How do you feel about income inequality?

[Starbuck]

OK. I'll pay you $15 per value unit. Fair enough?

I'd probably like to know what it is for, but otherwise sounds great to me, just deposit it into my value account.

 

[rabbitcaebannog]

No. It isn't. You seem to propose some government action to level the income of all people. What I stated that needs to be done, or more accurately should be stated as undone, are to reverse the actions that have already been taken by the government that have created economic problems in this country. In other words, to fix what the government has already screwed up.

So, again... no. No contradiction.

First, I never proposed leveling the income of all people. That sounds like a strawman you constructed. Secondly, the economy imploded due to deregulations which was a lack of government oversight.

 

[Perotista]

No, it's completely true. I've always been a sucker for Cadbury Bunny Eggs, and to this day (though I haven't seen a commercial in years) the the thought of those commercials makes me want to impulsively buy some.

It's not just the positive campaigns that work well either though, it's also the negative ones.

The same sort of negative campaigning that sunk Sarah Palin in 2008 worked on John Kerry in 2004.

Yep, I understand. There are a lot of gullible people out there. Call it bumper sticker advertisement over substance.

 

[Starbuck]

Do your landlords rent to you at a financial loss? Doubtful. You pay for it one way or another. There may be good reasons to rent instead of buy, but sometimes there are good reasons to buy instead of rent. Just gotta do your homework relative to your personal situation and goals.

Considering the amount I pay for rent, I'm quite sure that they make a lot of money off of me.

However, I pay for convenience. When the apartment building goes into triage, I don't have to lift anymore than a telephone.

Although, I'd argue that there are some long-term financial benefits to renting. Namely, freedom of movement, freedom from incurring high dollar value repairs/ improvements, and freedom from dealing with the property in the event of a total loss situation.

 

[Starbuck]

Yep, I understand. There are a lot of gullible people out there. Call it bumper sticker advertisement over substance.

Exactly, and unfortunately that's part of what makes the world go round.

I always pay more attention to specific voter initiatives than I do to who's on the ballot.

 

[joG]

So, you're not going to site your specific source?

Why? It is general knowledge. It is absurd to want a specific reference. Or aren't you knowledgeable of the growth in countries like Vietnam, China, India or South Africa?

 

[Eric7216]

Really don't care about income inequality. To me the key is how well I am doing and how well the general welfare is doing. I would rather live in the US and have the average income of $50K a year than in Laos with their per capita income of $3K/yr or Denmark with their per capita income of $37K/yr (and cost of living c. 20% higher).

And I really have a hard time understanding GINI coefficient. In the US. the top 10% make 30% of the income while the bottom 10% make 2%. Sounds bad. But in Denmark, with their great GINI, the top 10% make 28.7% and the bottom 10% make 1.9%. Almost the same. Yet Denmark has a GINI of 24.8 and the US is 45. (CIA World Factbook stats).

Capital (money) is needed for investments and research. The rich tend to be the people who can invest in such stuff while lower income people use their money for consumption. To advance, a country must have capital resources to create corporations. When I look at the countries that have a lot of rich people I see countries that have a higher standard of living.

It would be nice if people followed Andrew Carnegie's example and spent the final third of their lives giving their wealth away but I don't see how a country can legislate that without unintended consequences and the flight of capital.

 

[Perotista]

Exactly, and unfortunately that's part of what makes the world go round.

I always pay more attention to specific voter initiatives than I do to who's on the ballot.

Huh, we usually do not see that down here. In fact if I understand you right, I do not think I have ever seen one of them on the ballot. Now we have a ton of Georgia constitutional amendments, but those are all thought up by the Governor or state legislature.

 

[Eric7216]

Really? How so?

Regarding

Unfortunately, the movement to decrease income inequality seems to be based in processes that limit income mobility so they tend to make things worse rather than better.

I don't have a good answer but perhaps it has something to do with charts that show the modest, if any, gains as people earn more money, due to offsetting declines in government assistance programs. The lowest 20% get an average of $24K in government assistance to go along with their working income while the 2nd lowest 20% only get $8K in government assistance. It is not until you make more than $60K a year (depending on your state and number of dependents) that you start getting more when you earn more. There is lack of incentives. The CBO estimated that the equivalent of 2.5 million jobs would be loss due to the ACA as people reduce their hours at work. The is anecdotal evidence about people reducing their hours working as the minimum wage goes up.

