Welcome to the New Middle Ages
unherd.com
unherd.com
The rich have won to the point of not being able to fail. The idea that poor people aren't working hard enough is the most toxic thought.
If you’re a software engineer making a few hundred k a year, this isn’t even talking about you. You have more in common with someone making $10 an hour than the executives that run your companies.
Go look at some photos or drive by a food bank right now. There’s more people waiting in line outside of a single Brooklyn food bank for 9 hours in the freezing cold than there are people with enough wealth to feed every hungry person in America permanently and still come out ahead in 5 years.
I’m sick of people with no compassion outside their own family. Society is not a zero sum game. Your life would be better in a thousand ways if we provided a real safety net.
https://upload.wikimedia.org/wikipedia/commons/e/e0/Federal_...
I dunno, 1800-1940 looks pretty promising. The high taxes of 1950-2020 doesn't seem to have done much for making people happy. I'm always happy to start a fight - I reckon the biggest impact of things like the 1950-2020 tax regime is a bunch of factories to China.
Obviously there is a lot more going on than taxes, but America isn't investing in itself and it is starting to show. Where did the money go? Is the answer in that extra 10% of the GDP being directed to the Federal government? After 70 years that would be starting to show up.
The interstate highway system for one. We have tons of “new” infrastructure that is expensive to maintain.
Also - the military, healthcare and social security is where almost all of the federal budget goes. If you take social security “out” as basically an investment account then it’s nearly all healthcare and military.
We spend more on the military than the next top 7 countries combined.
We also have the highest cost healthcare per capita in the world and not even top 20 outcomes.
Infrastructure that could change the trajectory of whole communities is almost a rounding error.
My theory is that when you print money, most of the new money finds its way into the pockets of the rich.
Even though we print new money to pay for government spending (via bonds) - eventually all that new money trickles up to people that own assets. And the people that own the most assets gain the most new money.
I think we should return to WWII to 1980 period where we paid for government programs via taxation, and not money printing. My hunch is that this is the only way to reduce income inequality.
This gets complicated. The money supply has to expand to keep up with growth; getting the flexibility to do this is the reason why the world abandoned the gold standard. Failure to expand the monetary base adequately leads to deflationary economics, which is another kind of hell entirely.
That said, the fed's response to the last two economic disasters (2008 and 2020) has been to do quantitative easing in ways that do concentrate wealth in the hands of asset owners. Buying questionable assets with printed money does give the owners of those assets money at the expense of non-asset holders.
There are ways to respond to economic disasters without increasing inequality, but these choices are not politically feasible in America as they would involve giving money directly to people who don't have much of it.
Giving money to rich people (through monetary or fiscal policy) is seen as politically good, while giving money to anyone else is 'welfare' and is a political third rail.
Economists do know how to deal with these issues. The problem, as with everything else in America, is that the politicians (hello, Mitch McConnell) and interest groups (hello, Koch network) who have a veto over policy don't want to deal with them.
Consider that the federal government collected revenues of $3.5 trillion in 2019, or more than $10,000 for every person in the country. State revenues combined were more than $1 trillion in 2019, for a total average tax liability of about $13,600 per-capita. I don't see a realistic way to double or triple that revenue number while taxing income alone (and citizens would naturally demand a commensurate increase in government services if such a tax increase applied at lower-income levels).
Taxing wealth or ownership in companies is another route, but individuals who own any notable percentage of a public company are naturally very mobile, and could easily change their country of residence to somewhere more tax-friendly (like former Google CEO Eric Schmidt may be planning).
It seems like a difficult position to be in for the government.
You either pay for it up front via taxation or later via inflation (increase in money supply). You are focused on increasing revenue but why not exercise some restraint and, oh I dunno, cut back on the ridiculous military overspending that doesn’t improve quality of life for the people paying the taxes?
Things like Central Bank digital currency and authoritarian tech would suggest a solidifying of establishment power. But, then again, people are very pissed off about their lot in life - and the same tribal forces ensuring division could just as easily be what destroys this whole paradigm.
