Buying vs Saving Economic Theory
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@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
@DustinB3403 said in Buying vs Saving Economic Theory:
Saving is great personally as it builds wealth in side the household. But it's not contributing to the economy of putting people to work.
Depends, savings and investment accounts actually do put people to work.
In the limited market that are working with money and investments directly, certainly. I didn't disagree.
But that job market is tiny compared to the number of people who are job ready for things like shipping, or road work (or any other blue collar job)
Right, but who cares that they are job ready? Just making them "do something" does not increase our economy. It just pays them at your expense.
I used "job ready" as a synonym for a non-skilled labor. Working with money and investments or designing bridges are the white-collar jobs.
Actually putting the bridge together (while supervised by a white-collar manager) is what produces economic growth.
Yes, shipping (shipping drivers) is a poor example, but the role needs to be filled, and that creates an economy rung.
Oh, what i mean with making money is that savings and investment dollars are used to build the economy through paying for things like real estate growth (savings accounts are the primary funding for building buildings, for example) and more general investments are used for things like factories or product designs and bonds are often used for roads or things like that. So blue collar jobs created through them, too. But jobs and economy are not the same. In theory, the best economy would have essentially no jobs.
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@DustinB3403 said in Buying vs Saving Economic Theory:
So @scottalanmiller what do you think would be a way of keeping people alive (literally) in a jobless world. Where there are machines doing everything, from growing food, to building structures?
Not everyone is going to be maintainers of the robot army.
So just a base income for everyone? How is that going to be settled on?
I've been preaching this for decades (literally) and I'm racing to write it before @dashrender repeats it because he's heard it so many times. But first...
- Economy is the buying power of the economy, not a reflection of individuals.
- Individuals fare best when disparity within an economy is low.
This is the "base income" idea proposed and voted on by Switzerland a few months ago - the idea that the companies making all the money have to pay a high degree of taxes and that everyone earns "something" so that everyone can live well from the results of their economy without needing to worry about a job. This was proposed by Scott Adams in his guidance as the economic adviser to the CIA decades ago and written about in his books.
This is believed to actually grow, not shrink the economy, as sending people to work actually hurts the economy and the value of the work that they do has to overcome the economic loss before it can provide economic gain and roughly 98% of the workforce actually functions at a loss or break even and just 2% represent all of the gains and growth. But, the 98% that aren't adding value are often "in the way" making it harder for the remaining 2% to be as effective as they could be. So, the theory goes and tons of people now agree with this around the world, is that by trying to keep everyone "busy" we are inadvertently making everyone poorer.
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And the theory goes farther... not only do we take the only people growing the economy today and make them more efficient (making the economy even bigger) but we reduce the cost of doing so by reducing the busy work so the risks go down and we also create a system where the 98% have free time to do things that they cannot do today such as, for example... invent things, do community service, art or whatever that help humanity- potentially by growing the economy. We might turn losses into gains.
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@DustinB3403 said in Buying vs Saving Economic Theory:
So just a base income for everyone? How is that going to be settled on?
Absolutely, experts have known that this was the future that was coming for decades now. Maybe centuries, I've even known about it for decades and economics is a casual interest.
It's a bit complex to settle on the exact about as the value of money changes dramatically in doing this, but like most things in the economy, it is a self leveling system. The more money you pay out, the less it is worth. The amount of money in the system represents the whole of the economy, so outside of the "extra" amount going to those actually making money (if that even turns out to be necessary, but it probably is) there is really nothing to decide on.
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@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in old MSP wants to know what they did wrong:
@DustinB3403 said in old MSP wants to know what they did wrong:
If you're never replacing things with newer better solutions there is an underlying issue.
That's a very American sentiment. They don't replace their houses for hundreds of years... because they build them to last the first time.
I did say better solutions. If the house they built is the best solution then fine. But don't complain about WEP and say things like "they don't replace things as they expect them to last decades" and then be snarky when someone comments on the economy of a country based on what you've said of the same country.
Buying new goods on a regular basis, creates a healthy economy. Not doing so contributes to the financial collapse that Italy just had.
WHAT? that's basically Reagonomics right there - spend your way into success.. lol
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@Dashrender said in Buying vs Saving Economic Theory:
@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in old MSP wants to know what they did wrong:
@DustinB3403 said in old MSP wants to know what they did wrong:
If you're never replacing things with newer better solutions there is an underlying issue.
That's a very American sentiment. They don't replace their houses for hundreds of years... because they build them to last the first time.
I did say better solutions. If the house they built is the best solution then fine. But don't complain about WEP and say things like "they don't replace things as they expect them to last decades" and then be snarky when someone comments on the economy of a country based on what you've said of the same country.
