10 ms·

For some reason, I am reminded of the paradox of more hard disc space. Or more lanes on the highway. Any time to capacity is increased, it seems to get consumed

For some reason, I am reminded of the paradox of more hard disc space. Or more lanes on the highway. Any time to capacity is increased, it seems to get consumed and before long, you're out of space again. This presents a difficulty that perhaps researchers and pollsters can tease out: How many of these cash-poor people genuinely are earning enough to live comfortably vs. don't know enough or don't care enough to build savings, and instead, spend up to their income? Increase their income and they'll just increase their spending and be back where they started. It seems likely that we could take these numbers down substantially by improving financial management education. Or, simply accept that a large percentage of Americans want to live their life to the fullest that their income can allow.

Retric 7y ago
More HDD space did eventually solve the problem for most people most of the time. Which I think is telling. People don’t need unlimited road capacity, but they do want more than a few minor improvements.
- marcosdumay 7y ago
  A thousand times that... But the matter with roads is different, because we will not see orders of magnitude improvement on road capacity, ever. What we need is completely different solutions, but it would be great if people pushing for city mobility weren't pushing against the one form of mobility that actually works most of the time.
  - clairity 7y ago
    > "...roads [are] different, because we will not see orders of magnitude improvement on road capacity, ever." you don't need an orders of magnitude increase in capacity. doubling it is probably enough. you can do that by putting roads underground, right under existing roads. it's expensive, but we have concentrated and idle wealth that could be unleashed on it. let rich people who really want less congestion pay for it. people in LA willingly pay $20+ for one single-occupancy trip in the toll lanes.
- temp-dude-87844 7y ago
  For HDD space these days, inelastic costs are a tiny portion of most people's available space. Most people these days have a decent amount of hard disk space, enough for essentials, with plenty left over for discretionary usage. Although software binaries and video games are larger than ever, and pictures and video have higher resolutions, changes in the distribution of commercial media have made it less necessary to have storage space for music and commercial movies. With the vast majority of people having enough space, few people are hurt if some others require more space -- those people can just buy more storage, and doing so does not affect people who have enough space. Roads and housing are different, because one person's usage of a particular instance deprives part or all of another person's use. People (and businesses) may be able to attain a comparative advantage by deriving more benefit from their consumption pattern of these scarce resources than drawbacks they suffer from the consumption patterns of others, so any "spare" capacity is an opportunity for someone to benefit. Demand is thereby induced.
maximente 7y ago
i think this is referred to as Braess's paradox https://en.wikipedia.org/wiki/Braess%27s_paradox https://en.wikipedia.org/wiki/Braess%27s_paradox
- lonelappde 7y ago
  No, that's a mathematical trick in graph theory that has rarely been seen in real life because it depends on very specific arbitrary parameter choices.
anovikov 7y ago
Are you sure it will get the economy better? Savings is essentially turning consumption money into capital money. What is the benefit of that in the economy where the latter is printed by the trillion?
- marcosdumay 7y ago
  It's turning consumption wealth into capital wealth. Printing money has a huge impact on that distribution, but it's not something you can increase globally by printing.
tracer4201 7y ago
We could start by teaching about managing money in high school. I didn’t know how the stock market worked, about the Fed, about saving, IRAs, Roth, 401K, what a w2 really is, the tax brackets and how they work well until after high school. My high school in the Midwest hardly even covered Trig. There was no Calculus course. We did invest in our football stadium, basketball gym, and various other athletic programs. I’m not saying those things aren’t important, but real education took a back seat.
- ultrarunner 7y ago
  I did have a class on managing money in high school. It involved a man fanning out his credit cards and explaining that if you pay off one card with another you can maximize "float." We were then quizzed on the 'best' payment methods, which required ordering a few in terms of when we'd actually have to pay. Shockingly, he was not a money-savvy wealthy man. My point being that there are whole host of prerequisite problems to solve before we can get to a point of using public schools to effectively solve societal problems like this. I think your second paragraph begins to speak to one of the reasons these problems proliferate.
  - mjfl 7y ago
    Your school allowed that man to speak to students?
- jogjayr 7y ago
  I'm surprised you're being downvoted for such a reasonable statement. If schools teach essential life skills classes such as driver's ed, they really should teach personal finance and home economics (especially cooking) too.
  - brewdad 7y ago
    Schools in my area stopped teaching driver's ed decades ago. The community college offers a few classes a quarter. They sell out in about 5 minutes. I wonder why our accident rates continue to rise year after year.
dougmwne 7y ago
I have been developing another mental model of this. I think that we naturally measure our own lifestyles by looking at the people around us. We want to feel like we're beating the average or at least not too far below average. People we encounter in our lives will try to present themselves as positively as possible, so we end up thinking that their lives are a bit more prosperous than they really are. I think this is where most of the pressure to increase our standard of living comes from. Then you bring in competition for resources. If everyone makes similar amounts of money and everyone is trying to have a similar quality of life, we will tend to spend 100% of our incomes on our cost of living. Just like how perfectly competitive companies will naturally compete away all profits, competition for housing, education, healthcare, etc. will naturally compete away all personal savings until the average savings rate is near zero. The only way out of this competition trap is to find some way to escape the average. Either find a way to make much more money than normal, be much more frugal than normal, or be much luckier than normal.
