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Comment by JumpCrisscross | Hacker News Reader

> Lower classes spend 100% of their discretionary money' on assets

Assuming you mean non-discretionary expenses. If so, that describes a third of Americans, down from half in 2002 [1]. A strong majority of Americans (a) get more money from the government than they put in, (b) own assets or (c) route discretionary income to consumption over asset accumulation.

We have an inequality problem. But the facts paint a more moderate, and thus addressable, picture than the pundits.

[1] https://www.marketingcharts.com/industries/financial-service...

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> If so, that describes a third of Americans, down from half in 2002 [1]

Your source is from 2007. I don't have that particular figure; but in 2019, the bottom 50% of the wealth distribution continue to own almost nothing, the top 10% of the wealth distribution own 71% of all assets and the middle 40% own about 28% [1].

> A strong majority of Americans get more money from the government than they put in

This is literally the point of taxes: to redistribute resources.

> (b) own assets

See above, but ownership of assets is distributed incredibly unequally.

> (c) route discretionary income to consumption over asset accumulation

This argument that poor people remain poor because they make bad choices (formally called "culture of poverty") has been heavily criticized. Most economists and sociologists now reject it and have done so for over 30 years.

[1] https://wid.world/share/#0/countrytimeseries/shweal_p50p90_z...

> poor people remain poor because they make bad choices

Not sure where it was called a bad choice. It's simply a preference for consumption today over asset accumulation. For most people, that's a fine and comfortable way to live.

"Bad choices" from the perspective of wealth accumulation. Regardless of how you want to frame it, the idea that attitudinal differences prevent poor people from accumulating wealth is no longer taken seriously by most who study the field.

> "Bad choices" from the perspective of wealth accumulation

Which is not a paramount motivation for everyone.

The problem is, most consumption is not actually flexible - it's semi-fixed cost (i.e. shelter, food, transportation). And those don't vary enough for asset accumulation to be possible at the lower end (especially when you include externality cost from things like eating cheap food).

The difference between earning $100K and $500K for most developers, for example, is [most] of that extra income going into investment assets; that's because the first $100K covers most of the fixed costs, and short of luxury purchases, there's not much more you need day-to-day. The gap between earning $30K a year and $100K a year is way bigger in terms of QOL than between $100K a year and $1M a year.

(I'm in between both worlds in a way since I have friends making < 30K a year and > 200K a year and I have two careers, one high income and one relatively low income and have thought about the issues quite a bit)

Yeah, the addressable part is where you take the wealth that has accumulated among people who don't spend it, and distribute it among people who do.

It's very simple.

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