Buying new goods on a regular basis, creates a healthy economy. Not doing so contributes to the financial collapse that Italy just had.
WHAT? that's basically Reagonomics right there - spend your way into success.. lol
Liquidate your assets, buy lottery tickets, it really works!
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@scottalanmiller said in Buying vs Saving Economic Theory:
In the future we expect that most people will be idle and that there will be almost no work to be done, yet we expect the economy to continue to grow. An economy is the buying power of what you have, not the amount of busy work you can keep people doing.
This is the part that I don't understand how it sustainable.
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@Dashrender said in Buying vs Saving Economic Theory:
@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in old MSP wants to know what they did wrong:
@DustinB3403 said in old MSP wants to know what they did wrong:
If you're never replacing things with newer better solutions there is an underlying issue.
That's a very American sentiment. They don't replace their houses for hundreds of years... because they build them to last the first time.
I did say better solutions. If the house they built is the best solution then fine. But don't complain about WEP and say things like "they don't replace things as they expect them to last decades" and then be snarky when someone comments on the economy of a country based on what you've said of the same country.
Buying new goods on a regular basis, creates a healthy economy. Not doing so contributes to the financial collapse that Italy just had.
WHAT? that's basically Reagonomics right there - spend your way into success.. lol
I think you mean Keynesian Economics/demand-stimulus economics ... Reagonomics was something different.
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@Dashrender said in Buying vs Saving Economic Theory:
@DustinB3403 said in Buying vs Saving Economic Theory:
@scottalanmiller said in old MSP wants to know what they did wrong:
@DustinB3403 said in old MSP wants to know what they did wrong:
If you're never replacing things with newer better solutions there is an underlying issue.
That's a very American sentiment. They don't replace their houses for hundreds of years... because they build them to last the first time.
I did say better solutions. If the house they built is the best solution then fine. But don't complain about WEP and say things like "they don't replace things as they expect them to last decades" and then be snarky when someone comments on the economy of a country based on what you've said of the same country.
Buying new goods on a regular basis, creates a healthy economy. Not doing so contributes to the financial collapse that Italy just had.
WHAT? that's basically Reagonomics right there - spend your way into success.. lol
It's trickle down, to some degree. But it is more general than that, it's just "if everyone is working, the economy will improve" which is the line that high schools have been told to use to encourage people to head off to the factories without questioning why.
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@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
In the future we expect that most people will be idle and that there will be almost no work to be done, yet we expect the economy to continue to grow. An economy is the buying power of what you have, not the amount of busy work you can keep people doing.
This is the part that I don't understand how it sustainable.
Where is the concern? We create more, have more money... it's what we currently do that is potentially not sustainable. Anything that grows the economy without negatives is more sustainable than something that does not.
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@scottalanmiller said in Buying vs Saving Economic Theory:
@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
In the future we expect that most people will be idle and that there will be almost no work to be done, yet we expect the economy to continue to grow. An economy is the buying power of what you have, not the amount of busy work you can keep people doing.
This is the part that I don't understand how it sustainable.
Where is the concern? We create more, have more money... it's what we currently do that is potentially not sustainable. Anything that grows the economy without negatives is more sustainable than something that does not.
It's nearly impossible to think of a situation where 98% of the world doesn't work. Now that 98% wants to do whatever they want, that having a job prevented them from doing if for no other reason than they didn't have time.
Let's take travel - would it increase or seriously decrease? If you either a) lower the cost of flights (because now you need 10x as many planes to handle the load, so costs go down) or b) give enough money so everyone who wants to travel now can - which would increase demand anyway - how do you handle the increased load of people at tourist spots?
Do things like luxury items no longer matter/exist?
If everyone does really have access to all of the same stuff as everyone else, then crime probably wouldn't be worth as much short of the rare things like one of a kind paintings, etc - which then brings about a whole new type of economy, so money and normal things no longer matter, but that Renoir still does, just like new one of a kind items. There will always be something that is unique that someone else wants - that generates it's own system if it doesn't work inside the current one. -
@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
In the future we expect that most people will be idle and that there will be almost no work to be done, yet we expect the economy to continue to grow. An economy is the buying power of what you have, not the amount of busy work you can keep people doing.
This is the part that I don't understand how it sustainable.
Where is the concern? We create more, have more money... it's what we currently do that is potentially not sustainable. Anything that grows the economy without negatives is more sustainable than something that does not.
It's nearly impossible to think of a situation where 98% of the world doesn't work. Now that 98% wants to do whatever they want, that having a job prevented them from doing if for no other reason than they didn't have time.