- lonelappde 7y ago
  That's "Keeping up with the Joneses". The way out of it is with cognitive training / therapy to have a healthier outlook on your life, and/or learn to hate everyone trying to sell you stuff.
- abecedarius 7y ago
  I think this model is on the right track, though I'd change "quality of life" to "positional goods and signaling games". Not all of quality of life is from doing better than other people in your reference set, else FIRE would be an unreasonable goal for middle-class workers. It's interesting to think about how to reduce the prevalence/cost of these games.
- kgwgk 7y ago
  The average is not really that important. As long as your income is not at the lower end of the distribution it’s a just a matter of choice to live as if your income was lower than it is (except in the cases where you would have access to subsidies if your income was actually lower).
ericmcer 7y ago
I think this is true to a point, if you are making <40k or so saving money requires almost a monastic lifestyle. My income has ranged from 20k -almost 200k and it’s ludicrously easy to save at one end, and almost impossible on the other. It is not super fair to tell people eating out is a luxury they cannot afford.
- lonelappde 7y ago
  > It is not super fair to tell people eating out is a luxury they cannot afford. The entitlement in this statement is absolutely gobsmackingly absurd. I suppose this is want comes from being born after the survivors of the Great Depression are mostly dead.
  - noonespecial 7y ago
    It is not super fair to tell people having enough food all the time is a luxury they cannot afford. Where exactly is the line when it becomes entitlement?
    - sokoloff 7y ago
      For me, it’s somewhere well short of regularly eating food that costs 5x (or more) what the equivalent, nutritious meal prepared at home is.
      - kd5bjo 7y ago
        As far as I can tell, the primary fault there has been our failure to teach basic life skills (home cooking), learning skills (teach yourself how to cook), or problem solving skills (realize that you have a problem that can be solved by teaching yourself to cook).
        rofo1 7y ago
        You can teach yourself basic cooking (from zero) in less than 10 hours. Maybe even less than 5 hours. It's insanely easy. Teaching common sense and making the right decisions? Superbly difficult, probably impossible - at least at scale.
nemonemo 7y ago
US median household income is about $60k, which is stagnant for about 15 years despite GDP growth [1]. The median listed housing price has increased by ~50% for the same time[2]. What could a good financial management education teach with these trends in mind? For a newly-minted median-income household, what is a good financial decision between buying a house or renting? Buying a house with much debt and mortgage payment is risky (remember 2008?) but maybe it is a good investment until that time. Or, not buying a house and continue to pay the rent and helping someone else paying their mortgage may be the safest bet. In either case, there seems growing housing cost anyways that no financial education could help. Maybe moving to an area where no job exists but house or rent is cheap could be an alternative that no education suggests? IMO, financial education without considering external environment is easy. It's always like, save more and keep some cash for the risk. But what it doesn't tell people is that the risk is getting higher for the same return and more and more people deplete their income paying the premium. [1] https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... [2] https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS
- WillPostForFood 7y ago
  I wouldn't say US median income is stagnant, more like volatile. It climbed from 50k to 60k between 1985 and 2008, collapsed back to 55k during the recession and slow recovery in 2012, then climbed back to an all time high of 61k by 2017. But that actually supports your point: it is very difficult to predict a "safe" time to take on debt.
  - pault 7y ago
    Is that adjusted for inflation?
    - telotortium 7y ago
      It's real income, so yes.
    - sokoloff 7y ago
stretchwithme 7y ago
I'd like to improve the financial education of people making decisions in government. Because they've run up a $22 trillion debt. And our government cannot come up with $400 to cover an unexpected expense either. Not without going further into debt. Which is why all such decision makers should at least learn how to run a lemonade stand profitably. Until then, they should not be deciding what financial education people should be getting either.
swant56 7y ago
It’s called Induced Demand, a very common phenomenon in everything from traffic to housing https://en.m.wikipedia.org/wiki/Induced_demand https://en.m.wikipedia.org/wiki/Induced_demand Advocates of “more housing” in the Bay Area, for example, will be dismayed to see that tons of housing and higher density did not work in NYC, prices will remain high, so more housing is not the solution.
- spikels 7y ago
  This is incorrect. The impact of supply on housing prices has been shown over and over again in the real estate economics literature. The concept of induced demand in real estate is quite different than in transportation. The theoretical mechanism involves increased amenities induced by higher density above and beyond normal supply and demand interactions. It is likely to be a much smaller effect if it even exists at all. There is no solid research showing it is a significant in practice. Here’s a recent presentation on the issue: https://appam.confex.com/appam/2018/webprogram/Paper25811.html https://appam.confex.com/appam/2018/webprogram/Paper25811.ht...
  - AnthonyMouse 7y ago