If you believe as I do that the path to wealth (at least modest wealth) is savings and investing (and not spending) then government assistance tends to reduce real income that people can save. They reduce their own hours.

FDR had it right in his 1935 SOTU Address when he stated that welfare is a narcotic that destroys the human spirit. He advocated work for the poor. Now we advocate welfare and assistance.

It is interesting that worsening of the GINI coefficient arguably seems to occur slightly more during Democratic Administrations. GWBush increased from .462 to .466 while already under Obama it increased from .466 to .477. Under Reagan it increased .403 to .426 while under Clinton it increased from .433 to .462.

https://www.census.gov/hhes/www/income/data/historical/inequality/ (Table H-4)

 

[Neomalthusian]

Considering the amount I pay for rent, I'm quite sure that they make a lot of money off of me.

However, I pay for convenience. When the apartment building goes into triage, I don't have to lift anymore than a telephone.

Although, I'd argue that there are some long-term financial benefits to renting. Namely, freedom of movement, freedom from incurring high dollar value repairs/ improvements, and freedom from dealing with the property in the event of a total loss situation.

I don't necessarily disagree that there could be financial benefits to renting, or that it's wrong to voluntarily pay extra for convenience, but that doesn't necessarily mean you're saving money, it just means you don't really notice that you're basically financing the repairs and maintenance over time via a rent check.

And I'm not sure what you mean by total loss situation, as homeowners insurance will typically provide good security against that.

Homeownership is not for everyone. People who go deeply into debt and pay tens or hundreds of thousands of dollars just in interest to a bank for their mortgage and then face high-dollar repairs because their home has some deficiencies or upgrade needs, and say they don't have very good job stability or prospects, the area is going in a bad direction economically -- this could all combine to spell disaster. But other circumstances are potentially the opposite. Some people's homes appreciate and the rent vs. buy analysis swings strongly toward buy and away from rent. On a personal note, we're outright homeowners and so while we do spend big bucks sometimes on upgrades or repairs, we pay a little over $2,000 a year (averages to $175 a month) in taxes and insurance and the rest is money in the bank. We save up the cash to buy the things we want and need. As such, even if professional bad news came our way, we could hang on a lot longer in this home that we own outright than we would if we were renters. However, we have also lived in housing markets where we would have been IDIOTS to try to buy something.

 

[Starbuck]

Huh, we usually do not see that down here. In fact if I understand you right, I do not think I have ever seen one of them on the ballot. Now we have a ton of Georgia constitutional amendments, but those are all thought up by the Governor or state legislature.

Yea, they do that a lot down here.

I've got mixed feelings about the concept, I've seen it go both good and bad. Ultimately though I think it's a pretty good way to ultimately resolve an issue.

 

[Starbuck]

I don't necessarily disagree that there could be financial benefits to renting, or that it's wrong to voluntarily pay extra for convenience, but that doesn't necessarily mean you're saving money, it just means you don't really notice that you're basically financing the repairs and maintenance over time via a rent check.

For me convenience is a very big thing. All things being equal, my time is worth a significant amount of money to me, and I'll gladly pay extra to save some of it. As far as savings goes though, we we looked into buying when we moved a few years ago and once added up, the benefits of renting financially outweighed the benefits of buying:

Renting:
Limited utilities
Rent
Renters Insurance


Buying a home:
Financing cost
Down Payment
Homeowners insurance
Property Taxes
Additional utilities
Property repairs

It is true that we feel the burden of repairs through the price of rent, but we are ideal renters and property managers are usually loath to mess with easy tenants.

And I'm not sure what you mean by total loss situation, as homeowners insurance will typically provide good security against that.

Thing is, in that scenario there is a lot of work to do on the part of the home owner. As renters we can basically walk away with our insurance money. Again, for me time is money and heartache probably could be quantified for that matter.

But other circumstances are potentially the opposite. Some people's homes appreciate and the rent vs. buy analysis swings strongly toward buy and away from rent. On a personal note, we're outright homeowners and so while we do spend big bucks sometimes on upgrades or repairs, we pay a little over $2,000 a year (averages to $175 a month) in taxes and insurance and the rest is money in the bank. We save up the cash to buy the things we want and need. As such, even if professional bad news came our way, we could hang on a lot longer in this home that we own outright than we would if we were renters. However, we have also lived in housing markets where we would have been IDIOTS to try to buy something.

