12 December 2012

comments from MMM economics / philosophy / politics threads

comments from MMM economics / philosophy / politics threads

I am a regular reader and contributor to the Mr Money Mustache discussion board forums.

Its mostly talk and advice regarding money management, DIY projects, bicycling as transportation, energy use, investment strategy, and various other ways to have more wealth by living more efficiently.
Every once in a while, though, a philosophical / political / social topic comes up, and the discussions especially interesting.

Here I have consolidated a number of my input and responses to some of the more intense conversations that have come up in recent months (with quotes of what I am responding to, for context); things which I feel are important and interesting, which respond to very common ideas, but which I never had quite the right formatting to turn it into its own blog entry.
Sometimes you need a good antagonist - preferably someone intelligent and knowledgeable (but wrong) - to play off of, to respond to, in order to make a point coherently.
The indented, highlighted text are quotes that are being responded to.  The further indented, different color highlighted parts are quotes within quotes.

The first 3 were all closely related, and, randomly enough, was spawned originally by a thread on how much the average American spends at Starbucks:

By Sol:
« on: July 27, 2012, 04:24:05 PM »

One of the primary ideas presented by this blog is that individuals can free themselves to pursue their personal interests and values by freeing themselves from workaday slavery.  MMM says if you save a large fraction of your income you can retire early, and then spend your time on things that really matter to you.  He's chosen to be a full-time parent to his son, but someone else might choose to open a bike co-op or build orphanages or travel the world.

This ERE plan assumes that people have some value system that they wish to pursue, something they want to accomplish in life that they cannot do while working a 9-5.  I will not presume to tell anyone what that value system should be, but instead posit that everyone has one whether they recognize it or not.

The proposed method of achieving the financial freedom that will facilitate this goal is frugality; cut your expenses low enough by recognizing that you don't need "more" to be happy, and you can then save enough money to support those low expenses in only a few years.  Once you no longer need to work for money, you can chase your dream instead.  The more expenses you can cut, the sooner you can get on with the really important stuff.


The single-minded focus on achieving personal wealth through frugality has, for many people, displaced the larger focus on achieving freedom to pursue personal interests and values.  It's like some mustachians have turned to the dark side of the force.


If what you really value is the lifestyle you envision for yourself after early retirement, why would you sacrifice that lifestyle in the runup to retirement?  In MMM's case, would it have made any sense for him to have a child at age 23 and then work 15 hour days and never see his child until he achieved FI, retired, and became a full time parent?

What other goals that you value are you sacrificing in the blind pursuit of the financial independence that you think will enable pursuit of those same goals?

For me, one of my personal goals for my post-retirement life is to do my little part to make the world a better place.  Without any promise of rewards in an afterlife, I focus on the here and now.  Here and now, many of the 7 billion people on earth suffer horribly from preventable diseases, poor sanitation, oppressive governments, and a host of other maladies that individuals in the here and now have the power to fix, and I find it morally repugnant that a person with a million dollars in the bank would think it better to spend his money on a $4 latte five days a week than on feeding a starving child who would otherwise suffer and die a miserable death by virtue of having lost the lottery of birth.

I was born into an Amercian society that rewards hard work and ability with opportunities for wealth, opportunities that are not available to most of humanity.  I feel a certain sense of obligation accompanies my birth-priviliege, and I cringe when my fellow Americans instead claim they are entitled to third-row seating in their SUVs because they "earned it".

If you passed a child flailing in a duck pond in a city park, would you walk by and let her drown?  Would you call for help, or maybe even wade in yourself?  I think most of us would feel a moral imperative to offer help somehow, even to a total stranger, even at risk of personal loss, to help a drowning child.  Having travelled to the far corners of the world and seen the conditions under which much of humanity labors, I sometimes find it difficult to justify my continued devotion to growing my stache, to diligent savings and investments in the US stock market, to tax sheltered investments and asset allocations and Roth IRA rollover plans.

Sometimes I tell myself that this is the "accumulation stage" of my financial life, that after I FIRE I will have the time and resources to make a difference, but that just feels like an excuse to not make a difference today.  What's worse, I firmly believe that habits are borne of practice, and that by diligently practicing a rigorous investment plan that does not figuratively reach out to that drowning child by allocating a portion of my income to charity, I am instead teaching myself not to care, to ignore the needs of the less fortunate, and setting a poor example for my children, my family, and everyone else I know (including, strangely, anonymous you).