    "Induced demand" leads to wrong conclusions in general, analogous to confusing the local maxima produced by a hill climbing algorithm with a global one. It's possible to build enough of anything to satisfy all the demand, even roads. The real problem with roads is the opportunity cost. There are alternative, better ways of satisfying that demand -- like building more housing, so people can live closer to where they work and don't have to drive as far. So what's the alternative, better way of satisfying demand for housing? Nobody has one? Then we ought to build more housing, even if we have to plow through some induced demand (which may or may not even be present) in order to satisfy the full demand.
  - swant56 7y ago
    I’m glad people understand that building more housing does NOT work
  - swant56 7y ago
xg15 7y ago
I think in the case of hard disk space or internet bandwidth, the blame is less on users and more on developers who seem to see this as an invitation to bloated (but convenient to develop with) data formats or frameworks since "space is now cheap". (Even if it's actually the user's space and not theirs) So the equivalent would be rising prices to eat up any benefit - and exactly that seems to happen. At least there seem to be enough studies about the rise in prices of certain sectors vs the (far lower) rise in income to debunk the "they are just uneducated/undisciplined" hypothesis.
- tinus_hn 7y ago
  The fact is that people are just storing more. Higher resolution pictures or even RAW files, 4K movies, high quality audio, games with fantastic visuals in enormous worlds. Of course the operating systems and apps are full of bloat but that’s only a small amount of storage, really.
deleted 7y ago
[deleted]
shoo 7y ago
I don't think an analogy that focuses on "capacity" alone is a great one. You want an analogy with both stocks and flows. It's worth checking out Donella Meadows' book "Thinking in Systems: A Primer". here's a rough disk space analogy with stocks and flows: Suppose you have a disk with free space X. What rate do you consume free disk space? What rate do you produce more free disk space? if flow out (of disk space) is larger than flow in (of disk space) then after some finite time you will always run out of disk, no matter how much free space X you started with. More capacity (a larger initial value of X) just buys you more time until the emergency. Which is useful, but you still haven't solved the actual problem in terms of the delta between the two flow rates. Now if you have your flow rates under control, and you produce at least as much free disk space as you consume, what if the flow rates aren't always steady, but have variability? Then having some spare capacity can help to provide slack or buffer to deal with temporary periods where disk is consumed much quicker than usual. But there are diminishing marginal returns to having lots of excess capacity. > Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. --Charles Dickens
- scarface74 7y ago
  I'd like to improve the financial education of people making decisions in government. Because they've run up a $22 trillion debt. The people in government know exactly what they are doing -they just don’t care. Politicians only care about deficits when their party isn’t in power.
soVeryTired 7y ago
> How many of these cash-poor people genuinely are earning enough to live comfortably vs. don't know enough or don't care enough to build savings, and instead, spend up to their income? Yep. It's obviously ignorance or profligacy. The system is fine, it's the people who are wrong.
- siphon22 7y ago
  Needs a "/s". I'm still not even sure because that sounds like a legit viewpoint people on HN may have.
lsc 7y ago
so... I've never been really poor, but like most of us, I've had lower income and higher income. Everyone gets unexpected bills, but my experience has been that those bills don't get larger with your income (even though most of your expected bills do grow with income) - a lot of those unexpected bills get smaller in absolute terms as your income goes up; both cars and medical expenses, in my experience, tend to move from 'unexpected bill' to 'expected bill' as your income goes up, as you generally get much better health insurance and newer cars. But even the things that don't move from unexpected to expected are harder to deal with when you are poor. Example; person A makes $14K/yr at walmart. They put away 10% of that every month. person B makes $200K/yr at Facebook. They put away 10% of that every month. Say you get a $250 parking ticket. If you are putting away 10% of your 14,000/yr salary - that parking ticket is gonna be a pretty big bite of your savings. I mean, if you've been putting away $1400 a year, you can cover it, but that $250 is still a big bite. If you work at facebook... say you are still putting away 10% of your $200,000 salary - that parking ticket costs you just as much, but it is a whole order of magnitude smaller when compared to your savings rate. Medical expenses are the more common case for unexpected bills; it's super expensive to get hurt while poor. It's not so expensive to get hurt while wealthy. Say you are playing catch with your kid nephew and you fall and mess up your knee. If you make $14,000, you probably have health insurance with the maximum deductible, and end up having to pay a bunch out of pocket. the 2019 out of pocket limit for an ACA compliant HDHP plan is $6750 - that's going to take a lot of saving 10% to pay off. And even if you do get it fixed, you probably have a job where you have to stand up and carry things; you will need a bunch of time off, time off that you're not gonna get paid for. Say the same things happens to the software engineer making $200K/yr. First, that job probably comes with pretty nice health insurance; you probably aren't out much out of pocket at all. The place where I work offers a HDHP plan but they actually give you an amount of money equal to the deductible every year. (me, I still take the traditional plan, 'cause I'm willing to pay extra if I don't have to deal with medical billing at all) Next? SWE jobs usually come with a bunch of paid time off. This person probably gets paid to recover at home. And if they felt like they needed to work? they probably could work from home; and for that matter, their job probably doesn't involve knees much, so they are gonna be able to go back in to work much sooner than the guy working at walmart.

