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Spending on non-essentials happens by people of all income categories, including the hundreds of thousands of 55 year pensioners receiving $100K+ a year from ta

Spending on non-essentials happens by people of all income categories, including the hundreds of thousands of 55 year pensioners receiving $100K+ a year from taxpayers in California. At least the market system is allocating capital to those who are generally better at growing it. The automatic pay raises in the public sector are not mediated by any kind of economic efficiency metric. With respect to tax havens, the problem is when it's public officials that are hiding their wealth, which is why I suggested more scrutiny should be placed on them.

ClumsyPilot 5y ago
"Spending on non-essentials happens by people of all income categories" You are totally missing the point, they are competing for a scarce resource and driving up it's prices only to waste it. They are creating a housing crisis. "market system is allocating capital to those who are generally better are growing it" So 'wealth attrachs more wealth'? That's a benefit in your mind? Not that the capital is used productively, or deployed efficiency in the real world, just that imaginary numbers are growing in a spreadsheet "the problem is when it's public officials that are hiding their wealth" As opposed to Jeff Bezos hiding his wealth? If Jeff has 1,000X more wealth than all of them combined, why are they 'the problem'?
- alanlammiman 5y ago
  In fact, one reason property is scarce and prices are sky-high in London & South-East England more generally is restrictions on new development. In other words - the lack of a properly free market rather than free market excess. London, apart from a few flashy skyscrapers in the City and the odd legacy housing tower is a bunch of low-rise flats and terraced houses. Contrast this to Manhattan or São Paulo.
- CryptoPunk 5y ago
  >>You are totally missing the point, they are competing for a scarce resource and driving up it's prices only to waste it. They are creating a housing crisis. Public sector workers also buy investment properties, just not the most expensive properties with spectacular price tags. And in any case, that can be addressed directly, with a land tax. Any wasteful use of the scarce resource would then be heavily penalized, with those who engage in its waste paying a significant premium to society at large. >>Not that the capital is used productively, or deployed efficiency in the real world, just that imaginary numbers are growing in a spreadsheet Generally, good investments, that produce large private returns, increase the productivity of the economy. If that weren't the case, we wouldn't see such a strong correlation between liberalization of entrepreneurship/private-enterprise laws, and economic growth. See China's pro-market reforms: https://en.wikipedia.org/wiki/Chinese_economic_reform https://en.wikipedia.org/wiki/Chinese_economic_reform Or China's special economic zones. Or South vs North Korea, Or West vs East Germany. Or pre-Chavez and post-Chavez Venezuela. Or the pre-social-democracy and post-social-democracy West.
  - ClumsyPilot 5y ago
    Post social-democracy west had decreasing social mobility and minimal wage growth for 40 years, and OECD and every serious economist has written about this extensively: https://www.oecd.org/economy/outlook/Decoupling-of-wages-from-productivity-november-2018-OECD-economic-outlook-chapter.pdf https://www.oecd.org/economy/outlook/Decoupling-of-wages-fro... "Liberalisation of entrepreneurship" Are we conflating cutting red tape and enabling tax evasion?
    - CryptoPunk 5y ago
      By post-social-democracy, I am referring to the period after which social democracy was instituted, meaning the social democracy era. See the rapid transition to social democracy: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... And you're right, the results have been terrible. >>Are we conflating cutting red tape and enabling tax evasion? I'm making the point that private returns are generally associated with increases in economic efficiency, as evidenced by the correlation between laws permitting private enterprise, and more rapid economic growth. Your earlier comment suggested making money in the market is not associated with productivity increases.
      - cloudfifty 5y ago
        Please find a single respectable historian of economy or similar that shares the view that the current era is the era of social democracy rather than neoliberalism and large scale privatizations of formerly social democratic mixed economies? But since you are HNs most blatant free market fundamentalist (proven by the ridiculous claim above that social spending alone constitutes social democracy, not to even mention the revisionism) I'm not expecting much more than tone policing.
        CryptoPunk 5y ago
        Narratives, popularized by the elite, like the very large and highly paid public sector bureaucracy, are irrelevant to the truth. The truth is revealed by scientific evidence, which in the social sciences, constitutes socioeconomic statistics. What are your thoughts on the statistics I provided earlier, which I'll reproduce here: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... ? >>proven by the ridiculous claim above that social spending alone constitutes social democracy, not to even mention the revisionism You should ask yourself why you are so angry and so intent on trying to discredit my completely reasonable effort to support my position, while the evidence you yourself provided is so absurdly flimsy, like minimum wage (which only affects 4% of jobs) not rising fast enough, and social mobility decreasing (which could very plausibly be due to any number of anti-free-market developments, like 1. growing regulatory restrictions stratifying the position of incumbents in the market, 2. growing government spending creating a more nepotistic economy that favors elite interests, like public sector unions, who tend to have the strongest political connections). I have to ask, given around 40% of the economy now consists of the state, or those funded by it: do you perhaps have a financial conflict of interest in this debate? Do you work in the public sector, or otherwise hold a unionized job, which would make you a direct beneficiary of the state growing its control over the economy? But to your point: the share of the economy that is forcefully redistributed by the state, for the purpose of funding social welfare programs, is in fact a completely reasonable proxy for the extent to which social democracy plays a role in a society. Do you have a more direct proxy? As an aside, trying to gaslight critics of the social democratic establishment with this kind of bad-faith response profoundly damages the public discourse, and I urge you to stop doing it.

