It was hyperbole, I'm sure there is a limit, but most people are nowhere near it. Your hypothetical content person with a small apartment isn't prepared to sacrifice for more money to buy a fancier car, sure yeah.
But, don't they sound exactly like the sort of person who saw that they could hire a taxi for their burrito at a reasonable price said "Sign me up?"
> what happens when there's only demand for 8 apples and 8 pears? People don't work as much.
I think what happens when there's only demand for 8 apples and 8 pears is people stop dreaming about finally getting enough to eat and start dreaming about having a car. And when they have the car, they dream about having 2, so mom and dad can both go somewhere. And then, they dream about having karate lessons for their kids. And once their kids are in karate and soccer and dance and track (this is where I'm at right now), the kids want to add horse-riding lessons to the mix.
Edit: I think your broader point really was that an individual, especially mid and late career can really get screwed by it. And yeah, I agree. Let's help them with the extra taxes we collect from modernizing our infrastructure.