Retric 7y ago

More HDD space did eventually solve the problem for most people most of the time. Which I think is telling. People don’t need unlimited road capacity, but they do want more than a few minor improvements.

marcosdumay 7y ago
A thousand times that... But the matter with roads is different, because we will not see orders of magnitude improvement on road capacity, ever. What we need is completely different solutions, but it would be great if people pushing for city mobility weren't pushing against the one form of mobility that actually works most of the time.
- clairity 7y ago
  > "...roads [are] different, because we will not see orders of magnitude improvement on road capacity, ever." you don't need an orders of magnitude increase in capacity. doubling it is probably enough. you can do that by putting roads underground, right under existing roads. it's expensive, but we have concentrated and idle wealth that could be unleashed on it. let rich people who really want less congestion pay for it. people in LA willingly pay $20+ for one single-occupancy trip in the toll lanes.
temp-dude-87844 7y ago
For HDD space these days, inelastic costs are a tiny portion of most people's available space. Most people these days have a decent amount of hard disk space, enough for essentials, with plenty left over for discretionary usage. Although software binaries and video games are larger than ever, and pictures and video have higher resolutions, changes in the distribution of commercial media have made it less necessary to have storage space for music and commercial movies. With the vast majority of people having enough space, few people are hurt if some others require more space -- those people can just buy more storage, and doing so does not affect people who have enough space. Roads and housing are different, because one person's usage of a particular instance deprives part or all of another person's use. People (and businesses) may be able to attain a comparative advantage by deriving more benefit from their consumption pattern of these scarce resources than drawbacks they suffer from the consumption patterns of others, so any "spare" capacity is an opportunity for someone to benefit. Demand is thereby induced.