I'm still conflicted about this aspect of mustachianism.  On the one hand, I fully support the idea of reducing your wasteful spending and freeing yourself from the need to work to support your family.  On the other, such dedicated focus on that goal can potentially cloud your vision of the larger goals that early retirement is supposed to enable.  In some cases, I think people might sacrifice their personal values while pursuing financial independence, thinking FI will allow them to enact and support those same value.

Please don't forget WHY you want to retire early.  Your motivations need not be the same as mine, but whatever they are, try to keep them in mind while you're considering which pennies to pinch, and which to use."


Quite a few interesting responses, and you can click the hyperlink at the beginning of the quote if you'd like to read them all.
This will be long enough without pasting everything, so I'm skipping ahead to my own comments


« Reply #13 on: July 28, 2012, 06:52:41 AM »
Even somebody who reduces her consumption so that she can become a selfish prick is probably still reducing her environmental impact, at least.

This is true, but incidental.  If she reduces her environmental footprint through mustachianism so that she can retire at 30 and watch tv for the next 50 years, then environmentalism probably wasn't high on her value list.  She hasn't fulfilled her values by adopting the philosophy.

....  We can't provide an American standard of living to 7 billion people under the current economic model.  So instead, we blithely enjoy the luxuries afforded to us by the luck of our birth geography, filling our landfills with plastic crap while the rest of the world dies of diarrhea.
I think you are grossly underestimating the environmental impact.  The whole reason Americans have 20 times the footprint of the average human is our cars and our consumption.  A person who lives a deliberately frugal lifestyle - regardless of the motivation - doesn't have an "American standard of living".  They aren't buying and throwing out endless plastic crap.  They aren't driving 50 miles a day - both from their home in the 'burbs to a job in the city, and to the corner store 2 blocks away. 
According to various online footprint calculators, if everyone in the world lived like a typical American, we would need 5x the resources than exist on the planet.  If everyone lived like - oh, I don't know, say, like me - it would be sustainable for the entire (current) human population indefinitely. 
It is precisely because so many American's feel the same self-righteousness as tooqk that I find the growing mustachian movement so exciting - it doesn't matter if people are doing it for the wrong reasons, if the results are positive.


By Bakari:
Re: your mustache might be evil
« Reply #15 on: July 28, 2012, 07:09:33 AM »

Sometimes I tell myself that this is the "accumulation stage" of my financial life, that after I FIRE I will have the time and resources to make a difference, but that just feels like an excuse to not make a difference today.

There has to be some pragmatic trade-off here.  As you (I think it was you) have noted in previous posts, there comes a point at which many people on this path to ERE can expect compounding returns to go exponential, and far surpass what they need to be FI.
Lets say you make 50k, and spend 10k.  You could be very generous, and give away that 40k difference every year.  And you will always be at the same level of savings, have to work forever.  Or you could invest it all, and in 5 years when your investment returns pay your living expenses, you could start putting that full 50k of income to giving - while your net worth continues to rise, allowing you to add in even more to that amount.  In 10 years you could be donating 40k worth of investment returns AND be able to retire giving you time to volunteer full time.

The way to not let the accumulation phase not be an excuse is to know (in advance) how much is enough.  That is what sets this way of FI apart from the "make as much money as possible" methods.  The lack of lifestyle inflation.  When you reach your goal, don't move the goal post. 
If a non-profit tried to start helping people on day 1 - without having taken the time to do some grant writing and fundraising - its going to close down on day 2, and will not have done anyone any good.

By Bakari:
Re: your mustache might be evil
« Reply #24 on: July 28, 2012, 01:31:09 PM »
The very capitalist mechanism that fuels FI may be one impediment to improving humanity, precisely because it promotes a social arrangement that necessarily denies some portion of the population the necessary conditions for cultivating habits of self-improvement. There was a brief post on the ERE site that raised this issue ( On Elevating Humanity), couched in terms of job-owning and job-working. FI essentially involves freeing ones time from job-working to pursue activities of "self expression," to use Jacob's works, via becoming a job-owner. Of course, you can't be a job-owner if there aren't any jobs to own, which means that you are an agent in denying others the very leisure you seek for yourself and for humanity in general.