ClumsyPilot 5y ago

"Spending on non-essentials happens by people of all income categories" You are totally missing the point, they are competing for a scarce resource and driving up it's prices only to waste it. They are creating a housing crisis. "market system is allocating capital to those who are generally better are growing it" So 'wealth attrachs more wealth'? That's a benefit in your mind? Not that the capital is used productively, or deployed efficiency in the real world, just that imaginary numbers are growing in a spreadsheet "the problem is when it's public officials that are hiding their wealth" As opposed to Jeff Bezos hiding his wealth? If Jeff has 1,000X more wealth than all of them combined, why are they 'the problem'?

alanlammiman 5y ago
In fact, one reason property is scarce and prices are sky-high in London & South-East England more generally is restrictions on new development. In other words - the lack of a properly free market rather than free market excess. London, apart from a few flashy skyscrapers in the City and the odd legacy housing tower is a bunch of low-rise flats and terraced houses. Contrast this to Manhattan or São Paulo.
CryptoPunk 5y ago
>>You are totally missing the point, they are competing for a scarce resource and driving up it's prices only to waste it. They are creating a housing crisis. Public sector workers also buy investment properties, just not the most expensive properties with spectacular price tags. And in any case, that can be addressed directly, with a land tax. Any wasteful use of the scarce resource would then be heavily penalized, with those who engage in its waste paying a significant premium to society at large. >>Not that the capital is used productively, or deployed efficiency in the real world, just that imaginary numbers are growing in a spreadsheet Generally, good investments, that produce large private returns, increase the productivity of the economy. If that weren't the case, we wouldn't see such a strong correlation between liberalization of entrepreneurship/private-enterprise laws, and economic growth. See China's pro-market reforms: https://en.wikipedia.org/wiki/Chinese_economic_reform https://en.wikipedia.org/wiki/Chinese_economic_reform Or China's special economic zones. Or South vs North Korea, Or West vs East Germany. Or pre-Chavez and post-Chavez Venezuela. Or the pre-social-democracy and post-social-democracy West.
- ClumsyPilot 5y ago
  Post social-democracy west had decreasing social mobility and minimal wage growth for 40 years, and OECD and every serious economist has written about this extensively: https://www.oecd.org/economy/outlook/Decoupling-of-wages-from-productivity-november-2018-OECD-economic-outlook-chapter.pdf https://www.oecd.org/economy/outlook/Decoupling-of-wages-fro... "Liberalisation of entrepreneurship" Are we conflating cutting red tape and enabling tax evasion?
  - CryptoPunk 5y ago
    By post-social-democracy, I am referring to the period after which social democracy was instituted, meaning the social democracy era. See the rapid transition to social democracy: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... And you're right, the results have been terrible. >>Are we conflating cutting red tape and enabling tax evasion? I'm making the point that private returns are generally associated with increases in economic efficiency, as evidenced by the correlation between laws permitting private enterprise, and more rapid economic growth. Your earlier comment suggested making money in the market is not associated with productivity increases.
    - cloudfifty 5y ago
      Please find a single respectable historian of economy or similar that shares the view that the current era is the era of social democracy rather than neoliberalism and large scale privatizations of formerly social democratic mixed economies? But since you are HNs most blatant free market fundamentalist (proven by the ridiculous claim above that social spending alone constitutes social democracy, not to even mention the revisionism) I'm not expecting much more than tone policing.
      - CryptoPunk 5y ago
        Narratives, popularized by the elite, like the very large and highly paid public sector bureaucracy, are irrelevant to the truth. The truth is revealed by scientific evidence, which in the social sciences, constitutes socioeconomic statistics. What are your thoughts on the statistics I provided earlier, which I'll reproduce here: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... ? >>proven by the ridiculous claim above that social spending alone constitutes social democracy, not to even mention the revisionism You should ask yourself why you are so angry and so intent on trying to discredit my completely reasonable effort to support my position, while the evidence you yourself provided is so absurdly flimsy, like minimum wage (which only affects 4% of jobs) not rising fast enough, and social mobility decreasing (which could very plausibly be due to any number of anti-free-market developments, like 1. growing regulatory restrictions stratifying the position of incumbents in the market, 2. growing government spending creating a more nepotistic economy that favors elite interests, like public sector unions, who tend to have the strongest political connections). I have to ask, given around 40% of the economy now consists of the state, or those funded by it: do you perhaps have a financial conflict of interest in this debate? Do you work in the public sector, or otherwise hold a unionized job, which would make you a direct beneficiary of the state growing its control over the economy? But to your point: the share of the economy that is forcefully redistributed by the state, for the purpose of funding social welfare programs, is in fact a completely reasonable proxy for the extent to which social democracy plays a role in a society. Do you have a more direct proxy? As an aside, trying to gaslight critics of the social democratic establishment with this kind of bad-faith response profoundly damages the public discourse, and I urge you to stop doing it.