maximente 7y ago

i think this is referred to as Braess's paradox https://en.wikipedia.org/wiki/Braess%27s_paradox https://en.wikipedia.org/wiki/Braess%27s_paradox

lonelappde 7y ago
No, that's a mathematical trick in graph theory that has rarely been seen in real life because it depends on very specific arbitrary parameter choices.

anovikov 7y ago

Are you sure it will get the economy better? Savings is essentially turning consumption money into capital money. What is the benefit of that in the economy where the latter is printed by the trillion?

marcosdumay 7y ago
It's turning consumption wealth into capital wealth. Printing money has a huge impact on that distribution, but it's not something you can increase globally by printing.

tracer4201 7y ago

We could start by teaching about managing money in high school. I didn’t know how the stock market worked, about the Fed, about saving, IRAs, Roth, 401K, what a w2 really is, the tax brackets and how they work well until after high school. My high school in the Midwest hardly even covered Trig. There was no Calculus course. We did invest in our football stadium, basketball gym, and various other athletic programs. I’m not saying those things aren’t important, but real education took a back seat.

ultrarunner 7y ago
I did have a class on managing money in high school. It involved a man fanning out his credit cards and explaining that if you pay off one card with another you can maximize "float." We were then quizzed on the 'best' payment methods, which required ordering a few in terms of when we'd actually have to pay. Shockingly, he was not a money-savvy wealthy man. My point being that there are whole host of prerequisite problems to solve before we can get to a point of using public schools to effectively solve societal problems like this. I think your second paragraph begins to speak to one of the reasons these problems proliferate.
- mjfl 7y ago
  Your school allowed that man to speak to students?
jogjayr 7y ago
I'm surprised you're being downvoted for such a reasonable statement. If schools teach essential life skills classes such as driver's ed, they really should teach personal finance and home economics (especially cooking) too.
- brewdad 7y ago
  Schools in my area stopped teaching driver's ed decades ago. The community college offers a few classes a quarter. They sell out in about 5 minutes. I wonder why our accident rates continue to rise year after year.

dougmwne 7y ago

I have been developing another mental model of this. I think that we naturally measure our own lifestyles by looking at the people around us. We want to feel like we're beating the average or at least not too far below average. People we encounter in our lives will try to present themselves as positively as possible, so we end up thinking that their lives are a bit more prosperous than they really are. I think this is where most of the pressure to increase our standard of living comes from. Then you bring in competition for resources. If everyone makes similar amounts of money and everyone is trying to have a similar quality of life, we will tend to spend 100% of our incomes on our cost of living. Just like how perfectly competitive companies will naturally compete away all profits, competition for housing, education, healthcare, etc. will naturally compete away all personal savings until the average savings rate is near zero. The only way out of this competition trap is to find some way to escape the average. Either find a way to make much more money than normal, be much more frugal than normal, or be much luckier than normal.

lonelappde 7y ago
That's "Keeping up with the Joneses". The way out of it is with cognitive training / therapy to have a healthier outlook on your life, and/or learn to hate everyone trying to sell you stuff.
abecedarius 7y ago
I think this model is on the right track, though I'd change "quality of life" to "positional goods and signaling games". Not all of quality of life is from doing better than other people in your reference set, else FIRE would be an unreasonable goal for middle-class workers. It's interesting to think about how to reduce the prevalence/cost of these games.
kgwgk 7y ago
The average is not really that important. As long as your income is not at the lower end of the distribution it’s a just a matter of choice to live as if your income was lower than it is (except in the cases where you would have access to subsidies if your income was actually lower).

ericmcer 7y ago

I think this is true to a point, if you are making <40k or so saving money requires almost a monastic lifestyle. My income has ranged from 20k -almost 200k and it’s ludicrously easy to save at one end, and almost impossible on the other. It is not super fair to tell people eating out is a luxury they cannot afford.