One way of excusing yourself from such a conversation in a (hopefully) unoffensive way would be to make an honest statement like, "Gosh, my brain is so overworked right now that I can't even begin to delve into the nuance of that subject, but I hear where you're coming from."
Sure, until people realize that politics have the capacity to impact their lives negatively, and then all of a sudden the rationality for discussing it is quite clear.
> One way of excusing yourself from such a conversation in a (hopefully) unoffensive way would be to make an honest statement like, "Gosh, my brain is so overworked right now that I can't even begin to delve into the nuance of that subject, but I hear where you're coming from."
I wouldn't characterize this as a polite excuse so much as an honest admittance—you clearly respect the other person enough to indicate an acknowledgement of the meaning of what they're saying and an incapacity to respond. That is, unless you're lying, which is clearly disrespectful. In that case a "I don't agree but I feel like it's unprofessional to engage in these conversations" would suffice.
But a line needs to be drawn somewhere of how wealthy you can get before it’s “too much” and has a negative affect on society. And how we can distribute a portion of that excess wealth to the people who would get the most benefit from it.
I don’t think anyone’s going to be discouraged from putting in the work to becoming a billionaire just because their billions are taxed more than their first few million dollars. That money accumulation has diminishing returns on value to self & value to society.
That depends on how you define 'wealthy.' There is a vast gulf between the kind of money people of sound mind and body can get through hard work and the degree of wealth the truly rich actually own.
The guy who grew up in a ghetto but is now making a six figure income (anywhere but San Francisco) did it mostly though his own hard work. I would not, however, call that guy wealthy when compared to the truly rich.
The 40 people who own more wealth than the bottom 50% of the US population own it by virtue of being born to the right parents. There is no degree of hard work that will make someone a billionaire. Those people got that far by being born into a family that could give them seed capital and access to elite education that enmeshes them into the right social networks.
When people talk about income inequality, they're not talking about people earning $500,000 in wage income by working 80 hour weeks. Instead, they're talking about people who are extracting a tens of millions of dollars in economic rents (as largely untaxed capital gains) without needing to do any work for it.
I’m a semi-follower of the FIRE idea, so I come in with that perspective. But it would be great to be able to build enough wealth that working becomes optional, and that I can help fund a future child in kick-starting their own company at a young age. My wealth then largely has come from my hard work, but I can also use that to further my kid’s success (in a responsible way). Isn’t that what every parent wants?
The situation where that kid becomes a billionaire is an edge-case of just two generations in a row of disciplined and fairly lucky individuals. There’s nothing wrong or immoral with anyone in that scenario.
Society then has to draw that line, where if my daughter becomes a multi-billionaire, how much of that wealth gets taxed and distributed to the people who it would help.
The current growth in inequality does look bad - the bank bailouts in '08 are a good example of a problem - but if you try to start a conversation first with inequality you aren't going to the underlying problem. The underlying problem is that increasingly the people with power are wielding it to stamp out prosperity. Commercial failures, in particular, should go bankrupt, not be rewarded. Companies that rely on massive amounts of debt should be crumpling under the load. The major governments of the world are creating an environment where these companies can limp on for extended periods of time, burning resources (that other people could have used) as they go.
It's a slippery slope, but more and more the politics that has completely devoured American culture is beginning to consume this site as well. I am completely sympathetic to the idea that inequality is a problem, but HN used to be one of the few sites with substantive discussions that you could get away from politics. It's still mostly that, but that has been slipping away over the last few months. And that is a genuine tragedy in an angry and divided world.
Like it or not, the tech sector does not operate in a vacuum. What the tech sector enables, and how it concentrates wealth, has consequences for all of society. Anyone who is connected to the tech industry, as an investor or employee, has a social obligation to be aware of the externalities created by this industry.
No one gets to mix paint thinner into the office coffee and then cry 'stop playing office politics' when they get called on it.
It seems like a discussion of the world and what is happening. There is some reporting on the distribution of incomes. Those facts don't seem like they are meant to embroil us in cultural conflict though.