The Wall

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Originally Posted by Savy

How about we just don't give that person any money?

Tbf though the assumption that people understand money, financing and such things on even a basic level just isn't true. In fact people who do understand such things tend to have incentive to exploit the people who don't so I don't imagine that changing any time soon.

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You are correct. A significant reason why so many people don't understand personal finance is they don't have much of a reason to anymore, largely due to government handouts, government mandated insurances, other regulations, and other cultural factors (like less cultural stigma to relying on others to take care of you).

People used to have a much more firm grasp of personal finance. Independence from government and adoption of Protestant ethics/communities made sure of that.

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Originally Posted by BananaStand

It's like you're suggesting that we just suck it up when someone chooses to spend their food budget on a Cadillac and then applies for food stamps to cover the difference. It doesn't have to be like that. A more rigorous and nuanced method of means testing could solve that easily.

Say you take home $2,500 per month. Rent = $1,000, Utilities $250, Cable/Net = $200, Car payment = 750, Gas = $100, Cell phone=$200. That's all your money and you haven't bought any food yet. Say you need $600 more to buy food every month.

Should the government just give that away?

Or should the government be allowed to evaluate the finances, at least a high level, and determine if there is really a "need"? The government knows what shit costs, that's how they calculate CPI and other economic metrics.

the government could easily say that a reasonable car payment for someone of your income level and geographic region is more like $500 per month. The gov't could use that figure as a 'cap' on the expenditure claim. So now the numbers read like this

$2,500 - Rent - Utilities - Cable - Car (capped at $500) - Gas - Cell = $250

In this example, I believe the government should only give away $350. That plus the additional money that SHOULD be left over makes up a total of $600 needed for food.

Then that citizen has the choice of driving a nicer car but eating less, or eating reasonably and driving a reasonable car. People should not be free to make that choice at the expense of other citizens. The choice should be made at their own expense.

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I caution that this could carry with it some substantial unintended consequences. This would likely open the door to greater intrusive power of bureaucracy and greater acceptance of dependency by citizens.


When we get down to brass tacks, the only reason the government should provide for somebody is to increase their productivity. Doing so for any reason that reduces their productivity is unfair to the productive since they are the ones paying for it (this means unfair to most people). I have been unable to develop a cohesive argument for how government can intervene into personal exchange to make them more productive than otherwise. I can't even recall seeing an economist do it. Given this, it is probable that people are better off when the government doesn't try to help them.

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Originally Posted by BananaStand

It's like you're suggesting that we just suck it up when someone chooses to spend their food budget on a Cadillac and then applies for food stamps to cover the difference. It doesn't have to be like that. A more rigorous and nuanced method of means testing could solve that easily.

Say you take home $2,500 per month. Rent = $1,000, Utilities $250, Cable/Net = $200, Car payment = 750, Gas = $100, Cell phone=$200. That's all your money and you haven't bought any food yet. Say you need $600 more to buy food every month.

Should the government just give that away?

Or should the government be allowed to evaluate the finances, at least a high level, and determine if there is really a "need"? The government knows what shit costs, that's how they calculate CPI and other economic metrics.

the government could easily say that a reasonable car payment for someone of your income level and geographic region is more like $500 per month. The gov't could use that figure as a 'cap' on the expenditure claim. So now the numbers read like this

$2,500 - Rent - Utilities - Cable - Car (capped at $500) - Gas - Cell = $250

In this example, I believe the government should only give away $350. That plus the additional money that SHOULD be left over makes up a total of $600 needed for food.

Then that citizen has the choice of driving a nicer car but eating less, or eating reasonably and driving a reasonable car. People should not be free to make that choice at the expense of other citizens. The choice should be made at their own expense.

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Can't ever realistically happen as all car companies will send armies of lobbyists to tackle this immediately. Heck, they will probably even sue the government.

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Originally Posted by Jack Sawyer

Can't ever realistically happen as all car companies will send armies of lobbyists to tackle this immediately. Heck, they will probably even sue the government.

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The UK government not that long ago put in a minimum scrapping price of cars and as a result the bottom end of the used car market just disappeared.

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Originally Posted by Jack Sawyer

Can't ever realistically happen as all car companies will send armies of lobbyists to tackle this immediately. Heck, they will probably even sue the government.

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They would lose

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Originally Posted by Savy

The UK government not that long ago put in a minimum scrapping price of cars and as a result the bottom end of the used car market just disappeared.

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LOL, doesn't that affect the cheapest shit cars? Better cars mean more money has to be spent on the procurement of those cars, right?

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Originally Posted by Jack Sawyer

LOL, doesn't that affect the cheapest shit cars? Better cars mean more money has to be spent on the procurement of those cars, right?

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What do you mean? I'm saying your car basically has a guaranteed scrap price, not so much a bad thing but market adjustments don't happen so it is, therefore any car you could buy that cost you less than x (x is scrap price of your car) you can no longer buy. We're talking old crappy cars at this point but that doesn't mean they aren't old crappy cars you can get time out of. The knock on effect of this is that EVERY car gets slightly more expensive because you don't just delete the cars worth less than that you also raise the value of every car slightly above that and that knocks on to every other car (decreasing as you go up). So that £400 car you might have bought is £450, etc.

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Originally Posted by Savy

What do you mean? I'm saying your car basically has a guaranteed scrap price, not so much a bad thing but market adjustments don't happen so it is, therefore any car you could buy that cost you less than x (x is scrap price of your car) you can no longer buy. We're talking old crappy cars at this point but that doesn't mean they aren't old crappy cars you can get time out of. The knock on effect of this is that EVERY car gets slightly more expensive because you don't just delete the cars worth less than that you also raise the value of every car slightly above that and that knocks on to every other car (decreasing as you go up). So that £400 car you might have bought is £450, etc.

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Indeed, every car gets more expensive, therefore more money has to be spent on the procurement of those cars, right?


Making things more expensive is not in the interests of the poor and the marginated in any case. Which is probably why the more bottom end of the market dissapeared. But I dunno about this issue and it's not really relevant right now, so to steal your own words, cba.


And yet my point was that in bananastand's particular example above


a) Realistic prices for quite many people, but also realistic because no savings are taken into accoount. I guess, when living paycheck to paycheck, one cannot 'afford' to save even in theory


b) By introducing a some sort of mythical government ceiling on a specific debit entry in any budget, you allow for allocation of those freed funds into something else. Yet, in this example, the specific affectees by this introduced ceiling would make so much noise to all the winds that it would be overturned in a snap. That, and lobbyists.

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Originally Posted by Savy

not so much a bad thing but market adjustments don't happen

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Indeed

That's fair enough.

I'm just saying same car more expensive whilst also stopping you buying a % of the market. This isn't your point clearly.

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Originally Posted by Jack Sawyer

when living paycheck to paycheck, one cannot 'afford' to save even in theory

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Sure you can (unless you're referring to how somebody living paycheck to paycheck definitionally isn't saving).

I've known a lot of working-low-middle-class people. They all have one thing in common: they throw their money down the toilet and complain about how they live paycheck to paycheck. A commonality among more well off people is tendency to save regardless of income level. In fact, one of the best ways (and probably the single most underrated way) to move up in wealth is to consistently spend less than you make.

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Originally Posted by wufwugy

In fact, one of the best ways (and probably the single most underrated way) to move up in wealth is to consistently spend less than you make.

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The math checks out.