Today and yesterday’s Democratic debates suggests a big recent bump in tastes for regulation and redistribution, in order to lower the status of big business and the rich, and to spend more on the needy and worthy causes. South Korea, which I’ve just visited,
That 1.5% was from Piketty I think. Those high growth percentages in the 3s and 4s from the late 1800s were interspersed with more frequent recessions, bringing the average down to 1,5% back then as well. I don't think we have ever seen an average rate of growth in excess of 1,5% for any extended period of time!
The rise in inequality is consistent with Trump era policies doubling down, reduced growth and deflationary conditions of the Great Depression, and with the transition of the Roman Republic to Empire. Waiting for ongoing evidence would likely prove too late to rectify..
If your concern though is the rich will 'invest' more in extraction of tax benefits and political rents, you would do better to tax them now to make this harder and less possible.
Have you given any thought to how the optimal "grab-time" could be aligned with the political economy needed to actually make the grab? Intuitively it seems as though these two would not necessarily be naturally aligned (e.g. in an emergency mob demands grab when the rich's wealth is at a relative low point).
Could one take the argument one step further? We should create negative tax rates now to give the population money to invest. Does this not get to the flaw in the argument? Since we cannot borrow at a lower rate than the population has access to this can not be profitable.
But the number of people living in absolute poverty is falling rapidly so we better give now or there will be no one who needs as much in the future?
On the other hand if you are very frightened about Global Warming you might want to hold off and give more when people in Bangladesh are in dire straights.
Yah, Robin's comment above mostly convinced me of that point. I mean I suppose if we compute the true rise in economic output by appropriately accounting for the value we place on the development of previously non-existent products it might be greater than 1.5 but that 1.5 won't become 5.
Thanks for the clarification. I got the impression you were singling out rich people as opposed to non-rich people. Do you think there is an overall difference between the quality of rich person and non-rich person charity efforts?
And my point is that it's not an all-or-nothing choice.
Virtually nobody is so hungry that they'll die from a *small* postponement of current consumption to invest for larger future consumption.
"Poor people are too poor to invest" is a fallacy - they may be limited in how much they can invest (as are we all), but there is always *some* marginal consumption that can be postponed.
That 1.5% was from Piketty I think. Those high growth percentages in the 3s and 4s from the late 1800s were interspersed with more frequent recessions, bringing the average down to 1,5% back then as well. I don't think we have ever seen an average rate of growth in excess of 1,5% for any extended period of time!
The rise in inequality is consistent with Trump era policies doubling down, reduced growth and deflationary conditions of the Great Depression, and with the transition of the Roman Republic to Empire. Waiting for ongoing evidence would likely prove too late to rectify..
I can see this as a theoretical concern, but I don't think it fits the facts very well.
If your concern though is the rich will 'invest' more in extraction of tax benefits and political rents, you would do better to tax them now to make this harder and less possible.
Have you given any thought to how the optimal "grab-time" could be aligned with the political economy needed to actually make the grab? Intuitively it seems as though these two would not necessarily be naturally aligned (e.g. in an emergency mob demands grab when the rich's wealth is at a relative low point).
Doesn't work. To see why, think of investment in supply and demand terms.
I expect there to be plenty of future problems and crises worth effort to mitigate.
Could one take the argument one step further? We should create negative tax rates now to give the population money to invest. Does this not get to the flaw in the argument? Since we cannot borrow at a lower rate than the population has access to this can not be profitable.
But the number of people living in absolute poverty is falling rapidly so we better give now or there will be no one who needs as much in the future?
On the other hand if you are very frightened about Global Warming you might want to hold off and give more when people in Bangladesh are in dire straights.
See the added to the post.
Ah, thanks.
Yah, Robin's comment above mostly convinced me of that point. I mean I suppose if we compute the true rise in economic output by appropriately accounting for the value we place on the development of previously non-existent products it might be greater than 1.5 but that 1.5 won't become 5.
A rich person can create their own organizations; the rest of us mostly have to choose among existing orgs.
Thanks for the clarification. I got the impression you were singling out rich people as opposed to non-rich people. Do you think there is an overall difference between the quality of rich person and non-rich person charity efforts?
And my point is that it's not an all-or-nothing choice.
Virtually nobody is so hungry that they'll die from a *small* postponement of current consumption to invest for larger future consumption.
"Poor people are too poor to invest" is a fallacy - they may be limited in how much they can invest (as are we all), but there is always *some* marginal consumption that can be postponed.
The relevant standard here is what government would do with the money instead.