There seems to be almost no incentive to preform actual labor when just sitting back and watching Coinbase 24/7 is objectively more profitable.
Labor should be tax free or low and capital gain should be taxed high. Time is more valuable than money and taxes should reflect that.
I understand the sentiment, but it literally isnt true. If it were, then noone would accept a job since they'd rather have the time instead. At the very least, there is more nuance to be observed here.
The person you're responding to wants 100% of their current healthcare plan but only half the salary/expected hours, for example.
- Two employees at 50% salary and time are not equivalent to a single employee at 100% of salary. They're strictly worse if always run in series, all else being equal. Alice starts project X on Monday and Tuesday, and hands it off to Bob on Wednesday because it's urgent. There's some inefficiency there. Good management could help avoid it, but would be hard-pressed to prevent it in all cases. At best, it's one more thing to worry about.
- There are benefits outside of your salary that are more difficult to cut in half. Health plans, headcount taxes, etc.
I'm actually planning to cut my time in half, but keep the same pay. My story was discussed here on HN yesterday/today: https://news.ycombinator.com/item?id=27133376
Long story short: As the startup I'm working at doesn't have enough money to raise my hourly price, I'm now proposing to cut my hours in half, but keep the pay. So I'm working half the time, but keep the pay. It's summer now, so I'm happy to spend more time with friends and family.
And while we're talking about working less, another thing that's interesting I think is "4-day work weeks". There are remote companies who work 32h per week. I even made a list of the ones I know, but I'm sure there are more: https://remotehunt.com/remote-companies-with-4-day-work-week...
I wrote about this a while back: https://www.growwiser.com/2011/11/27/less-work-for-less-pay-...
Be warned though, you won't make the same batshit insane US salary here.
So, if we value air more than food, should we stop eating so we can breathe more?
I would conjecture people don't always work for rational reasons -> Billionaires going to the office must piss off everyone like dude, you've won the game, go buy an island or something. So work is a useful habit. Useful in that it's a source of revenue for the government. Which is good and I agree with. But that makes unemployment a wholly irrational thing. Can our economic models even include unemployment as a variable? Surely government must hear those unemployment stats like a cat scratching a board.
Should people have to lie, cheat, beg so that they can become tax paying citizens?
Or imagine the extreme, where capital gains was taxed 100%. No one would invest, we would all be essentially hunter gatherers. There would be no capital appreciation allowed so you would not be able to invest in anything in hopes of making a profit.
Capital is how you build a better future
This will likely never happen unless we have a true existential/societal collapse so why entertain this thought?
If you accept the fact that 100% capital gains tax would result in no investment and a 0% capital gains tax would mean a lot of investment, surely there is a link between cap gains and someone's willingness to investment. Especially considering that capital holders tend to be sophisticated and highly sensitive to incentives.
So increasing the capital gains tax would lead to less investment.
So if someone prices out a project where they can expect 10% return but now you tell them they are only going to get 9%, then the risk may not be worth it.
You may not think like this, but I guarantee you the people in charge of allocating capital do think this way.
The point of the OP was that work is generally more valuable to society than capital gains, but is taxed higher so there is a mismatch between the worth and how we tax it. Saying if we tax capital gains 100% nobody invests, does not add anything to the discussion as the same argument applies to work.
Is it though? Capital build a better future. It's more forward thinking than just working.
For instance, I want my children to forgo working and build capital for their future by getting an education. The foregone income would pay back more in the long run.
Which is it? Are corporations sitting on huge piles of cash or are they using the cash for stock buy backs?
US has relatively low savings that has gone down from about 10% in the 70s to a low of ~3% in mid 2000s to ~7% today (ignoring 2020 which shot up savings to 30+%). Compare that to China which has much higher growth which regularly saves ~36%
This is one of those "does not compute" statements that's sort of like dividing by zero. Money buys time, and time has value (https://www.investopedia.com/terms/t/timevalueofmoney.asp), which is measured in money.
