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Old 05-14-2014, 03:09 PM   #21
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Ordered the book from the library two weeks ago. I'm number 44 in the holds queue! While waiting, I'm reading "All the President's Bankers". Incredibly enlightening. And depressing.
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Old 05-14-2014, 04:59 PM   #22
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What is meant by income transfer?
government payments like Earned Income Credit, food stamps, and other help. I think SS and medicare/medicaid also count as income transfers.
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Old 05-14-2014, 05:25 PM   #23
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If you have money at retirement, you really don't need to have manage your money well-because most Americans are not doing well.
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If I may ask: What does this mean?
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When the bear is chasing you and tent mate, You only have to run just a step ahead of your slower partner. No sense in busting a gut when you are not dinner.
Obviously, we have to manage our money well in retirement if we want to have a satisfactory quality of life regardless of whether others are doing well or poorly. If the "inflation bear", or "market bear" (tee hee) gobbles up my neighbor it doesn't benefit me at all.
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Old 05-14-2014, 05:45 PM   #24
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PBS Newshour is running a 3 part series on the book, tonight's episode featured a pretty interesting debate on the book from a liberal think tank woman and I guy from the
AEI.

The AEI guy thought his data on inequality was quite good. However, Piketty ignores income transfer which seems to be a pretty big deal.

It is on my list of possible books to read, but I've been reading some heavy books lately and need something light.
Thanks for the link clifp.

I thought Heather Bouchet didn't even try to counter Kevin Hasset's assertions and that left me disappointed. I had to go look up her bio to know that she is indeed an economist.
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Old 05-14-2014, 08:29 PM   #25
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Wonder how many ER types would be amenable to a wealth tax.

It kind of punishes people who save and plan responsibly to have retirement income, vs. the majority of retirees who don't have much savings at retirement.

Presumably though, the wealth tax would target people who have much greater wealth, perhaps like the estate tax which exempts what, the first couple of million?
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Old 05-14-2014, 09:17 PM   #26
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Presumably though, the wealth tax would target people who have much greater wealth, perhaps like the estate tax which exempts what, the first couple of million?
I doubt it. Oh sure, at first, but it would cover more and more people over time - much like the income tax has.

And I'm sure that if this ever came to pass, we (us clever humans) would figure out many many work arounds. Of course hiding wealth would hugely distort the economy, but that's not really the point is it.

Frankly I'd much rather see us go in the opposite direction: get rid of the income tax and replace it with a consumption tax (replace, not add in beside the income tax). This would encourage people to save and build wealth. I guess I'm just too old fashioned...
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Old 05-14-2014, 09:39 PM   #27
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Wonder how many ER types would be amenable to a wealth tax.

It kind of punishes people who save and plan responsibly to have retirement income, vs. the majority of retirees who don't have much savings at retirement.

Presumably though, the wealth tax would target people who have much greater wealth, perhaps like the estate tax which exempts what, the first couple of million?
See post #7 above.

If those numbers are correct, it would have very little impact on American wage earners who simply defer spending to a later age.
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Old 05-14-2014, 10:58 PM   #28
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I'm a big fan of actually reading a book before discussing it's contents, but I am also widely considered to be some sort of weirdo.

Lets all be careful to stick with economics here and avoid wobbling off into political ideology-land.
What? You expect people to consider mere facts before stating an opinion? That is strange!
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Old 05-14-2014, 11:48 PM   #29
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I'm a big fan of actually reading a book before discussing it's contents, but I am also widely considered to be some sort of weirdo. ....
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What? You expect people to consider mere facts before stating an opinion? That is strange!
I guess I saw this thread more like getting information from book reviews. Plenty of people read a book or movie review beforehand. That's not strange, is it?

Especially with a 700 page book - more motivation to try to get some info on it before deciding to tackle it or not.

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Old 05-15-2014, 12:10 AM   #30
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What? You expect people to consider mere facts before stating an opinion? That is strange!
I stated that there was a very good review in the issue of the economist that week. I also clearly stated that I hadn't read the book yet. I believed a good review in a magazine to be relevant to the OP.

I made it half-way through Capital and this book is frankly too slow and repetitive. I read one a couple years back called "The haves and the have nots", written by a lead economist with the World Bank I believe. That book was very interesting and looked at social / political stability as a function of inequality over the past few thousand years. Short, sweet, and very informative.

