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"...the money will get pissed away." This is a common misconception about money. It never gets 'pissed away', it just changes hands. How fast it changes hands,

"...the money will get pissed away." This is a common misconception about money. It never gets 'pissed away', it just changes hands. How fast it changes hands, and the degree to which it leaves productive assets in its wake, are the determining factors for economic health. The question is whether money spent by individuals on daily necessities would ultimately be better for the economy than money spent by high speed traders exchanging commercial paper or by a surgeon buying a second yacht. I don't know the answer to that question, but in no case is the money 'pissed away'. To paraphrase Al Gore, there is no 'away' to piss it into.

DoreenMichele 9y ago
"Easy come, easy go" is a well known phenomenon. How you get your money influences how and what you spend it on. Most lottery winners are bankrupt within 5 years (about 2/3s of them). I know someone who got fired, got six weeks severance pay, drove to a vacation spot with a friend and blew six weeks pay in one three day weekend on sex workers and cocaine. They then moved back home because they couldn't afford their apartment anymore. Six weeks severance pay plus unemployment benefits could have bought them their ongoing independence. I would call that pissing money away. Edit: Changed hookers to sex workers. They were called hookers back in the day.
- shove 9y ago
  anecdote != data
  - DoreenMichele 9y ago
    You only need one example to the contrary to rebut an assertion of never.
    - falcolas 9y ago
      However you need much more than one to avoid delineating the exceptions which prove the rule. Also, your anecdote had a safety net - parents willing to take them in. What impact would the absence of that safety net have had?
      - DoreenMichele 9y ago
        The judgement of the parents may have been part of why he felt compelled to leave town and get thoroughly wasted. Perhaps had they not been there, he would have been facing a very different mental and emotional landscape entirely and made other choices. You cannot change one element of an equation without impacting all parts. Thinking you can is a common logical error.
- vannevar 9y ago
  It doesn't matter as much what he got for his money, as where it goes from there. The question is whether the money has a faster path to productivity via the sex worker or drug dealer than it would via a hedge fund manager. And that is not an easy economic question to answer, all moralizing aside.
  - DoreenMichele 9y ago
    I think that completely discounts the negative long term impact on his life, which seems particularly egregious in a discussion where I am being criticized as if my remarks are an act of callous disregard for the welfare of the common person. You don't care that he flushed his own life down the toilet, just as long as sex workers and cocaine dealers invested it well after they cleaned him out. And then you criticize me for "moralizing."
    - vannevar 9y ago
      You're correct, it does discount the impact on his life because that impact, however emotionally compelling, is irrelevant to the point of the subthread. Which is that, short of literally destroying it, money is never 'pissed away'---it simply moves on to someone else. People often confuse the benefits (and moral implications) for the spender (which are often pretty clear, as in this case) with the broader economic benefit of the transaction to the economy (which is much less clear). Ie, "someone made a bad moral choice in spending their money, so that must be bad for the economy." Not necessarily.
      - DoreenMichele 9y ago