I don't think this is true.
It ignores the truly massive increase in productivity due to increases in technology that have occurred over the past couple centuries.
It would be possible for everyone in society to have basic necessities covered by a tiny fraction of the labor that it would have required any time previously in human history.  Productivity has increased something like 10-fold since the 1950s alone, which means that we could all live lives of material wealth equivalent to those times with 10 times less labor per person.  That could translate to either 4 hour work weeks for a 40-year working life, or 40 hours a week for 10 years, or any combination in between.
What we as a society have chosen to do instead is have meaningless lifestyle inflation at every level of income, and make the wealthy unimaginably wealthy.  Nearly all of the gains in productivity have been distributed to the top 0.01% (where they have the least marginal utility).

The only reason everyone needs to work 40 hours a week for a lifetime is to keep producing all the crap that we ourselves are consuming.

If everyone here was trying to retire as millionaires living a lavish life, then yes, it would inherently require exploitation.  But retiring by consuming less means there is less work that needs to get done (no one has to produce all the crap you aren't buying)

I don't believe there is any inherent reason that society couldn't chose to institute (for example) a 10 hour work week, and/or a sharply progressive redistribution system with no ceiling bracket, which would mean everyone would contribute less, and everyone would be able to pursue non-work goals in life

By Bakari:
Re: your mustache might be evil
« Reply #44 on: July 30, 2012, 01:38:05 AM »

From where I'm standing, the dots say that if you hit your retirement goal dollar amount and then quit working rather than put in one more day for another $100, you've effectively forsaken control of that $100 that you could have allocated to a cause you support.  The hidden icebergs of our ongoing conversations here are all related to making value judgments about the best use of those dollars.  Once we accept that upgrading to the new iphone is a stupid waste of my working career hours, why do we instead opt for retirement instead of malaria medication, or pertussis vaccinations, or HIV research, or counseling for women from abusive relationships, or even anything on Kiva or Kickstarter.

Because no one, no matter how much of their lives they devote to helping others, is ever going to save the world. 
It doesn't matter how noble a goal it may be, it isn't going to happen. 

Most of us in this discussion seem to agree that those with the means may be in some way morally obligated to help those in need, but this does not make each individual personally responsible for saving the world. 
Suggesting that one shouldn't retire because they could hypothetically earn money to give to charity is the exact same extreme that Tooqk sarcastically suggested earlier.  It sounds like you are saying that if one does any less than devote 100% of their time and resources to helping others, they are amoral.  That's just silly. 

Each of us is ourselves also a living being with the capacity to feel pleasure and suffering.  If we ignore our own lives for the sake of service, we are likely to end up doing more harm than good, as the marginal utility of our time and resources we spend on others drops relative to the utility it would have if it were used "selfishly".

The difference between the latest smart phone and retiring early is that the phone brings extremely little real, meaningful, or lasting joy into the life of the consumer, while (depending on your job on your personality) early retirement actually can.

By Bakari:

Re: your mustache might be evil
« Reply #45 on: July 30, 2012, 01:45:58 AM »
Bakari's suggestions about cutting to a 10 hour workweek have come up a few times, but I've yet to hear him suggest how to prevent some enterprising young soul from working a full 60 hours instead to amass more than his fair share of the wealth, then using his surplus capital to be a "job owner" and thus make even more money, cementing the cycle.  Yes, technology has made it possible to work less.  Human greed still requires us to all work as hard as possible to avoid falling relatively behind the Joneses, though, lest Mr. Jones create a monopoly.

When there was no such thing as overtime, it was normal for workers to work between 80 and 100 hours per week.

What would prevent people from working more to make more wealth?  Well, for traditional employment, if employers had to pay double time, they won't want to let you.  What stops someone from having two or three jobs?  Nothing.  Just like nothing stops a 9-5 worker from taking a 2nd job and working 100 hours a week.  It can be done.  Some people even do.  Most wouldn't want to.
There may be the odd exception, but in general people who end up with dynastic levels of wealth didn't do it just by having 2 or 3 regular full time jobs, and there is no reason to assume that would change just because we adjusted the labor laws to match the present reality.

If some people want to work harder than others and make more money, they should have every right to do so.  But it should be our choice.  The situation we have now, where most work 40 hour weeks, some have mandatory overtime (unpaid if your on salary) and 8% of workers are unemployed, that's kind of ridiculous given the surplus productivity we have available.

If we divided the available labor (and the wealth it produces) more equitably, society would be in less need of charity in the first place.

By Bakari:
Re: your mustache might be evil
« Reply #51 on: July 30, 2012, 08:48:51 AM »
You can't start a successful business in a country overrun with barbarians, so you pay a little for national defense.  You can't find competent employees for your business if your neighbors are uneducated twits, so you pay a little for public education.  You can't transport your goods to market without roads or rails, so you pay a little for those too. 

