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Isn't that a common stimulus method though? Make debt cheap, drive down interest rates to encourage spending and not saving? Perhaps if we managed it partly vi

Isn't that a common stimulus method though? Make debt cheap, drive down interest rates to encourage spending and not saving? Perhaps if we managed it partly via net worth taxes for the stimulus, we would have more wiggle room with regards to interest rates as a tool, as well as limiting the effectiveness of asset based methods of getting around income taxes.

roenxi 8y ago
The common stimulus methods are have a negative impact on savers too. The impacts of high/low have a lag time measured in decades, so it is very difficult to debate what they are. Eg, memory suggests there is a pension crisis brewing in the states, but how does the lack of preparation interplay with demographics, government policy and savings rate? Complicated topic. Personally, I'd expect that any anti-savings policy has a net-negative effect but that very few people would successfully link cause, effect and magnitude. At some point, people should be putting their efforts into forming and preserving capital to set up for the future.
- pariahHN 8y ago
  True, but putting a tax on net worth above, say, a million wouldn't affect most of the population - those who are in the most need of the ability to build up savings would still be able to do so. The key would be picking the point at which net worth is past the "financially independent" stage. Sort of like the thought behind the proof of stake system in Cardano - once a node gets past a certain threshold, the gains flatten out. This means that you wont have just a few nodes dominate the whole network, as once they reach a certain size it becomes more profitable for people to switch to a smaller node which encourages a more even distribution of power. If we implement a similar mechanism, sure maybe we won't have as many people becoming billionaires, but we could have a lot more people that aren't on the financial edge and are thus able to contribute more effectively. Sort of a damping effect for the power law. Individually you may not be able to accrue as much in terms of assets, but everyone in society benefits from having more people capable of contributing to research and development - I think that's largely why we have seen such rapid scientific advancement in the past century compared to the past two millennia.
  - harryh 8y ago
    FWIW, roughly 12% of US households have a net worth of 1M or greater.

roenxi 8y ago

The common stimulus methods are have a negative impact on savers too. The impacts of high/low have a lag time measured in decades, so it is very difficult to debate what they are. Eg, memory suggests there is a pension crisis brewing in the states, but how does the lack of preparation interplay with demographics, government policy and savings rate? Complicated topic. Personally, I'd expect that any anti-savings policy has a net-negative effect but that very few people would successfully link cause, effect and magnitude. At some point, people should be putting their efforts into forming and preserving capital to set up for the future.

pariahHN 8y ago
True, but putting a tax on net worth above, say, a million wouldn't affect most of the population - those who are in the most need of the ability to build up savings would still be able to do so. The key would be picking the point at which net worth is past the "financially independent" stage. Sort of like the thought behind the proof of stake system in Cardano - once a node gets past a certain threshold, the gains flatten out. This means that you wont have just a few nodes dominate the whole network, as once they reach a certain size it becomes more profitable for people to switch to a smaller node which encourages a more even distribution of power. If we implement a similar mechanism, sure maybe we won't have as many people becoming billionaires, but we could have a lot more people that aren't on the financial edge and are thus able to contribute more effectively. Sort of a damping effect for the power law. Individually you may not be able to accrue as much in terms of assets, but everyone in society benefits from having more people capable of contributing to research and development - I think that's largely why we have seen such rapid scientific advancement in the past century compared to the past two millennia.
- harryh 8y ago
  FWIW, roughly 12% of US households have a net worth of 1M or greater.