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User Shaqbark had a great comment about the notion that the rich don't have enough money to put a dent in the financial problems:

Fire@will writes:

[The "rich" don't have enough money to make everyone else rish. Confiscate all the wealth of the wealthiest ten percent and I'll bet it would not pay our debts for a month. Then what?]

From http://en.wikipedia.org/wiki/Distribution_of_wealth:
The United States is one of the richest countries in the world, and in 2000, the mean wealth was $143,727 per person.[10] In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

Hence, the rich actually DO have enough wealth to make EVERYONE in the US rich - if it were possible to redistribute this wealth without causing massive inflation, which it would not be.

One of the best-kept secrets of the rich is that being wealthy (not just having lots of zeros in your bank balance, but being able to have a life of leisure, space, and privacy) requires other people to be poor.

 
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Nov 13, 2008
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Nov 3, 2008
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Oct 6, 2008
Hi Scott,

please try to see it from another perspective: If people can afford their lives, they are less likely to commit a crime (the poor person does not need to steal to feed his family). Or, to rephrase it: How much would it be worth for you, if somebody reduced the risk that a crime is done to you by let's say 10%?
 
 
Sep 26, 2008
The conservative's dream world means that the poor take care of themselves. What was really amusing was watching Cindy McCain talk about how communities should be responsible for taking care of their poor - the typical emotional argument that is utilized to make you feel outraged that your hard earned money is going to help someone else.

The question starts not with, "Who should be paying?" Rather, it starts with, "Should we help our poor and needy?" If your a sadist, then the answer is "No". If you're a regular human being, you probably nod your head in agreement.

So let's say that the government cuts social spending for silly things like unemployment, drug rehab, food stamps, etc. and tells the communities that it's in their hands now. Well - that leaves a few sources for people still. Churches, community organizations, whatever. But they need money too. So where does this money come from? The poor can't pay for it themselves, and poor communities can't fund it, so I guess those that can afford it have to pay. I suppose that neighbors, family members, friends, etc. could help out. But then they need money too. Their hard-earned money. And most of them can't afford it, nor do they have time. I suppose if taxes were lower, but money still has to come from somewhere.

The bottom line is - if you're going to provide for things like taking care of your homeless, having adequate police protection, educating your children, that money has to come from somewhere. And why shouldn't more if it come from the upper crust of society?
 
 
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Sep 24, 2008
!$%*!$%*!$ Rich people do not require poor people.

Where are the "poor" in the U.S? Our "poor" have cell phones, tvs, housing, clothes, good water, plumbing, comfy beds, education, emergency health care, regular health care. . .

The people of Bangladesh can tell you poor.

And yet we are the wealthiest nation on earth.

Obviously it is benefiting us all.
 
 
Sep 24, 2008
When you run the numbers, the results are interesting:

Assuming 300 million people and average distribution:

The top 10% each have 1.02 million on average

The top 1% each have 5.5 million on average

The bottom 40% each have 3,600$

I can believe this, lots of people have negative net worths. This is because their debts are higher than their assets, school loans are a great debt with no asset to offset it. Another drag is car loans, the loan is almost always more than the car value.

Net worth is about spending, not earning. I know lots of people that make more money than me, and they have far fewer assets than me. I paid off my house because I drove a cheap car. I didn't buy a nice TV until I could pay cash. I didn't have expensive cable TV.

I left an average high school with average grades, about 6,000$ for college and a used car.

I expect to be in the top 10% by age 40 (4 more years). I hope to share as little as possible with people driving expensive SUVs and living in large houses because they cannot manage their money.

BUT, as someone pointed out, taxes are paid on salary, and not on net worth. High wage earners pay lots into taxes, and often spend most of what remains. Not much net worth left for them.
 