That is a very good point, and from an investment perspective there are definitely some very good reasons to consider buying. There was one house we really liked, and probably could've bought, but when the bank dropped the words 'thirty years.' The nomad in either of us ran for the hills. I do realize that is really our problem and not the concept of homeownership though.

Besides, for us and in this area, we were able to acquire a much better view from a rented apartment than we would've from buying a home.

 

[Perotista]

Yea, they do that a lot down here.

I've got mixed feelings about the concept, I've seen it go both good and bad. Ultimately though I think it's a pretty good way to ultimately resolve an issue.

Yeah, let the people vote and then have the courts rule against them.

 

[Neomalthusian]

For me convenience is a very big thing. All things being equal, my time is worth a significant amount of money to me, and I'll gladly pay extra to save some of it. As far as savings goes though, we we looked into buying when we moved a few years ago and once added up, the benefits of renting financially outweighed the benefits of buying:

Renting:
Limited utilities
Rent
Renters Insurance

Buying a home:
Financing cost
Down Payment
Homeowners insurance
Property Taxes
Additional utilities
Property repairs

The utilities cost what they cost, either you pay them yourself or the cost is absorbed into the rent check (as is everything else, in theory). The home we own has limited utilities in that it's just electricity, garbage and phone and internet (if you count those). Water is natural, sewer is septic tank and field, and heat is firewood that I cut and split myself.

The down payment is not an expense, it's a transfer of one asset (cash) into another asset (home equity). The debt service cost is an expense and so that's a big one to consider. The rest of those are awash (unless you are the lucky beneficiary of a generous or financially unintelligent landlord) because you're absorbing them into a rent check that does not result in any equity.

Thing is, in that scenario there is a lot of work to do on the part of the home owner. As renters we can basically walk away with our insurance money. Again, for me time is money and heartache probably could be quantified for that matter.

That's a good point, if you hate property maintenance and are tolerant of whatever the features of where you live, the chores and expenses of homeownership are a downside. If you like property maintenance and the control over the features of where you live, it's an upside.

Our home is new and very well built but had some very poorly designed features, so we took a crowbar to them. Took a wall out of kitchen and opened it up to the rest of the living space, and remodeled the ridiculously laid-out bathroom. Those two things cost us maybe $5,000 and two weekends, but probably improved the value of the home by $15,000. The ability to improve the property economically is satisfying to me and not a financial drawback (unless I royally eff something up, which hopefully doesn't happen).

That is a very good point, and from an investment perspective there are definitely some very good reasons to consider buying. There was one house we really liked, and probably could've bought, but when the bank dropped the words 'thirty years.' The nomad in either of us ran for the hills. I do realize that is really our problem and not the concept of homeownership though.

Besides, for us and in this area, we were able to acquire a much better view from a rented apartment than we would've from buying a home.

Well I certainly remember what that was like, and if we were still in those other housing markets I mentioned, we'd be in the same boat. My wife was the less likely of us to desire ownership, as her visceral reaction to being tied to one place and having the chores and financial obligations and whatnot made her feel ill. But now that we're owners and I've finally had an opportunity to prove to her that I can fix and build stuff and gather heat for the home and actually enjoy it all, it worked out.

 

[rabbitcaebannog]

Why? It is general knowledge. It is absurd to want a specific reference. Or aren't you knowledgeable of the growth in countries like Vietnam, China, India or South Africa?

I'll wait for a source otherwise I'll chalk it up to GIGO.

 

[rabbitcaebannog]

Regarding

I don't have a good answer but perhaps it has something to do with charts that show the modest, if any, gains as people earn more money, due to offsetting declines in government assistance programs. The lowest 20% get an average of $24K in government assistance to go along with their working income while the 2nd lowest 20% only get $8K in government assistance. It is not until you make more than $60K a year (depending on your state and number of dependents) that you start getting more when you earn more. There is lack of incentives. The CBO estimated that the equivalent of 2.5 million jobs would be loss due to the ACA as people reduce their hours at work. The is anecdotal evidence about people reducing their hours working as the minimum wage goes up.

If you believe as I do that the path to wealth (at least modest wealth) is savings and investing (and not spending) then government assistance tends to reduce real income that people can save. They reduce their own hours.

FDR had it right in his 1935 SOTU Address when he stated that welfare is a narcotic that destroys the human spirit. He advocated work for the poor. Now we advocate welfare and assistance.