        So, his inability to buy a house for himself and the fact that he continued to live with parents for many years has no bearing on our discussion of the economy and the creation of wealth? I don't want to give a lot more details about this person's life. It is a real person and giving too many details amounts to gossiping about them. But I think you are in error. The impact it had on this person's life has other impacts. I don't know why you think this is some appeal to emotion. It isn't. A person who cannot get their life together because of one youthful indiscretion has long term consequences that impact the wider economy. This is likely part of why such stories are emotionally compelling: Because it actually matters. I am not generally not talk about morality in the sense that other people do. I am not too happy to have the concept of morality injected into the discussion in such a way that it slings mud all over me at every step of the way. I am not talking about morality. I am talking about what makes for a healthy system that serves both the commoner and the rich person well. Our current approach doesn't do that. One of the reasons it does not do that is because I have seen a number of statements by wealthy people to the effect that they live with a lot of fear due to their wealth plus the state of the world. I thin this fear is legitimate and I think it tells us that a system that makes the ultra rich richer by bleeding the common person is a fundamentally unhealthy system that serves no one well, not even the rich people soaking up the extra money and wondering if they will need to abscond to Australia in their jet should the crap hit the fan. I think this fear is part of why so many tech giants talk so much about things like creating basic income. They want to be able to stop living in fear that someone is going to want them dead because the world is going to hell for so very many people and this makes them a potential target.
weberc2 9y ago
> The question is whether money spent by individuals on daily necessities would ultimately be better for the economy than money spent by high speed traders exchanging commercial paper or by a surgeon buying a second yacht. I don't know the answer to that question, but in no case is the money 'pissed away' That isn't the only question, and it also presumes that lower-income people only spend their money on "daily necessities" and not cable, cigarettes, alcohol, etc. It also presumes that wealthy people only spend frivolously, and that they don't invest. Both of these presumptions are likely very wrong. Ignoring moral judgments about how people spend their money, these two propositions (frivolous spending versus "durable" spending) have very different economic implications--frivolous spending is pissing away the money. The cigarette/alcohol/etc industry works to produce a product that will ultimately be consumed--its value is immediately lost. So at one point in time, Joe had $10 and Budweiser had a case of beer--both existed simultaneously, but after Joe buys and drinks the beer, only the $10 remains (in Budweiser's pocket). The value of the beer is literally pissed away, and the economy is roughly $10 smaller (modulo Budweiser's margins). If it was a different product--a home, for example, the home would exist and retain value for a very long time into the future even while the money to buy the home is transferred to the contractors, etc and beyond. The money to buy the home and much of the home's value continue to exist simultaneously for a very long time.
- vannevar 9y ago
  There are certainly ways of spending money that are more clearly productive than others. But no, the money isn't pissed away just because what is purchased gets consumed. That just means that the path it's on may not be very efficient. It's that path efficiency that ultimately matters, not the value of any one stop. It's a harder thing to measure, because a short, fast path with a few low-productivity stops may be better than a longer, slower path with higher productivity stops, simply because the money gets somewhere else (with a much higher productivity use) faster.
  - weberc2 9y ago
    It absolutely is pissed away. Going back to the beer metaphor, at one time, the economy contained the (let's say) $8 used to create the beer and the $10 to buy the beer. After the beer is consumed, only the $10 remains, so the economy is $8 smaller. $8 was pissed away. My whole point is that economics isn't zero-sum, which appears to contradict your point, although I'm confused by your path efficiency remarks.

