4 ms·

I think the bigger issue is that people are hording wealth instead of spending it in general making money work for them and not for the greater economy which is

I think the bigger issue is that people are hording wealth instead of spending it in general making money work for them and not for the greater economy which is the only thing giving their money substance long-term. Well, long-term is longer than human lifetime so I guess there's no real reason for them to worry about it either.

johnnyanmac 1y ago
Well yes. That's why trickle down economics doesn't work in practice. Becsuwe billionaires don't stimulate the economy through spending.
boxed 1y ago
I've heard this take a lot and it doesn't make much sense to me. How exactly are ultra rich "hoarding wealth instead of spending it"? Afaik most of the net worth of the ultra rich is in ownership of companies (stocks) or loans (eg bonds). That money is all out there in the world working. Isn't the fact that the ultra rich are using their wealth productively the reason we have growing wealth inequality? Because active money grows faster than inflation, which is why they get richer compared to the rest of us over time.
- kachapopopow 1y ago
  It's more of a problem that the money is only used to make more money rather than being used for services or productive work.
  - boxed 1y ago
    But... money becomes more money precisely because it's invested into companies that sell products and services that people buy, and use most of that money to pay employees, office rent, factories etc. Or in other words: money grows if you use it. If you just put it in a bank account it slowly erodes away under inflation.
    - kachapopopow 1y ago
      that's the catch-22 type deal in the end which makes wealth-inequality the only outcome as the super-wealthy will always benefit more than everyone else when that money is spent and there is no incentive to limit growth personally I think the only real solution is slowing down by reducing incentives to keep growing money (or stock value) by implementing some kind of tax ceiling in turn slowing down innovation and instead hoping that giving more people the ability to grow (easier access to education, healthcare, opportunity) eventually outweights the disadvantages of having such a ceiling
- johnnyanmac 1y ago
  Stock buyback is "spending" that does not in fact increase productivity nor stimulate the larger economy. But it makes them richer. Unrealized stocks that's hoarded isn't doing much of anything in the grand scheme of things. Billionaires have dozens of other things like the above that makes thos an issue
  - boxed 1y ago
    Ok, but after that buyback makes some person richer, what happens then? They can't put that money into a bank account and hoard it because then inflation will eat it slowly. They have to reinvest it into the stock market or something for it to grow.
skippyboxedhero 1y ago
I heard something on here about an investment bubble? There is some kind of bizarre world that we live in that the article has a quote from Ramaphosa, the totality of his extraordinary wealth was generated by corruption, on the terrors of inequality. Hoarding is, generally, not a real problem because it requires believing that wealthy people are not greedy. The problem is that most societies heavily incentivize irrational behaviour through disincentivizing investment. Strangely, these same places also have political cultures that focus heavily on inequality (again, there is no better example than South Africa) because genuine openness tends to be very disruptive politically. There is no way to square the circle. The solutions are known, the problem is that human nature and political culture tends to prevent those solutions being realised (as it is more politically beneficial to continue to sell people lies: it is this group of people, they are the problem, if we can take their money and give it you then you will be rich).
- kachapopopow 1y ago
  well that's pretty much it, people aren't letting their money go, they are only spending money with the sole purpose of making more money.
bawolff 1y ago
Not really. After all that is the point of inflation, to tax people who hoard money.
- kachapopopow 1y ago
  They aren't hoarding it directly, they have it in stocks or other appreciating assets such as gold.
  - bawolff 1y ago
    Stocks is spending money. You are literally giving the money to someone else to help with their business venture.
    - kachapopopow 1y ago
      with the sole purpose of making more money

johnnyanmac 1y ago

Well yes. That's why trickle down economics doesn't work in practice. Becsuwe billionaires don't stimulate the economy through spending.

boxed 1y ago

I've heard this take a lot and it doesn't make much sense to me. How exactly are ultra rich "hoarding wealth instead of spending it"? Afaik most of the net worth of the ultra rich is in ownership of companies (stocks) or loans (eg bonds). That money is all out there in the world working. Isn't the fact that the ultra rich are using their wealth productively the reason we have growing wealth inequality? Because active money grows faster than inflation, which is why they get richer compared to the rest of us over time.

kachapopopow 1y ago
It's more of a problem that the money is only used to make more money rather than being used for services or productive work.
- boxed 1y ago
  But... money becomes more money precisely because it's invested into companies that sell products and services that people buy, and use most of that money to pay employees, office rent, factories etc. Or in other words: money grows if you use it. If you just put it in a bank account it slowly erodes away under inflation.
  - kachapopopow 1y ago
    that's the catch-22 type deal in the end which makes wealth-inequality the only outcome as the super-wealthy will always benefit more than everyone else when that money is spent and there is no incentive to limit growth personally I think the only real solution is slowing down by reducing incentives to keep growing money (or stock value) by implementing some kind of tax ceiling in turn slowing down innovation and instead hoping that giving more people the ability to grow (easier access to education, healthcare, opportunity) eventually outweights the disadvantages of having such a ceiling
johnnyanmac 1y ago
Stock buyback is "spending" that does not in fact increase productivity nor stimulate the larger economy. But it makes them richer. Unrealized stocks that's hoarded isn't doing much of anything in the grand scheme of things. Billionaires have dozens of other things like the above that makes thos an issue
- boxed 1y ago
  Ok, but after that buyback makes some person richer, what happens then? They can't put that money into a bank account and hoard it because then inflation will eat it slowly. They have to reinvest it into the stock market or something for it to grow.

skippyboxedhero 1y ago

I heard something on here about an investment bubble? There is some kind of bizarre world that we live in that the article has a quote from Ramaphosa, the totality of his extraordinary wealth was generated by corruption, on the terrors of inequality. Hoarding is, generally, not a real problem because it requires believing that wealthy people are not greedy. The problem is that most societies heavily incentivize irrational behaviour through disincentivizing investment. Strangely, these same places also have political cultures that focus heavily on inequality (again, there is no better example than South Africa) because genuine openness tends to be very disruptive politically. There is no way to square the circle. The solutions are known, the problem is that human nature and political culture tends to prevent those solutions being realised (as it is more politically beneficial to continue to sell people lies: it is this group of people, they are the problem, if we can take their money and give it you then you will be rich).

kachapopopow 1y ago
well that's pretty much it, people aren't letting their money go, they are only spending money with the sole purpose of making more money.

bawolff 1y ago

Not really. After all that is the point of inflation, to tax people who hoard money.

kachapopopow 1y ago
They aren't hoarding it directly, they have it in stocks or other appreciating assets such as gold.
- bawolff 1y ago
  Stocks is spending money. You are literally giving the money to someone else to help with their business venture.
  - kachapopopow 1y ago
    with the sole purpose of making more money