacker 11y ago
  On a global scale, this is nonsense. The number of people globally who have negligible net worth because they earn less than $10 per day vastly exceeds the number of people who have negligible net worth because they've only just started paying down the mortgage on their McMansion and still have student loan repayments remaining. The purchasing power of those 80 people isn't going to start looking insignificant if you change the basis for comparison to net wealth plus imputed future income streams.
  - marcoperaza 11y ago
    I disagree. If you take the 3 billion poorest people in the world and properly account for their future earnings, it will certainly exceed the combined expected wealth of these 80 billionaires. You couldn't have anything close to this sensationalist statistic. Also, global poverty is not the fault of Western riches. It's not something we (Westerners) can do anything about either, except engage in mutually beneficial trade. Most of the world is being held back by bad governance, dictatorships and democracies alike. The West has the only economies of significant size that still have the broad outlines of a true free market system.
    - makomk 11y ago
      And how much of those future earnings will go right back into the pockets of the mega-wealthy through rent and interest payments and profits on goods that they buy from companies owned? Nearly all of it, I'd imagine.
    - jessaustin 11y ago
      Now you're not talking about wealth, but rather some other measure that is apparently more interesting to you. If you're going to count future earning, you ought at least count future spending as well, which quantity may completely swamp the other. After all wealth includes past spending as well as past earning.

heurist 11y ago

It's more complicated than that. You need to live in a cheap part of town to afford rent but your city is un-walkable and has poor public transportation? Buy or lease a car so you can reliably get to work on time. You have a family and want to send your children to the best (or even decent) public schools? Live in a more expensive area - you have to buy access to good schools in many places, and the monthly payment on a mortgage for a house is cheaper than renting. You want a college education? Pay up. You want health care? Better have good insurance. There are many reasons that people have debt, and it's not all exorbitant spending. At the same time SOMEONE is profiting off that debt, and they have a vested interest in keeping that debt alive. This is a good talk that discusses nonintuitive pains the middle class is experiencing: https://www.youtube.com/watch?v=akVL7QY0S8A https://www.youtube.com/watch?v=akVL7QY0S8A

marcoperaza 11y ago
The problem is that these measures leave out most people's most valuable asset, their future earning potential. There's nothing wrong with having a serviceable mortgage or car payment. I think you misinterpreted me. Yes, people do profit from that debt. Good! Because otherwise you wouldn't be able to turn some of that future earning potential into buying power today. This ancient innovation, the loan, allows us to do that. If the lender didn't stand to profit from interest, he wouldn't lend. It's a triumph of capitalism.
- heurist 11y ago
  I did not misinterpret you, I understand fully what you are trying to say. I disagree with you. You and I are in the fortunate positions of being able to service debt and even avoid it entirely. Many people are not. Lenders have the ability to take advantage of social and financial systems that require debt, and through the application of their profits can alter those systems so that more debt is required to survive. In my mind, that is capitalism's failure. Spending your future earning potential is fine, buy a boat or a house bigger than you need if you want to, but if you need to go into debt for employment, education, or health care as many in the U.S. do now then something is very wrong. Furthermore, servicing that debt can keep people stuck in debt or poverty and reducing their spending potential, which is destructive to the economy. All of these things can be fixed fairly cheaply but the solutions are being suppressed for the profit of a few.

cmurf 11y ago

This is a disingenuous rebuttal. The difference in wealth between someone worth $45B, and two people each worth $1 million and -$1million respectively, is identical. The millionaire is worth less than 0.01% of the first. If this were a card game, the millionaire could go piss himself. If it were possible to put $45B into a typical savings account earning 1% interest per year, that $45B person will make more money doing nothing in 1 day than the millionaire is worth. The thing is, it's not possible to do that. It's actually difficult to make only $1 million per day off $45B in assets. You'd have to give away huge chunks of assets to avoid making $4+ million per day. The problem is hoarding. It's no longer enough to go back to a 94% income rate for the top bracket like we used to have for ~30 years expressly to prevent this amount of hoarding.

marcoperaza 11y ago
Hoarding? Do you think rich people just stuff their money in a mattress? Even if they deposited it all in checking accounts, the banks would reinvest it all over the economy.
- cmurf 11y ago
  Yes I do, that mattress is called stock.
  - marcoperaza 11y ago
    If you're buying newly issued stock, that's going to be directly spent on business expenses like salaries and payments to other companies. Even buying existing stock directly supports the market for companies to raise money in that way. If you're buying existing stock, someone on the other end is receiving your money that they will then spend or invest as they see fit. Very little money is idle, since it's in no one's interests for it to be.
- leot 11y ago
  Yes, the problem is hoarding. Which is proportional to the delta in potential and actual productivity of the already wealthy (and their assets). Here's a quick demonstration: imagine all US taxation (apart from excise taxes) was replaced by a 3% yearly tax on household net wealth. No income taxes. No corporate taxes. No cap gains. No weird deductions based on expected future whatever. The question now is: cui bono? The hard working, high growth individuals (wealthy or not) benefit because their income and capital gains remain untouched -- they just need to earn enough in returns to offset the 3% tax. And who loses? The hoarders engaged strictly in "wealth preservation" (https://books.google.com/ngrams/graph?content=wealth+preservation&year_start=1900&year_end=2008&corpus=15&smoothing=3 https://books.google.com/ngrams/graph?content=wealth+preserv...).