DoreenMichele 9y ago

"Easy come, easy go" is a well known phenomenon. How you get your money influences how and what you spend it on. Most lottery winners are bankrupt within 5 years (about 2/3s of them). I know someone who got fired, got six weeks severance pay, drove to a vacation spot with a friend and blew six weeks pay in one three day weekend on sex workers and cocaine. They then moved back home because they couldn't afford their apartment anymore. Six weeks severance pay plus unemployment benefits could have bought them their ongoing independence. I would call that pissing money away. Edit: Changed hookers to sex workers. They were called hookers back in the day.

shove 9y ago
anecdote != data
- DoreenMichele 9y ago
  You only need one example to the contrary to rebut an assertion of never.
  - falcolas 9y ago
    However you need much more than one to avoid delineating the exceptions which prove the rule. Also, your anecdote had a safety net - parents willing to take them in. What impact would the absence of that safety net have had?
    - DoreenMichele 9y ago
      The judgement of the parents may have been part of why he felt compelled to leave town and get thoroughly wasted. Perhaps had they not been there, he would have been facing a very different mental and emotional landscape entirely and made other choices. You cannot change one element of an equation without impacting all parts. Thinking you can is a common logical error.
vannevar 9y ago
It doesn't matter as much what he got for his money, as where it goes from there. The question is whether the money has a faster path to productivity via the sex worker or drug dealer than it would via a hedge fund manager. And that is not an easy economic question to answer, all moralizing aside.
- DoreenMichele 9y ago
  I think that completely discounts the negative long term impact on his life, which seems particularly egregious in a discussion where I am being criticized as if my remarks are an act of callous disregard for the welfare of the common person. You don't care that he flushed his own life down the toilet, just as long as sex workers and cocaine dealers invested it well after they cleaned him out. And then you criticize me for "moralizing."
  - vannevar 9y ago
    You're correct, it does discount the impact on his life because that impact, however emotionally compelling, is irrelevant to the point of the subthread. Which is that, short of literally destroying it, money is never 'pissed away'---it simply moves on to someone else. People often confuse the benefits (and moral implications) for the spender (which are often pretty clear, as in this case) with the broader economic benefit of the transaction to the economy (which is much less clear). Ie, "someone made a bad moral choice in spending their money, so that must be bad for the economy." Not necessarily.
    - DoreenMichele 9y ago
      So, his inability to buy a house for himself and the fact that he continued to live with parents for many years has no bearing on our discussion of the economy and the creation of wealth? I don't want to give a lot more details about this person's life. It is a real person and giving too many details amounts to gossiping about them. But I think you are in error. The impact it had on this person's life has other impacts. I don't know why you think this is some appeal to emotion. It isn't. A person who cannot get their life together because of one youthful indiscretion has long term consequences that impact the wider economy. This is likely part of why such stories are emotionally compelling: Because it actually matters. I am not generally not talk about morality in the sense that other people do. I am not too happy to have the concept of morality injected into the discussion in such a way that it slings mud all over me at every step of the way. I am not talking about morality. I am talking about what makes for a healthy system that serves both the commoner and the rich person well. Our current approach doesn't do that. One of the reasons it does not do that is because I have seen a number of statements by wealthy people to the effect that they live with a lot of fear due to their wealth plus the state of the world. I thin this fear is legitimate and I think it tells us that a system that makes the ultra rich richer by bleeding the common person is a fundamentally unhealthy system that serves no one well, not even the rich people soaking up the extra money and wondering if they will need to abscond to Australia in their jet should the crap hit the fan. I think this fear is part of why so many tech giants talk so much about things like creating basic income. They want to be able to stop living in fear that someone is going to want them dead because the world is going to hell for so very many people and this makes them a potential target.

weberc2 9y ago

> The question is whether money spent by individuals on daily necessities would ultimately be better for the economy than money spent by high speed traders exchanging commercial paper or by a surgeon buying a second yacht. I don't know the answer to that question, but in no case is the money 'pissed away' That isn't the only question, and it also presumes that lower-income people only spend their money on "daily necessities" and not cable, cigarettes, alcohol, etc. It also presumes that wealthy people only spend frivolously, and that they don't invest. Both of these presumptions are likely very wrong. Ignoring moral judgments about how people spend their money, these two propositions (frivolous spending versus "durable" spending) have very different economic implications--frivolous spending is pissing away the money. The cigarette/alcohol/etc industry works to produce a product that will ultimately be consumed--its value is immediately lost. So at one point in time, Joe had $10 and Budweiser had a case of beer--both existed simultaneously, but after Joe buys and drinks the beer, only the $10 remains (in Budweiser's pocket). The value of the beer is literally pissed away, and the economy is roughly $10 smaller (modulo Budweiser's margins). If it was a different product--a home, for example, the home would exist and retain value for a very long time into the future even while the money to buy the home is transferred to the contractors, etc and beyond. The money to buy the home and much of the home's value continue to exist simultaneously for a very long time.

vannevar 9y ago
There are certainly ways of spending money that are more clearly productive than others. But no, the money isn't pissed away just because what is purchased gets consumed. That just means that the path it's on may not be very efficient. It's that path efficiency that ultimately matters, not the value of any one stop. It's a harder thing to measure, because a short, fast path with a few low-productivity stops may be better than a longer, slower path with higher productivity stops, simply because the money gets somewhere else (with a much higher productivity use) faster.
- weberc2 9y ago
  It absolutely is pissed away. Going back to the beer metaphor, at one time, the economy contained the (let's say) $8 used to create the beer and the $10 to buy the beer. After the beer is consumed, only the $10 remains, so the economy is $8 smaller. $8 was pissed away. My whole point is that economics isn't zero-sum, which appears to contradict your point, although I'm confused by your path efficiency remarks.