Re:Ask YC: Any Updates on the Basic Income Project?
by webmaven on Sunday December 25, 2016 @11:20AM
(#13254531)
> Gains exponentiate and as well they should.
Sure, over time. But what I'm talking about is that the more capital you have the greater your rate of return.
> the savings rate has gone down immensely
Well, no wonder. Have you looked at the interest rate you get on a savings' account? You can't even keep up with inflation that way.
> why would those gains you mention above fail to grow in a superlinear fashion?
You assume that all uses of borrowed capital are consumed with no ROI, when much of it is invested in present or future health (healthcare, better food, safer car), education (particularly through paying higher home costs to get kids into a better school), property improvements, cost savings (more fuel efficient vehicles) and the like.
Sure, a chunk of it is spent on entertainment of various sorts that doesn't have a clear ROI, but this is actually the one area where the consumers' buying power has increased, even accounting for inflation, and the average % of income spent on entertainment has actually gone down considerably.
So, while I certainly agree that compounding interest can account for some of the disparity, it doesn't account for all of it. Rather, we see that the top layers of society are raking in a greater and greater share of the total earned income, entirely aside from the compounding returns from renting out their accumulated capital.
There is no real reason that the CEO of a corporation should receive 300x the salary of a lowly employee, except that the boards that set compensation are comprised solely of people from the same social class.
> I think it is a case of eroded values more than anything else.
Uh huh. So, being poor is a moral failing, is it?
Next you'll be telling me that low incomes give poor people an incentive to work harder, but that we need to pay rich people more so that they have an incentive to work harder.
Sure, over time. But what I'm talking about is that the more capital you have the greater your rate of return.
> the savings rate has gone down immensely
Well, no wonder. Have you looked at the interest rate you get on a savings' account? You can't even keep up with inflation that way.
> why would those gains you mention above fail to grow in a superlinear fashion?
You assume that all uses of borrowed capital are consumed with no ROI, when much of it is invested in present or future health (healthcare, better food, safer car), education (particularly through paying higher home costs to get kids into a better school), property improvements, cost savings (more fuel efficient vehicles) and the like.
Sure, a chunk of it is spent on entertainment of various sorts that doesn't have a clear ROI, but this is actually the one area where the consumers' buying power has increased, even accounting for inflation, and the average % of income spent on entertainment has actually gone down considerably.
So, while I certainly agree that compounding interest can account for some of the disparity, it doesn't account for all of it. Rather, we see that the top layers of society are raking in a greater and greater share of the total earned income, entirely aside from the compounding returns from renting out their accumulated capital.
There is no real reason that the CEO of a corporation should receive 300x the salary of a lowly employee, except that the boards that set compensation are comprised solely of people from the same social class.
> I think it is a case of eroded values more than anything else.
Uh huh. So, being poor is a moral failing, is it?
Next you'll be telling me that low incomes give poor people an incentive to work harder, but that we need to pay rich people more so that they have an incentive to work harder.