So two things:
- Work doesn't power the economy, so having people working does nothing to maintain sustainability.
- Think of "work" as "productive work" and then realize that 98% are not working today.
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@scottalanmiller said in Buying vs Saving Economic Theory:
Think of "work" as "productive work" and then realize that 98% are not working today.
What is "productive work" building buildings and bridges and roads... That certainly seems productive...
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@Dashrender said in Buying vs Saving Economic Theory:
Let's take travel - would it increase or seriously decrease? If you either a) lower the cost of flights (because now you need 10x as many planes to handle the load, so costs go down) or b) give enough money so everyone who wants to travel now can - which would increase demand anyway - how do you handle the increased load of people at tourist spots?
Almost certainly increase as people would have the time to do so and the flexibility.
The cost of the top tourists spots, say the Colosseum and Louvre, would go up to keep crowds down while places like the central Texas Gulf Coast that sees zero tourism today would get busier. Tourism would change, naturally, as top places got more expensive and more places stepped in to fill the vacuum.
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@dafyre said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
Think of "work" as "productive work" and then realize that 98% are not working today.
What is "productive work" building buildings and bridges and roads... That certainly seems productive...
Sure, but that goes into the 2% along with everything else.
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@dafyre said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
Think of "work" as "productive work" and then realize that 98% are not working today.
What is "productive work" building buildings and bridges and roads... That certainly seems productive...
That is... if the buildings and roads are needed. Just building to build is not productive. Productive is "enhances the economy" in this context.
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@dafyre said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
Think of "work" as "productive work" and then realize that 98% are not working today.
What is "productive work" building buildings and bridges and roads... That certainly seems productive...
Lots of which can be done with half or a third of the crew and additional automated machinery. Which we are starting to see more and more of in the US, road crews often have people sitting there with a stop sign... how is that considered productive work?
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@scottalanmiller said in Buying vs Saving Economic Theory:
@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
@Dashrender said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
In the future we expect that most people will be idle and that there will be almost no work to be done, yet we expect the economy to continue to grow. An economy is the buying power of what you have, not the amount of busy work you can keep people doing.
This is the part that I don't understand how it sustainable.
Where is the concern? We create more, have more money... it's what we currently do that is potentially not sustainable. Anything that grows the economy without negatives is more sustainable than something that does not.
It's nearly impossible to think of a situation where 98% of the world doesn't work. Now that 98% wants to do whatever they want, that having a job prevented them from doing if for no other reason than they didn't have time.
So two things:
- Work doesn't power the economy, so having people working does nothing to maintain sustainability.
- Think of "work" as "productive work" and then realize that 98% are not working today.
OK, that's fine - but people need something to do. And personally I feel that most people need an outside source telling them what that something is. Otherwise they become listless. In the short term, if you tried to enact this today, even if you gave everyone enough to buy whatever they wanted to have fun locally (damn hard to put a cap there, right?) I bet crime would still skyrocket.
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@scottalanmiller said in Buying vs Saving Economic Theory:
The cost of the top tourists spots, say the Colosseum and Louvre, would go up to keep crowds down while places like the central Texas Gulf Coast that sees zero tourism today would get busier. Tourism would change, naturally, as top places got more expensive and more places stepped in to fill the vacuum.
Those places are already cheap today - why aren't people going there now? and why would they suddenly want to start going there in the future?
Is it because they simply can't, because lack of time and finances? I suppose, but we look at how much the population has already congregated at the coasts, I think it would get even worse in a situation where you go anywhere because there would be little to nothing holding you down.
Of course, how do you handle the transition of the current middle class, or even the wealthy - i.e. the beach houses, etc... you're putting 98% all on the same level, most of those awesome places to live would have to be completely redone, or they would simply be vacant - but you still have the rare resource of beach front property, other than the 2% who will probably get more than the 98%, how do you decide who gets to be at the ocean and who doesn't?
Yes we've moved away from the economy discussion, perhaps this post needs to be in your new thread?
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@coliver said in Buying vs Saving Economic Theory:
@dafyre said in Buying vs Saving Economic Theory:
@scottalanmiller said in Buying vs Saving Economic Theory:
Think of "work" as "productive work" and then realize that 98% are not working today.
What is "productive work" building buildings and bridges and roads... That certainly seems productive...
Lots of which can be done with half or a third of the crew and additional automated machinery. Which we are starting to see more and more of in the US, road crews often have people sitting there with a stop sign... how is that considered productive work?
Right, if we had automated cars, no need for that. And if the machinery was self driving, that's a ton less crew. We are just a few years away from nearly all road construction being fully automated AND being able to happen during the holidays and weekends instead of during rush hour.