lonelappde 7y ago
> It is not super fair to tell people eating out is a luxury they cannot afford. The entitlement in this statement is absolutely gobsmackingly absurd. I suppose this is want comes from being born after the survivors of the Great Depression are mostly dead.
- noonespecial 7y ago
  It is not super fair to tell people having enough food all the time is a luxury they cannot afford. Where exactly is the line when it becomes entitlement?
  - sokoloff 7y ago
    For me, it’s somewhere well short of regularly eating food that costs 5x (or more) what the equivalent, nutritious meal prepared at home is.
    - kd5bjo 7y ago
      As far as I can tell, the primary fault there has been our failure to teach basic life skills (home cooking), learning skills (teach yourself how to cook), or problem solving skills (realize that you have a problem that can be solved by teaching yourself to cook).
      - rofo1 7y ago
        You can teach yourself basic cooking (from zero) in less than 10 hours. Maybe even less than 5 hours. It's insanely easy. Teaching common sense and making the right decisions? Superbly difficult, probably impossible - at least at scale.

nemonemo 7y ago

US median household income is about $60k, which is stagnant for about 15 years despite GDP growth [1]. The median listed housing price has increased by ~50% for the same time[2]. What could a good financial management education teach with these trends in mind? For a newly-minted median-income household, what is a good financial decision between buying a house or renting? Buying a house with much debt and mortgage payment is risky (remember 2008?) but maybe it is a good investment until that time. Or, not buying a house and continue to pay the rent and helping someone else paying their mortgage may be the safest bet. In either case, there seems growing housing cost anyways that no financial education could help. Maybe moving to an area where no job exists but house or rent is cheap could be an alternative that no education suggests? IMO, financial education without considering external environment is easy. It's always like, save more and keep some cash for the risk. But what it doesn't tell people is that the risk is getting higher for the same return and more and more people deplete their income paying the premium. [1] https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... [2] https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS

WillPostForFood 7y ago
I wouldn't say US median income is stagnant, more like volatile. It climbed from 50k to 60k between 1985 and 2008, collapsed back to 55k during the recession and slow recovery in 2012, then climbed back to an all time high of 61k by 2017. But that actually supports your point: it is very difficult to predict a "safe" time to take on debt.
- pault 7y ago
  Is that adjusted for inflation?
  - telotortium 7y ago
    It's real income, so yes.
  - sokoloff 7y ago

stretchwithme 7y ago

I'd like to improve the financial education of people making decisions in government. Because they've run up a $22 trillion debt. And our government cannot come up with $400 to cover an unexpected expense either. Not without going further into debt. Which is why all such decision makers should at least learn how to run a lemonade stand profitably. Until then, they should not be deciding what financial education people should be getting either.

swant56 7y ago

It’s called Induced Demand, a very common phenomenon in everything from traffic to housing https://en.m.wikipedia.org/wiki/Induced_demand https://en.m.wikipedia.org/wiki/Induced_demand Advocates of “more housing” in the Bay Area, for example, will be dismayed to see that tons of housing and higher density did not work in NYC, prices will remain high, so more housing is not the solution.

spikels 7y ago
This is incorrect. The impact of supply on housing prices has been shown over and over again in the real estate economics literature. The concept of induced demand in real estate is quite different than in transportation. The theoretical mechanism involves increased amenities induced by higher density above and beyond normal supply and demand interactions. It is likely to be a much smaller effect if it even exists at all. There is no solid research showing it is a significant in practice. Here’s a recent presentation on the issue: https://appam.confex.com/appam/2018/webprogram/Paper25811.html https://appam.confex.com/appam/2018/webprogram/Paper25811.ht...
- AnthonyMouse 7y ago
  "Induced demand" leads to wrong conclusions in general, analogous to confusing the local maxima produced by a hill climbing algorithm with a global one. It's possible to build enough of anything to satisfy all the demand, even roads. The real problem with roads is the opportunity cost. There are alternative, better ways of satisfying that demand -- like building more housing, so people can live closer to where they work and don't have to drive as far. So what's the alternative, better way of satisfying demand for housing? Nobody has one? Then we ought to build more housing, even if we have to plow through some induced demand (which may or may not even be present) in order to satisfy the full demand.
- swant56 7y ago
  I’m glad people understand that building more housing does NOT work
- swant56 7y ago

xg15 7y ago

I think in the case of hard disk space or internet bandwidth, the blame is less on users and more on developers who seem to see this as an invitation to bloated (but convenient to develop with) data formats or frameworks since "space is now cheap". (Even if it's actually the user's space and not theirs) So the equivalent would be rising prices to eat up any benefit - and exactly that seems to happen. At least there seem to be enough studies about the rise in prices of certain sectors vs the (far lower) rise in income to debunk the "they are just uneducated/undisciplined" hypothesis.

