The Incredible Shrinking Incomes of Young Americans

[Malthus]

Ah, but the current elite like the system, that's why it won't change.

It isn't just the elite. I've often argued in various contexts that more stress should be made on taxing (say) inheritance, and it is almost never popular. People generally hate the notion, even though you point out it would presumably lower taxes from income and from such regressive sources as sales taxes.

[Martinus]

Ah, but the current elite like the system, that's why it won't change.

They do, of course. What's scary is how many of those who are not elites nor have any chance of becoming a part of it, accept the system in which the income from their own hard work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).

[Malthus]

Ah, but the current elite like the system, that's why it won't change.

They do, of course. What's scary is how many of those who are not elites nor have any chance of being a part of it, accept the system in which the income from their own work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).

Heh. See post above yours. 

I see you have had some of the same debates ...

[Martinus]

Ah, but the current elite like the system, that's why it won't change.

They do, of course. What's scary is how many of those who are not elites nor have any chance of being a part of it, accept the system in which the income from their own work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).

Heh. See post above yours. 

I see you have had some of the same debates ...

Yup. That's why I have always argued that people with kids should not be allowed to vote.

[Malthus]

Yup. That's why I have always argued that people with kids should not be allowed to vote.

It's the people who *are* someone's kids that's the problem! I.e., everyone.

I'll have you know my parents fully plan on spending every penny they own before they die. 

[But seriously ... with life expectancies these days, "inheritance" is something you can expect to get when you are 60 or so yourself. So not exactly a huge boost to life prospects]

[Admiral Yi]

Inheritance is probably also the easiest to dodge of the three.

[garbon]

I lived without a car for a coupla years, it was perfectly doable in an urban setting. 

Tragic.

[Malthus]

Inheritance is probably also the easiest to dodge of the three.

It's a good point. Practically, increasing inheritance taxes would just lead to less money lying around to be taxed.

However, most people are opposed to it in principle, even if it was workable.

[Jacob]

There is a bit of inflation in expectations of what is "needed", as well - depending on where you live, you often don't "need" a car (for example), but many working people think you do. I lived without a car for a coupla years, it was perfectly doable in an urban setting.

It kind of depends - if you live on good transit routes to where you work, you can get by without a car yes. Of course rent/ property prices tend to be fairly expensive in such centres. If you're coming in from the suburbs, in many cases not having a car is severely impractical.

Personally, I lived without a car until I was 40 and it was pretty doable - but I lived in a pretty good location for commuting via walking/ biking/ transit. However, once we had a kid it was pretty much a game changer. While I think it's technically possible to raise a kid without a car, I don't think terming it a luxury is accurate.

[Hamilcar]

Piketty's solution of a (global) wealth tax on extremely large fortunes (1bn+) would be a big step, but even he admits that it's neither practical, nor politically palatable.

[crazy canuck]

More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.

I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.

What there is to be done about it is less obvious.

I think Piketty gives a fairly plausible diagnosis.

He is really more descriptive of the problem than providing a diagnosis of the problem.  Although he does provide some suggestions for what might assist with the problem of income inequality

[Malthus]

There is a bit of inflation in expectations of what is "needed", as well - depending on where you live, you often don't "need" a car (for example), but many working people think you do. I lived without a car for a coupla years, it was perfectly doable in an urban setting.

It kind of depends - if you live on good transit routes to where you work, you can get by without a car yes. Of course rent/ property prices tend to be fairly expensive in such centres. If you're coming in from the suburbs, in many cases not having a car is severely impractical.

Personally, I lived without a car until I was 40 and it was pretty doable - but I lived in a pretty good location for commuting via walking/ biking/ transit. However, once we had a kid it was pretty much a game changer. While I think it's technically possible to raise a kid without a car, I don't think terming it a luxury is accurate.

I don't think a car is a "luxury". I think a new car is a "luxury".

As I noted, whether a car is a necessity depends on where you live, so I don't think we are really in disagreement.

Of course, if you are elderly, disabled, or have kids, or (as someone mentioned already) have to travel a lot for work, having a car is more of a "necessity".

My point, though, was that many people in our society are bad at accurately determining what is really a "necessity" for them, and that this problem occurs with people at all income levels. The car thing is simply one example of this: people seem to be highly unwilling to go without, well, anything, in order to save money. Everyone "needs" TV with cable packages, new cars (used won't do), cell phones, laptops, holidays to foreign destinations and all the rest - if they don't have all that stuff, they feel they can't really live in the modern world (and yes, some of that stuff may be a work necessity). Any hint that people could possibly learn to live with less (and so actually save money) is met with incomprehension, hostility or ridicule.

Is it any wonder that debt levels in our country are at all-time high, and savings levels at all-time low? Part of it is the increasing cost of housing, part of it is the decrease in the middle class, but part of it is what I'm describing: that everyone has absorbed the mantra of consumerism, and simply can't differentiate between "needs" and "wants" very well. 

[Admiral Yi]

Piketty's solution of a (global) wealth tax on extremely large fortunes (1bn+) would be a big step, but even he admits that it's neither practical, nor politically palatable.

For starters, once Occupy Wall Street types realize that any reasonable distribution would send all of the money to African and Asian shitholes, they might be somewhat less enthusiastic.

[Hamilcar]

More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.

I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.

What there is to be done about it is less obvious.

I think Piketty gives a fairly plausible diagnosis.

He is really more descriptive of the problem than providing a diagnosis of the problem.  Although he does provide some suggestions for what might assist with the problem of income inequality

I think he did more than just describe the problem, he does list a series of long-term trends coming together combined with some fundamental economics.

I really worry that he's right, because if he is, there may not be much we can do.

[crazy canuck]

More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.

I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.

What there is to be done about it is less obvious.

I think Piketty gives a fairly plausible diagnosis.

He is really more descriptive of the problem than providing a diagnosis of the problem.  Although he does provide some suggestions for what might assist with the problem of income inequality

I think he did more than just describe the problem, he does list a series of long-term trends coming together combined with some fundamental economics.

I really worry that he's right, because if he is, there may not be much we can do.

I think he is probably right about the trend lines he identified.  That is certainly his area of expertise.  But iirc he has said a number of times that his book is meant to be descriptive of the data he has accumulated (no pun intended).