Comments on: The Redistribution of Wealth http://newsofthestoopid.com/NotS/2008/07/14/the-redistribution-of-wealth/ Fri, 04 Jun 2010 02:02:07 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Gremlin http://newsofthestoopid.com/NotS/2008/07/14/the-redistribution-of-wealth/comment-page-1/#comment-27 Gremlin Thu, 03 Jun 2010 06:53:13 +0000 http://newsofthestoopid.com/NotS/?p=19#comment-27 There's that; and it's a fair point. But also it's math, which is abstract and a bit inapplicable to basic reality. My concern, if it can be called that, is that, given an equal share of the total, most people incapable of getting the money through more conventional means would just burn through it [all the while likely complaining that it wasn't as much as they'd dreamed, so the superrich are cheating somehow] and end up right back where they are now, if slightly more outraged by their continued inability to accept that they were wrong about money in the first place. You actually see this, in smaller numbers, all the time. A given moron wins the lottery—maybe not a huge amount, but say five million bucks; Surprise Number One is a taxburden of around two million, followed by a staggering ability to spend the remaining three million in the course of a couple years. On average, poor people aren't poor because the system's unfair, or even because they can't make the money in the first place; they tend to be poor because they live beyond their means, trying to keep up with a nearly fictional status quo suggested by films and television and everything else Tyler Durden was talking about. Don't get me wrong: I buy stupid, meaningless things, occasionally to the exclusion of more important stuff, like food; the difference is that, when I waste money on stuff I could regret, my first impulse isn't to blame those who handle money more wisely for hanging onto their profits. There’s that; and it’s a fair point. But also it’s math, which is abstract and a bit inapplicable to basic reality.

My concern, if it can be called that, is that, given an equal share of the total, most people incapable of getting the money through more conventional means would just burn through it [all the while likely complaining that it wasn't as much as they'd dreamed, so the superrich are cheating somehow] and end up right back where they are now, if slightly more outraged by their continued inability to accept that they were wrong about money in the first place.

You actually see this, in smaller numbers, all the time. A given moron wins the lottery—maybe not a huge amount, but say five million bucks; Surprise Number One is a taxburden of around two million, followed by a staggering ability to spend the remaining three million in the course of a couple years. On average, poor people aren’t poor because the system’s unfair, or even because they can’t make the money in the first place; they tend to be poor because they live beyond their means, trying to keep up with a nearly fictional status quo suggested by films and television and everything else Tyler Durden was talking about.

Don’t get me wrong: I buy stupid, meaningless things, occasionally to the exclusion of more important stuff, like food; the difference is that, when I waste money on stuff I could regret, my first impulse isn’t to blame those who handle money more wisely for hanging onto their profits.

]]> By: Frictionless http://newsofthestoopid.com/NotS/2008/07/14/the-redistribution-of-wealth/comment-page-1/#comment-26 Frictionless Thu, 03 Jun 2010 02:27:04 +0000 http://newsofthestoopid.com/NotS/?p=19#comment-26 Not for nothing, but the underpinning of most rational theories involving the redistribution of wealth is that a dollar's worth varies based on who possesses it and how they spend it; if you have a dollar and it sits in your bank account (or even better, under your mattress) and isn't used for transactions, that dollar is worth a dollar; if I have a dollar and I use it for a transaction with a company that then uses it for a transaction with a different company, and so on and so forth, that dollar effectively stimulates more growth. This disregards figures concerning the relative value of wealth for those who have already accumulated it; as I have more dollars (as an individual) each dollar's individual importance or value is diminished. For those who have fewer dollars to begin with, the dollar's value is higher given their relative poverty. In short, the reason you redistribute wealth to people who don't have any isn't because you think it will make their lives a paradise - it's because 1) money centralizes over time, and the decentralization of that money can be a powerful stimulant for the economy, and 2) the value of money overall varies based on how many transactions it can be expected to be involved in, and how much money it is surrounded by. Not for nothing, but the underpinning of most rational theories involving the redistribution of wealth is that a dollar’s worth varies based on who possesses it and how they spend it; if you have a dollar and it sits in your bank account (or even better, under your mattress) and isn’t used for transactions, that dollar is worth a dollar; if I have a dollar and I use it for a transaction with a company that then uses it for a transaction with a different company, and so on and so forth, that dollar effectively stimulates more growth.

This disregards figures concerning the relative value of wealth for those who have already accumulated it; as I have more dollars (as an individual) each dollar’s individual importance or value is diminished. For those who have fewer dollars to begin with, the dollar’s value is higher given their relative poverty.

In short, the reason you redistribute wealth to people who don’t have any isn’t because you think it will make their lives a paradise – it’s because 1) money centralizes over time, and the decentralization of that money can be a powerful stimulant for the economy, and 2) the value of money overall varies based on how many transactions it can be expected to be involved in, and how much money it is surrounded by.

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