tinus_hn 7y ago
The fact is that people are just storing more. Higher resolution pictures or even RAW files, 4K movies, high quality audio, games with fantastic visuals in enormous worlds. Of course the operating systems and apps are full of bloat but that’s only a small amount of storage, really.

deleted 7y ago

[deleted]

shoo 7y ago

I don't think an analogy that focuses on "capacity" alone is a great one. You want an analogy with both stocks and flows. It's worth checking out Donella Meadows' book "Thinking in Systems: A Primer". here's a rough disk space analogy with stocks and flows: Suppose you have a disk with free space X. What rate do you consume free disk space? What rate do you produce more free disk space? if flow out (of disk space) is larger than flow in (of disk space) then after some finite time you will always run out of disk, no matter how much free space X you started with. More capacity (a larger initial value of X) just buys you more time until the emergency. Which is useful, but you still haven't solved the actual problem in terms of the delta between the two flow rates. Now if you have your flow rates under control, and you produce at least as much free disk space as you consume, what if the flow rates aren't always steady, but have variability? Then having some spare capacity can help to provide slack or buffer to deal with temporary periods where disk is consumed much quicker than usual. But there are diminishing marginal returns to having lots of excess capacity. > Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. --Charles Dickens

scarface74 7y ago
I'd like to improve the financial education of people making decisions in government. Because they've run up a $22 trillion debt. The people in government know exactly what they are doing -they just don’t care. Politicians only care about deficits when their party isn’t in power.

soVeryTired 7y ago

> How many of these cash-poor people genuinely are earning enough to live comfortably vs. don't know enough or don't care enough to build savings, and instead, spend up to their income? Yep. It's obviously ignorance or profligacy. The system is fine, it's the people who are wrong.

siphon22 7y ago
Needs a "/s". I'm still not even sure because that sounds like a legit viewpoint people on HN may have.

lsc 7y ago

so... I've never been really poor, but like most of us, I've had lower income and higher income. Everyone gets unexpected bills, but my experience has been that those bills don't get larger with your income (even though most of your expected bills do grow with income) - a lot of those unexpected bills get smaller in absolute terms as your income goes up; both cars and medical expenses, in my experience, tend to move from 'unexpected bill' to 'expected bill' as your income goes up, as you generally get much better health insurance and newer cars. But even the things that don't move from unexpected to expected are harder to deal with when you are poor. Example; person A makes $14K/yr at walmart. They put away 10% of that every month. person B makes $200K/yr at Facebook. They put away 10% of that every month. Say you get a $250 parking ticket. If you are putting away 10% of your 14,000/yr salary - that parking ticket is gonna be a pretty big bite of your savings. I mean, if you've been putting away $1400 a year, you can cover it, but that $250 is still a big bite. If you work at facebook... say you are still putting away 10% of your $200,000 salary - that parking ticket costs you just as much, but it is a whole order of magnitude smaller when compared to your savings rate. Medical expenses are the more common case for unexpected bills; it's super expensive to get hurt while poor. It's not so expensive to get hurt while wealthy. Say you are playing catch with your kid nephew and you fall and mess up your knee. If you make $14,000, you probably have health insurance with the maximum deductible, and end up having to pay a bunch out of pocket. the 2019 out of pocket limit for an ACA compliant HDHP plan is $6750 - that's going to take a lot of saving 10% to pay off. And even if you do get it fixed, you probably have a job where you have to stand up and carry things; you will need a bunch of time off, time off that you're not gonna get paid for. Say the same things happens to the software engineer making $200K/yr. First, that job probably comes with pretty nice health insurance; you probably aren't out much out of pocket at all. The place where I work offers a HDHP plan but they actually give you an amount of money equal to the deductible every year. (me, I still take the traditional plan, 'cause I'm willing to pay extra if I don't have to deal with medical billing at all) Next? SWE jobs usually come with a bunch of paid time off. This person probably gets paid to recover at home. And if they felt like they needed to work? they probably could work from home; and for that matter, their job probably doesn't involve knees much, so they are gonna be able to go back in to work much sooner than the guy working at walmart.