 
Sep 24, 2008
My research indicates that for the most part the general public is blissfully unaware of the true levels of wealth held by a small handful that control the world economy. These robber barons maintain a low profile so as not to draw attention to their dealings or holdings. Try to follow the paper trail of ownership of some of the largest assets in this country some time. The path of ownership is convoluted and and buried in countless corporations and subsidiaries, many of which are off shore. The big boys have been raping economies and stashing away civilization's wealth for generations and are beyond the reach of government since they basically control and dictate to every government. The military/industrial complex sees to it that each year congress hands them vast sums of the treasury's wealth. ie, our tax dollars. Take this 800 billion dollar bail out for this housing debacle. Do you believe there will ever be any accounting of just where that money goes ? If you do then you should do some research on the billions and billions that have gone unaccounted for in Iraq.
For centuries the masses have been nothing more than pawns for the few that control the world's wealth. But, all this media and American educational system inspired "wisdom" many of you use to formulate these posts makes for entertaining blog reading i suppose. Ok, I feel better now, the prozac is starting to kick in.
 
 
Sep 24, 2008
All right, I'll bite.

I'm a guy who's big on the concept of social justice. As such I feel that there should be some way -- perhaps partly through the government -- that people should get their basic needs taken care of. It might thus make sense that rich people get taxed a bit more for that purpose. Furthermore, they can afford it.

Beyond basic needs I don't really see it as a huge issue, honestly. Trying to redistribute wealth might be bad for the economy, and raising the standard of living to improve perceived quality of life only works so well. Much like how computers generate a whole bunch of work despite making certain tasks easier, more money doesn't really make a person happier (I recall some study being done on this by some guy on the Colbert Report -- I think they might be willing to hear you discuss your recent survey, and since it's live, it can't be that much different from your average public speaking gig, which I understand you've never really had a problem with). As such, trying to redistribute wealth will cause more problems than it will solve similar to what a bunch of people around here have noted.

I mean, I can live in a society that's not Harrison Bergeron-influenced, and live with the fact that there will likely be many people with more money. At the same time, there may be people out there with less income who are happier than I am. To be quite honest, I'd pick happiness over a quick buck any day. (Does this mean that one can buy happiness inasmuch as I have placed an opportunity cost on it? Hmm...)

I mean, it's going to be hard not to tax the more wealthy people just to get the country out of its current habit of extreme deficit spending. While defaulting on our currency isn't likely (one of the benefits of being a large nation that produces a lot of stuff is that a lot of people depend on our economy having at least some semblance of strength, so nobody would let this happen), it could be enough to screw us over financially for a long time.

EXECUTIVE SUMMARY: If the government won't tax the wealthy it probably won't have enough money to support the federal budget, especially now that all the banks are bleeding to death. I think that the money would be better in places other than poor people, who won't necessarily be able to manage it well, for the most part, but I DO think that everyone should be guaranteed to have their basic needs provided for, as that will improve perceived standard of living, but beyond that it's just giving a random guy on the streets a bunch of cash and hoping that he'll spend it well.
 
 
Sep 24, 2008
Wow, if I'd known my comment would be promoted to post, I'd have taken more time writing it.

I didn't mean that we should redistribute wealth. I merely observed that the wealth was there. (I even pointed out, twice, that redistributing it wouldn't work.) Combining this observation with Scott's idea of motivating the rich to give up some of their wealth could be useful.

That $143,727 per person is about $600,000 per family. That's a nice chunk of change.

But truthfully, I was focusing on the % figures, and didn't notice (even as I typed it!) that the mean was only $143,727 per person - because that figure doesn't work. Since the bottom 40% has only 1% of that, that means they have $1437 in assets. Is that possible? Is 40% of America homeless and clothed exclusively from the Salvation Army? Cable TV service alone costs $600/year. And since 9 out of 10 Americans surveyed (http://www.scoop.co.nz/stories/WO0705/S00103.htm - adults? heads of family? I don't know) say they own a car, that means 4 out of 10 drivers own junkers worth less than $1000. I think the "wealth" figures I was using must count only liquid assets.