It's why we try to incentivize long term investment, because without such an incentive, consumption now is better than consumption 5-10 years from now. We saw this happen before "long term" carve outs began proliferating in various states' tax codes.
Only when you look at it from the business owner perspective, who can simply buy more labor (time) to make more money.
For individuals, the only thing we have in this world is time, and it's finite. When it's all gone, it's all over for us. That means time is the most valuable thing possible to individuals.
If and when we choose we can sell some of that time for money. But money in not what we want, and it doesn't give us direct value. Time is what we all want, because sooner or later it runs out.
But this is a difference in degree, not kind. When the average individual buys something online, some individuals may choose to pay a little more for expedited shipping. It's the same principle. More abstractly, if I were to pose an individual looking to purchase Nike shoes 2 options: $100 to get the shoes today, or $1 to get the same shoes a year from now, the majority of individuals would choose the former, rather than the latter. Again, that's because of the time-value of money.
Now, you're correct that not everybody has the means to be able to buy time like this, but one can't conclude from this reality that time is "more valuable than" money.
> Time is what we all want, because sooner or later it runs out.
Yes, this is correct, and it reinforces the argument that time and money are just two currencies that are interchangeable. Money is just a proxy for value, and time is undeniably valuable. Not everybody has enough money to buy 70+ years of "free time", which is why the median person typically trades labor instead of money for future "free time" (retirement). In most countries that offer social security, that's the underlying mechanism: convert mass labor into money (taxes/contribution) which can then be converted into long term investment (sovereign wealth funds, SS trust funds), which is then converted to equally distributed "future free time" for everyone involved.
So the value of time very much depends on your stage in life and your finances and your goals. Spending your time working or doing things yourself can be a good trade if you have the time and need the money.
The “can’t work more hours” piece actually works towards your argument for finite time: why would you want to spend any of your outside-of-salary time doing stuff you don’t want to do that could pay someone less to do?
And lots of suicidal kind of messages when the whole market crashes. So I'd say losses are as vocal as wins depending on which forums you go to.
You need a decent amount of capital to pull off the trading and renting. Unemployment isn't pocket change to those people, but it is not a lot.
I don't know but something seems wrong in the way work is incentivized. Is the market broken?
Like why this photo filter app boy/girl is super rich + has a lot of free time, and my friend nurse has very little money and works all the time?
They rather have negative effects I would say: like a bad impact on teenager's self esteem or something like that.
But yeah, it's our society and it's values :)
Perhaps it's more reasonable to say that providing a small amount of value to a larger amount of people is more profitable.
The world is full of people who simply aren’t capable of providing “value” at scale. Odds are that society gets better outcomes when the few who can do so pursue things like silly image filter apps (and sometimes actually useful things too) over nursing careers.
In a way, scaling/globalism seems to be working against us.
Let’s also not forget the possibility of highly valuable and highly scalable pursuits.
1. People with the talent to make high-value/low-scale products (e.g. medical imaging) are working on low-value/high-scale products (silly apps). This is similar to how our brightest minds are making people click ads.
2. Apple and the HN reality distortion field make everybody (even those without the skills) believe they can become rich by creating low-value/high-scale apps.
It has nothing to do with the market and everything to do with ease of creation.
Don't underestimate the value and utility of CRUD apps.
Automation and economies of scale has made it much more efficient to produce necessities. Yet society has failed to convert that into allowing the low classes to have more free time. Everyone needs to do some useless job to survive even if there is nothing that needs to be done.
What message is labor supposed to take from all of this? We are not valued at all, so why even bother? If society is set up to be a system where we all just trade paper and bits back and forth, then why do any productive work at all if you’re going to end up getting shit on?
I wouldn't be surprised for more daytraders to emerge playing games like GME/TSLA/BTC. With infinite printed money there never needs to be a greater fool. Shorts who go bust get bailed out, banks who bet long can pump the stock on near negative interest, Individuals can drive momentum to the point that other players leverage the money spigot.