It is interesting that worsening of the GINI coefficient arguably seems to occur slightly more during Democratic Administrations. GWBush increased from .462 to .466 while already under Obama it increased from .466 to .477. Under Reagan it increased .403 to .426 while under Clinton it increased from .433 to .462.

https://www.census.gov/hhes/www/income/data/historical/inequality/ (Table H-4)

Am I understanding you correctly? Do you think there is a lack of upward mobility because people want to collect welfare?

 

[Papa bull]

Am I understanding you correctly? Do you think there is a lack of upward mobility because people want to collect welfare?

I think you might be misunderstanding the situation. The fact that there are people who would rather keep getting government checks for doing nothing than getting paychecks for working doesn't have anything to do with a lack of upward mobility. It has to do with not taking advantage of that opportunity.

 

[rabbitcaebannog]

I think you might be misunderstanding the situation. The fact that there are people who would rather keep getting government checks for doing nothing than getting paychecks for working doesn't have anything to do with a lack of upward mobility. It has to do with not taking advantage of that opportunity.

Okay, good so equating welfare with the discussion is a red herring.

 

[Papa bull]

Okay, good so equating welfare with the discussion is a red herring.

Possibly. You can argue that point with him if you'd like.

 

[Beaudreaux]

First, I never proposed leveling the income of all people.

Then this entire thread is irrelevant. Why even start it?

That sounds like a strawman you constructed.

It was a reasonable deduction from your numerous posts in this thread.

Secondly, the economy imploded due to deregulations which was a lack of government oversight.

You may want to do some research on your own. Focus on Freddie Mac and Fannie Mae and the pressure put on them and the banks by Congress through legislation to loan money to poor people - and then look up the two laws I quoted for you. Those two together are what caused the collapse, not just deregulation as the anti-capitalists would have you believe. Do your own research. It's free and on the web.

 

[Mithrae]

First, I never proposed leveling the income of all people. That sounds like a strawman you constructed.

Then this entire thread is irrelevant. Why even start it?

And why bother talking about freedom unless you are advocating the removal of all laws, amiright? Those people who can think in shades other than black and white are just weak!

 

[imagep]

Well since the work force in America is dwarfed by the entitlement class I would say you are way off base. Businesses are avoiding the hiring of many who are not worth it, and if the minimum wage were lower they could take on some of those cases. Of course you'll run off to the extreme of seniors, children or extremely disabled but I'm talking the millions of capable who don't bother so long as the left buys their food, healthcare, phones, shelter, and votes.

While I disagree with means tested welfare as much as any ultra right conservative (means tested freebie benefits shouldn't exist), I really don't think that the work force is dwarfed by the "entitlement class". Where do you get that from?

And I really wouldn't hire anyone who doesn't produce at least $30/yr in productivity, regardless of what min wage is. I'm not a baby sitter. I once fired an employee that I only paid half of minimum wage -he was a federal program employee, I paid him min wage but the government reimbursed me for half his wage, the guy wasn't worth half of min wage, he had a negative value to me, if the government paid all of his wage I would have still fired him.

 

[imagep]

Allow it? As opposed to what exactly?

As opposed to many things.

Like supporting unions. Or individually demanding higher wages. Or supporting having a more progressive tax system, or supporting increases in the minimum wage.

 

[Lakryte]

If income inequality is caused by natural market forces, then there is no problem. If it is caused by some type of government abuse (such as policies that harm poor incomes more, subsidizing and bailing out corrupt corporations allowing them to screw people over, etc.) then that is where the problem lies. The bigger issue is economic mobility. If people cannot move up in the system, then there is a problem.

People are different. They will make different life choices, have different skills to begin with, and end up with abilities that may make more or less money. Equity should always be more of a concern than equality.

 

[imagep]

Yep, I understand. There are a lot of gullible people out there. Call it bumper sticker advertisement over substance.

These days all you have to do is to post something on the internet and it will spread and millions will accept it to be factual, even if it doesn't. make any sense.

A while back I was eating a meal with a group of friends and one of them said that what upset them about Obamacare was that muslums are exempt from it. For some reason that didn't seem quite right to me, but two or three other people chimed in insisting that it was true because they saw it on the internet.

The next week someone shared a facebook post that made the same claim, I googled it and found a half dozen fact checking sources that all confirmed that it was not true. I posted links to all of those sites, then was flamed by a dozen "friends" for rubbing it in that the post was incorrect.

Who would have thunk, but apparently it is not acceptable by facebook etiquit to point out lies.