I didn't mean being rich requires others to be in poverty. But it does require them to not be so wealthy that they won't clean your house and fix your car and mow your lawn, which means that redistributing wealth won't really make everyone wealthy. Technology may change this.

One of the main purposes of wealth is to provide men with access to the best women. And they are a limited resouce. (Technology may change this, too; depending on what you look for in your women. If it's charm and wit, you have a long wait ahead of you.)

It also provides more-interesting friends. I've noticed, for instance, that rich and famous scientists (my background) seem to know all the other famous scientists, and often have them over for dinner. Interesting people are a limited resource. Technology won't change this, because even if we can make everyone more interesting, their interestingness will still be distributed along a bell curve.

The phrase "leisure, space and privacy" was poorly-chosen. "Wealthy" means being able to live in a city AND have space and privacy - and only a small number of people can do that. That's not economics; it's geometry. Technology is unlikely to change this unless Dilbert's garbageman develops a teleporter.

So, how can we motivate the rich to give up their wealth? Scott mentioned letting them have more votes in exchange for money. The logical extension of this would be to let everyone sell their vote to whomever they wanted to, at market prices. Then rich folks could buy as many as they wanted. Some would complain that this would take votes away from poor people. But if a poor person believes that a little cash in hand would help him more than having a tiny chance of influencing which liar represents him, who are we to say he's wrong? The main downside would be how angry everybody would get when they discovered that their right to vote fetched only $3.75 on the open market.

I like the idea of having them fund government projects and get equity. Only, wait, we could give them tax deductions instead of requiring them to do it. But, wait, we do that already.

How about selling someone concession rights on government property? How much would Donald Trump pay for advertising space on the Washington Monument? (Or, say, the Trump Monument?)

Russia sells space flights for $30,000,000 a pop. If NASA crammed 5 rich people into the Space Shuttle's cargo bay and charged them $30,000,000 each, we'd only be losing $300,000,000 per shuttle flight!

Late medieval European nations balanced their budgets by selling government offices. (How much would Goldman-Sachs pay to choose the next Treasury secretary?) It turns out that this has disadvantages, such as your nation collapsing in revolution because it is run by morons and swindlers. But if this is going to happen anyway, we might as well make some money off it.

Solutions that rely on market forces, of the kind that libertarian economists think up, seem to cost a lot. The problem is that you have to exchange something of equal value. There should be some way to motivate rich people that relies on stupidity instead of market forces. Come up with something that only the government can provide, that doesn't cost anything, but that can signal status. Something like those pink cars that Mary Kay gives out to its best salespeople, only cheaper. Like a "Most Valuable Taxpayer" bumper sticker. Then hire a marketing firm to convince people that they are hopeless losers if they don't have whatever it is.
 
 
Sep 24, 2008
A great many people's opinion on this (and other issues) seems to based on how it would effect them individually.

A poor person who pays no taxes may thinking raising taxes on the rich is in his best interests (and that he is poor because of bad luck or some basic unfairness). The rich person naturally feels they are already bearing an unfair burden (and that he is rich because he works harder, is smarter or favored by a Supreme Being).

Ask a poor guy how much taxes ought to be taken out if he wins a hundred million dollars in the lottery. I'm guessing that his answer will be closer to "none" than to what it really would be.
 
 
Sep 24, 2008
The economy isn't a pie of a fixed size, where your bigger piece means I have a smaller piece. The pie grows and shrinks in size. But then the govenment steals 88% of it and spits on the rest and we are left with the crumbs.
 
 
Sep 24, 2008
While technically true, this is somewhat misleading. To have rich people, you do need a system where innovation is rewarded and some people will try and succeed, and some try and fail. Income inequality is certainly a byproduct of capitalism, the best way to allocate resources that anyone's come up with so far.