Where have I heard this nonsense before.....oh and weren't taxes collecected when these things were created and on the ensuing commerce that resulted from it.
What do you mean "when these things were created"?  Those are not one time expenses, they are ongoing.
And the "commerce" is taxed via the income tax.  There is no national sales tax.
Actually I don't think I said taxes are an unfair burden but:

(1) the tax system, as you want it, is already geared to have those who have/make more pay more and those who don't pay less - sure there are some instances where A billionaire pays a low effective tax rate but the amount paid in absolute dollars is still sizeable and lets not forget that about half of the population pays no federal income tax and some even get money back - so if that doesn't balance it out I don't know what does.

It is very progressive - all the way to $300k annual income.
Only problem is, someone at the lowest end of the top bracket has an amount of income closer to a homeless guy than to the truly filthy rich billionaires.   We currently have about the least progressive tax rates (in terms of how high the top bracket is, and what percentage of society pays that top rate) than we have ever had - with the predictable result of increasing inequality.
(2) the government is horribly inefficient with its resources
Oh yeah it is!  But... If left to donations, how many people are going to willingly give their money to sexy projects like mosquito abatement or sewage treatment?  Also, why wouldn't the private charities doing the work of government become just as inefficient if they were tasked with nation level projects?  I suspect the main reason for government inefficiency is the sheer size of the country, in which case breaking each state into its own country would do more to reduce waste than privatizing government and replacing taxes with mandatory charity.
Ok, so maybe you think that if they cut my tax rate by 10% I would just pocket it/invest it and the system would just be out 10%, fine then give me the option to pay the 10% tax or do something charitable with it.  Oh wait a minute we already have this and it drives wealthy people to donate, which BTW results in a lower effective tax rate.
Exactly.  The system already allows this.  So what are you complaining about exactly?  No one here suggested removing the tax credit for charitable donations.  Doesn't that address your issue completely?  You don't want to pay taxes?  Give enough to your personal favorite charity to bring you AGI down to the zero effective tax bracket.
As for your Wal-mart example, it is their business and they should be able to do what they want and if it is unfair/undesirable then people can choose to not work/shop there and it would all end.

A single individual can't stop the local independent businesses from being displaced by a new WalMart coming to town with their own personal buying choices.  If they used to work in one of those shops that goes out of business, maybe now the only reasonable option left open to them is taking the WalMart job.  Business should not be allowed to just do whatever it wants, anymore than private citizens are able to do whatever they want.  If anything, less so.  We, as a society, get to decide what a business can and can't do.
(also supports my point that no TV/Radio or mass media ads of anykind should be allowed for political campaigns).

Glad we agree about at least one thing!

By Bakari:
Re: your mustache might be evil
« Reply #82 on: July 31, 2012, 01:20:34 AM »
no one, no matter how much of their lives they devote to helping others, is ever going to save the world.
It doesn't matter how noble a goal it may be, it isn't going to happen.

I'm going to break up this thread's trend towards civility because I know Bakari can take it:  dude, get your head out of your ass.  You don't think individual people can change the world?  Seriously?  Can you give me an example of ANY
THING ELSE in history that has changed the world?  I thought you of all people might be free of the brainwashing that says "it's too hard, don't try."

The current system is only perpetuated because people think like you do, that it's just too big and too entrenched and can never change.  I call BS.

You seem to misunderstand me.  I didn't say "no one can make a difference."
I said "no one can save the world"
Like you said in the next sentence, there is a range between giving nothing and giving everything.  I was responding to your implication that giving anything less than everything was immoral.  I'm not saying no one should try to make things better.  I'm saying don't stay up at night feeling guilty because - even though you have sacrificed to make things better, you maybe could have done a little more.
It sounds like you are saying that if one does any less than devote 100% of their time and resources to helping others, they are amoral.  That's just silly.

I'm saying that there's a wide spectrum of morality between giving everything and giving nothing, and that one end of that spectrum is immoral.  Not amoral, meaning lacking any moral connotations, but immoral, meaning morally reprehensible.

And most people, just by default and social norms, sit firmly up against the immoral extreme of complete disregard for the less fortunate and would be happier and better people if they could learn to share just the tiniest little fraction of their abundance.  Don't rationalize it away by saying you give your time, or you'll give some day.  Give something now.  Half a percent would be an optimistic goal for such people, though well within the market variability they otherwise accept for growing their portfolio.  Even 0.1% is a huge step better than nothing.

