Comment by uoaei | Hacker News Reader

Comment by uoaei | Hacker News Reader

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Productivity has been rising steadily pretty much since they started keeping track of it, while the median family income has stagnated over the past 40 years or so.[1] Productivity is defined as the ratio of the volume of outputs to inputs, or equivalently, the "money out to the money in." If the money is not going to the median families, where is it going? It certainly isn't going to the lower class. It is going to the upper class, and is seen as a "concentration of wealth" since the money is all going into more or less the same pockets (the fuzziness of the wording is due to the fact that sometimes people die and other people become richer to move into the upper class).

To come to the challenge posed in your comment, let's examine some other indicators of inequality.[2] The top 1% holds around 42% of the wealth. Meanwhile, the bottom 50% holds around 1% of the wealth. Doesn't that seem a bit ... unequal? Of course, to have valid concepts of "top 1%" inequality must of course exist on some level, but the disparity is staggering. There are 160 million people in the bottom 50%, and about 3 million in the top 1%.

The average person in the top 1% holds about $2240 for every $1 belonging to the average person in the bottom 50%. The price of a $1m car to the top 1% is on par with the cost of a current-gen gaming console (~$450) to the bottom 50%, on average.

Even without getting into the top 0.1% and their obscene amounts of money hoarding, this is a lot. We can go there too if you want.

We could also just ask the people who arguably have the best access to such data: the Congressional Budget Office.[3] The graphic on the front cover is enough to illustrate the difference, but you can also go through the findings in the body if you need more convincing.

All of this is freely available on the internet, and found with Google via "total wealth in the us". Either you didn't know this was possible, or you don't want to know the facts.

[1] https://en.wikipedia.org/wiki/File:Productivity_and_Real_Med...

[2] https://en.wikipedia.org/wiki/File:U.S._economic_variables_r...

[3] https://www.cbo.gov/sites/default/files/114th-congress-2015-...

You're missing the point entirely. I'm not saying inequality doesn't exist. Of course it exists.

I'm asking again: What happens if we take the wealth not just from the top 1%, but the top 10%, then spread it among the rest? How much does everyone get? Would it be a life-changing amount of money?

As of 2013, the top 10% of people had 85% of the wealth and the bottom 90% of people had 15% of the wealth.[1] FRED says the total net worth of households and nonprofit organizations was $79 trillion.[2] The population of the US at the end of 2013 was around 317 million.[3]

Crunching the numbers, we can determine that the top 10% had $67.15 trillion. If this full amount is distributed equally to every person in the bottom 90%, as the question states (let's call this the "kill the bourgeoisie" scenario), each person in the bottom 90% would receive $235,000 on average.

If we wanted to forcefully distribute the money while leaving the people at the top intact (let's call this "blunt force redistribution") such that the current top 10% has 10% of the wealth, then each person in the bottom 90% would receive $208,000 on average.

I would definitely consider this a life-changing amount of money.

[1] http://www2.ucsc.edu/whorulesamerica/power/images/wealth/Net... via http://www2.ucsc.edu/whorulesamerica/power/wealth.html

[2] https://fred.stlouisfed.org/series/HNONWRA027N

[3] https://www.census.gov/popclock/

Edit: Especially when you consider that this article[4] came out in 2013, a majority of people will be able to 1) basically completely exit debt and 2) start contributing substantially to the economy again. Not to mention afford college, afford healthcare, afford good food for themselves and their children, drop a whole lot of stress, and generally build their lives back up. There would be zero people below the poverty line. Who knows if the traditional refrain of "velocity of money increasing means inflation means collapse" would be realized in such a radical redistribution, and if a sudden and drastic shift such as that would end up hurting more than helping. We can only ever play the speculation game in matters like these.

The numbers in the main body reflect also the worth of nonprofits. Not sure on the proportions on that one, but even if you take it to be 10% of all the wealth (IMO an absurdly high estimate) the number still shifts to $187,000 per person in the bottom 90%.

[4] http://money.cnn.com/2013/06/24/pf/emergency-savings/index.h...

> If we wanted to forcefully distribute the money while leaving the people at the top intact (let's call this "blunt force redistribution") such that the current top 10% has 10% of the wealth, then each person in the bottom 90% would receive $208,000 on average.

They would receive assets valued at 208,000$ at current (arguably inflated) prices, most of it not being cash. You might expect the biggest expropriation in US history to be somewhat upsetting to the markets.

Now that we've established an upper bound, maybe we can talk about what percentage of that money can realistically be taken and what problems it could actually solve.

>They would receive assets valued at 208,000$ at current (arguably inflated) prices, most of it not being cash. You might expect the biggest expropriation in US history to be somewhat upsetting to the markets.

Technically true, but the path of this redistribution would be in the form of taxation and offered public services, which is extracted purely as cash.

According to the Obamacare website, poverty levels are around $11,000 per person, scaling sublinearly with the number of people in a single household. If we use that as a baseline, we'd need to tax the top 10% about 5% more per year and redistribute that in cash or an equivalent value of provided services (education, healthcare, etc.) to create a buffer that effectively nullifies the concept of a poverty level. In reality this would likely be applied more as a progressive tax, so the top earners would be taxed more and more benefits would go to the people who are actually poor.

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