But there is nothing inherent about capitalism that mandates *lots* of people be poor, or that even that anyone has to be cripplingly poor. There is no reason you can't combine capitalism with some sense of social justice. I'd argue that to the extent we have these sorts of problems in this country, it's because the Federal Government insists on subsidizing producers and sectors instead of people. If they're going to spend my money, I'd rather they do it investing in health care and life-long education for citizens instead of propping up sugar producers and giving tax breaks to oil companies and hoping that individuals can come along for the ride.
 
 
Sep 24, 2008
Finally, I am somebody!!!! I have left a comment, and therefore have made my mark in this world!!!

Hey, why is that music playing so loudly? Are you trying to get me off the stage?? What the--

[remainder of comment deleted due to sheer boredom]
 
 
-1 Rank Up Rank Down
Sep 24, 2008
$143,727 is not rich. It's not even close to rich. That's only about 3 years of income (per capita average).

Shaqbark, do you honestly believe that $143,727 is rich? How much do you plan on saving for retirement? Are you planning on saving $150K, calling yourself rich, and then retiring? If so, you are in for a very rude awakening.
 
 
Sep 24, 2008
Communism proved that redistributing wealth does not work. Basically, if working harder does NOT get you more, then you are not motivated to work harder. China has really experienced an economic boom because they finally changed to allow people to "profit" from their labors. The compassionate conservative view was that people would contribute a portion of their wealth voluntarily to solve the issues of those that don't have $$$. In practice, this does not work for the same reason that communism fails. Why would I work hard to give it away to someone who might be working less hard? Trickle down economics is never going to be an efficient way transfer wealth to the poor ... on the other hand, it is a great way to transfer wealth to the rich.
 
 
Sep 24, 2008
Once they start taxing Scott more you'll suddenly see some changes in the Dilbert comic strip: Dogbert replaced with Beaverbert, Wally's coffee will be replaced with maple syrup, Alice will start eating poutine, and Dilbert will be driving a hybrid snowmobile to work. All because Scott will be relocating to Canada to avoid losing his millions.
 
 
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Sep 24, 2008
I am not included in the 'rich' category, but why would I have ANY incentive to work hard, save my money, and to grow my nest egg if I were FORCED to redistribute it to those that work less hard than me and/or made more stupid decisions (or did not learn their lessons from their mistakes)? What Scott as equivocated to inspire a discussion has brought out something with human nature: when times are good, ignore any problems that are eroding the foundation of what's good; when times are getting or looking worse, bring on communism. What we are seeing today is a result of decades and decades of more and more government control and socialism. Does anyone really thing more of this will help in the long run? So much for the freedoms we supposedly love so much.
 
 
Sep 24, 2008
Cue the supply-side economics supporters.
 
 
Sep 24, 2008
I'm so tired of hearing all the garbage. Rich people already do share their wealth. Any money a person invests goes toward creating jobs for others. That is the very root of investment in our monetary system. Now if rich people all just kept their money in a closet, that really would be not sharing it. Also, if that wealth was taken from the rich and given to the poor, the decrease in investment of the economy and liquidity to the financial markets would put the country in a depression and then those poor people would have no jobs and continue to require more and more assistance. Meanwhile the rich people would be able to live off their wealth for a while, but as more and more wealth was taken from them to give to the poor the problems would only get worse for the economy and the standard of living.
 
 
+2 Rank Up Rank Down
Sep 24, 2008
I'm not so certain that "wealth" as defined in the article is even something the government could redistribute. I very much doubt that the wealth is cash that is laying around.

Is the wealth land that you would take from the owner? If you granted me 10 acres in Oregon, I wouldn't feel much wealthier (as I live in SC). Is it a business that the government would "take", or would it be dismantled to share its assets (which would be much less than the value of the company). And that could leave me jobless...

Let's see what Washington comes up with before we assume the worst. The Chrysler bail-out (way back in the Carter days) was the source of a lot of wailing and hand-wringing, but the money was paid back with interest.
 
 
 
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