You can call it an excuse if you like, but at age 32, with 30k in income and 24k in savings, I am looking forward to retiring by normal retirement age, never mind early.

I honestly believe that 1) the utility of my dollars actually serves me as well as whatever percentage might trickle down to the end user were I to donate them; and 2) I will be in a much better position to give if I allow myself an accumulation phase first - so much so that the total I end up giving will likely surpass what I would have had I started now.

I really don't need to get into a "habit" of giving.  I used to, to quite a few different organizations, regularly.  I gave money to the Sierra Club, Planned Parenthood, Human Rights Campaign, Save the Children, I can't remember who else there may have been in the past, those ones stand out because they still keep sending me letters asking me to renew my "membership".

Of course this will fuel the whole idea behind this thread, but, yeah, realizing the value of planning for the future, passive income, and compound interest, made me decide to stop spending on basically anything besides food, shelter, and utilities.  When I feel I can afford it, instead of giving cash to organizations who promise to do something useful with it, I want to buy ad space, and make my own public service messages.

When you say that any amount is better than nothing - even 0.1% - and that giving time doesn't count, it makes me think it isn't really about the value one is providing to others or to the world, its just for the principal, for the sacrifice.

You really think that me giving $30 annually to some random charity is better than me working unpaid hours directly for someone in need?
Money is just a placeholder for the value created by labor!  If I give an hour of my time directly to an elderly widow, or the bicycle coalition, there is no administrative costs eating away a portion, no risk of embezzlement, no question if whether the actions the charity is taking are really the best possible way to use its resources.  I've worked for charities and nonprofits.  I've seen how they are run.  I'm not saying that most of them don't provide valuable services, but - just like took would rather not pay taxes to an inefficient government - I feel I can provide better value directly, myself, than filtered through an organization.

I don't think charity should be penance. You may as well buy an H2, and then buy carbon-offset credits to feel good again.  I think most American's have a bigger negative impact from their lifestyles than they could ever make up for by donating 10% or 20% or 40% of their income to a charity.

I think if one really wants to make a difference, the place to start is with looking at our own destruction that we do everyday.  If you feel guilty about our American privileged and inequality, about our role in environmental degradation and resource consumption, the FIRST things to do are
1) don't have children
2) eat local and (at least) 95% plant based
3) don't ever drive a car
4) don't buy (new) stuff unless you absolutely need it, and then never anything imported
5) never fly anywhere on an airplane.
I don't think its really that charitable to be the problem (i.e. all the people in the first world who aren't following those steps - in other words, basically all of us) and then try to buy your way out of guilt by donating some percentage of your income.

Like I said before, I think true generosity should be measured by how much you keep, not how much you give away.
The pauper who gives a penny is more generous than the billionaire who gives away 99% of his fortune - the (ex)billionaire still has 10 million dollars.  It wasn't a sacrifice.

Yet, obviously, the 990 million has the bigger impact on making things better.

I think you are too focused on the emotional side - generosity, as opposed to the utility side - effect.

By Bakari:
Re: your mustache might be evil
« Reply #83 on: July 31, 2012, 01:25:08 AM »
This is why I keep saying it's so important to see beyond the acts performed towards the true purpose of these acts and for people to do things for the right reason, because true charity is about selflessness. There's a reason why the phrase, "The road to Hell is paved with good intentions," exists. Doing the right thing for the wrong reason can still lead to ruin.

That quote is saying the opposite of what you are saying!  Its talking about doing the wrong thing for the right reasons.  The intention was good, but the end result was ruin.  This is exactly the risk I think you get with focusing on the motivation of the giver instead of the end result.
Everyone who's commented here ultimately falls into one of two camps: charity performed for selfish reasons and charity performed for selfless reasons, and that's where the division line lies. The selfless camp argues that charity is necessary given the very nature of the world and should be performed at least to some extent solely for the betterment of others. The selfish camp is incapable of viewing altruism as anything but a selfish act, and when confronted with contrary ideals will treat it as a personal attack on their ethics.

I'm not at all suggesting charity is or should be for selfish reasons. 
I'm saying it doesn't matter.
I can absolutely promise you that the girl drowning in the river does not care, even a little bit, if the person who jumps in to save her only did it because he wanted to get in the newspaper as a hero.  If we made the rule that saving her only "counts" if the person who does it is noble and pure of intention, she might end up drowning. 
Would it be a better world if everyone did the right thing for the right reason, if no one was selfish?  Well duh.  I never argued that.  I just don't see how it is relevant.