This other book is a bit of a fad IMO.
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Old 05-15-2014, 05:26 AM   #31
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What is meant by income transfer?
Certainly any of the anti poverty programs would count as income transfer. Probably most Agriculture subsidies. I am not sure about SSI, but SDI definitely would count and I don't know about Medicare.

These can be quite substantial. For another forum I calculated that Single mother with a young child working full time at the minimum wage $7.25/ hour $1200/month would be eligible for $280/month earned income tax credit, a SNAP (food stamps) of $250-$500/month and WIC payment of another ~100/month in many case boosting her monthly income from $1200 to $2,000+ month.

The $80 billion spent on SNAP distributed to 40 million+ is pretty clearly significant boost to the income of those at the bottom.
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Old 05-15-2014, 07:35 AM   #32
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700 pages to say what my mama told me years ago - the rich get richer
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Old 05-15-2014, 10:39 AM   #33
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the rich get richer
The rich will always be getting richer over time, unless civilization subsides.

What I care about is are the poor getting richer too? In the US, if you count transfer payments, the answer is certainly yes.
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Old 05-15-2014, 12:32 PM   #34
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But not at the same pace as the rich.

That's the rub, the widening gap, the increasing inequality.
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Old 05-15-2014, 01:00 PM   #35
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> That's the rub, the widening gap

See I just don't get it.

If I double my income I'm much better off.

If the person over there quadruples their income I'm still better off, not worse off.

Isn't the "increasing inequality" issue simply envy?
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Old 05-15-2014, 01:04 PM   #36
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Isn't the "increasing inequality" issue simply envy?
No, it's not. Do some research - lots of information available online.
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Old 05-15-2014, 01:05 PM   #37
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But not at the same pace as the rich.

That's the rub, the widening gap, the increasing inequality.
There are some who see this as a simple reversion to the mean, an undoing of the temporary surge in middle class population from the 20th century.

The normal state of population vs standard of living was a pyramid for most of the past 6,000 years, with a small portion of the population quite well-off compared to the multitudes at the 'base of the pyramid.' Our post-WWII flattened-diamond pattern with it's relatively "level" social order was fairly unique, with a relatively high overall standard of living, and high levels of economic activity as much of the wealth of the society was actively moving through the economy, promoting growth and competition.

We may be moving back to the longer term stable state of much of the population living at a relatively low standard of living compared to the capabilities of our civilization, with much of the wealth of the society concentrated in a relatively small portion of the population, and withheld from active use in the economy in favor of rent-seeking activity. This represents an inefficient use of capital, which bothers some economists.

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Old 05-15-2014, 01:07 PM   #38
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Reversion to the mean?

Some have said there's greater inequality now than during the Gilded Age and the robber barons.

Historically, certain levels of inequality have led to civil unrest. That may or may not happen now but there's the other question of whether having wealth more concentrated is the best thing for economic growth.
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Old 05-15-2014, 01:13 PM   #39
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Reversion to the mean?

Some have said there's greater inequality now than during the Gilded Age and the robber barons.

Historically, certain levels of inequality have led to civil unrest. That may or may not happen now but there's the other question of whether having wealth more concentrated is the best thing for economic growth.
I haven't read Piketty's book, but there was an article in Time this last week about it. One of the things mentioned in the article is resulting civil unrest...such as what happened to the French aristocracy.

There also seems to be correlation between extreme inequality and volatile market events. I'm not able to make the case for causation, if it exists.
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Old 05-15-2014, 01:16 PM   #40
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> That's the rub, the widening gap

See I just don't get it.

If I double my income I'm much better off.

If the person over there quadruples their income I'm still better off, not worse off.

Isn't the "increasing inequality" issue simply envy?
This is what I wonder also (and I'm not saying either view is right/wrong - it's just a question).

But let's say we implemented a new plan in our schools, and ten years later did a full evaluation. If every group of students, from the lowest 10% group to the highest 10% group, had significant improvements in their test scores, but the highest 10% had relatively higher levels of improvement, would we call that a 'failure' or a 'success'? Would we be glad that everyone is doing significantly better, or feel bad that the 'gap' widened?

And I still think it is important to look at the global economy, rather than any specific country's economy. We may have a widening gap in developed countries, but if the developing countries are improving, maybe the global gap is narrowing? Personally, I think it is more important that the really poor people in this world ( literally risking starvation, devoid of a regular supply of clean water and basic medical standards) are moving up, than it is for a 'lower economic strata' person in the US to move closer to the upper tier in the US.

-ERD50
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