After all as long as the money doesn't get withdrawn it doesn't impact the real economy right?
I recognize that's the result of a whole heap of privilege, but I don't have to work and still do because it fulfills my desire to build things and... well honestly, make money.
Trading is also a job you have to put effort in and one that does not appeal to me at all. I'd rather be programming.
Sometimes the stress and anxiety of crypto is physically debilitating.
But you're wrong that it's something you have to put effort into. The absolute BEST decisions i've made in crypto were inaction. The biggest regrets I have were all caving to anxiety.
The two are orthogonal rather than opposed categories.
Poor are poor. Middle class are screwed (money on bank account basically has negative interest due to inflation). So you can be a pseudo rich by just holding stock/bitcoin/peoperty - since they increase in value purely due to money print.
If you are a middle class person the central bank basically screws you to save the stock market.
Unpopular opinion but the central banks are the main source of inflation.
Now the economy is completely unglued from any fundamentals.
I mean, that seems obvious, there can't really be inflation if the money supply doesn't increase, can there?
If the money supply stays fixed, then some people will save/hoard money. Some people will also be more able than others to acquiring money (possibly because they already owned assets/rental property), maybe they were born rich. The amount of money that is circulating will automatically decrease. That tends to produce deflation.
The problem is that if you have deflation in your economy, it also increases the incentive for people to save/hoard money even more. Why would you spend your money today when it will be worth more later? You have a feedback loop where the amount of money circulating just keeps decreasing, and so prices automatically have to go down.
Depending on your definition, sure there can be. Private lending is the primary driver of inflation. Most wealth is on paper anyway, so long as people don't try to get actual cash, then an economy can experience significant inflation with a fixed supply of money.
You don't even need lending to drive inflation without a money supply increase. There are lots of bitcoin millionaires out there who can't actually liquidate their holdings for cash, but could, in theory, actually buy other physical goods with it at roughly face value.
Central banks don't have a monopoly on inflation, despite everyone's apparent belief that they do. They are a major influencer, yes, but at USD-scale, they don't have all that much control. You can see this in how the Fed almost always misses their inflation targets.
4% * $50 trillion = $2 trillion in just interest per year. The US Government will be at roughly that debt level perhaps within a mere 12 years at this point (assuming one normal recession in that time).
So as you can see, the US Government can afford no meaningful climb in the average interest rate it's paying on its swelling debt. Normally as a massive borrower gets more shaky in its finances, the rate it would expect to pay would climb at an accelerating pace with its fiscal implosion. To avoid that fate, the Fed has to step in and become the primary buyer of the garbage US Government debt (which will be endlessly recycled as they will never pay any of it down now). The financing problem with the US Government is so enormous at this point that there are no other nations or private pools of capital large enough to keep up with it on a consistent annual basis, currency debasement - eating the value of anything held in dollars, including most US assets - is all that is left to fully fund the government (and the entitlement costs will only keep spiraling higher this decade and next).
The stock market is a laughably trivial concern next to that problem. Which is also why one of Biden's immediate priorities is raising taxes (if they don't, the Democrats know it'll put the welfare state & entitlement programs they've put so much effort into building over many decades into jeopardy sooner (collapsing demographics may take care of that regardless)).
I agree with most points but that wasn't the main motivation. It was to keep the economy going in terms of people spending money when much real production was stopped due to covid. Now covid is mostly over, at least in the west, and spending is rising leading to inflation, bank printing will probably stop and the stockmarket fall. Which is not necessarily a bad thing.
But I think what you're seeing is lots of fomo and people who had savings because they were forced to save (couldn't spend it), they should be back to their jobs when the market inevitably crashes.
the people that say shit like "unemployment payments encourage laziness" are talking about poor people, minorities and people of color.
The people you're referring to doing crypto trading are typically affluent already, or people in social structures and communities where they have places and people to fall back on.
Is it? I find that highly improbable.