I have a friend who loves animals, and decided to stop eating meat.  She says she can date a guy who eats meat, but only if he feels guilty about it. 
But she has a problem with the fact that I don't think eating meat is inherently immoral - even though I am actually vegetarian! 
Which school of thought do you think the animal that isn't served for dinner would prefer?

It seems like kind of a luxury to me to focus so much on the emotional motivation of the giver rather than the effect on the receiver.  I think it makes it more about feeling good than about true compassion, which should be focused on the person in need.

By Bakari:
Re: your mustache might be evil
« Reply #84 on: July 31, 2012, 02:02:18 AM »
If the capitalist economy is exploitative, isn't it a whole hell of a lot better to participate in it to the tune of $30,000 a year than $80,000 a year?

This is Bakari's choice, and he and I have previously discussed this dichotomy.  We share many of the same values, but he fights for them by accepting the system as it is and doing his own part to minimize the damages, while I have instead opted to game the system into spiraling wealth in the hopes of enacting real change.

Perhaps this is a large part of why our feelings about this topic are so different, even though our basic underlying morality and feelings about the system are so similar.

See, I don't feel like I'm "accepting" the system. 
I feel like I am LIVING my values, everyday.  I'm trying to incorporate saving into that, but I am not making compromises to do it. 

I could make a lot more money than I do by focusing on wealthier clients and raising rates, removing all my discounts (customers with no cars and/or nonprofits are a large percentage of my clients), not rounding down my bills (today I didn't charge for my last two hours of labor, just because I felt like I had made enough for one day). 
I could stop working for the bikeshop and bike coalition, because I make $240 less for an 8-hour shift there than at my primary job.
I could start sub-contracting jobs, work on expanding the business - some people tell me I should, I would be providing jobs and opportunity.
I would certainly make a lot more money that way, probably for less work in the long run. 
But I have no interest in that.  I am anti-capitalist. 
My mother wants me to inherit her property someday.  I plan to either sell it and donate the profit, or use it to provide at-cost rent to someone deserving, because I don't believe in inheritance.

I have investments, but none are in general index funds, none are in oil or weapons or WalMart.  Its a hodgepodge of "socially responsible" index funds and bonds, alternative energy mutual funds, hand selected stocks, and hand-selected consumer loans (lending club).  All-in-all, I've lost money (mostly the alt energy mutual fund) - and I'm ok with that.  I'd rather lose money than invest in anything I feel compromises my values. 

I try to avoid buying anything from any chain store, if at all possible.  I'll shop at a franchise before a corporation, a local place with a half dozen branches before a franchise, and a place with one location where the checker is also the owner anytime that's an option.  I'll travel out of my way to get to an independent business, and I'll pay more with out a second thought.  I'll buy certain things organic or not at all.

All of these things get in the way of amassing enormous wealth with which I could hypothetically "make a difference", but I'm not willing to sacrifice my values in order to make more money so that I can then donate that money.  That would make no sense to me.

Also, I'm not just quietly living in my little trailer not using stuff. 
I'm here on this board, and at instructables, and ecomodder, and youtube, and out in the real world talking to clients and friends and people on the street, anyone who will listen, about bicycles and hypermiling and anti-consumerism and how reducing your impact will save you money (because some people will do the right thing for the right reasons, and others need a selfish reason) and trying my best to inspire as many people as I can to change their own behavior.

The one place I did donate actual cash to recently (as well as time and labor) was OWS, because it was something i really believe in, and it reached a critical mass that made it impossible to ignore.  I really don't think the little tiny battles some people do on their own have any real or significant impact.  It takes a huge number of people getting on board.  The first step is public education.  I'd like to have the resources to spread the education I provide to those around me to a wider base, but it's going to take resources to do it.  I.e. "accumulation phase".  And since I am forgoing massive income on the basis of living my values, that phase is going to be a while. 
In the meantime, I'll still be living low-impact and trying to inspire locally.

While I don't feel personally responsible to "fix" everything that is wrong in the world, I am also not content to "accept" the system. 
I feel like all those things above is me not accepting the system. 
I don't think anything I do is ever going to cause American citizens to all suddenly revert back from being "consumers" to being "citizens" or our elected officials to prioritize equity of distribution over raw GDP, but everyone of us here, participating in these discussions - and influencing not only the hundreds who comment, but the thousands who read without commenting - we are actually all helping to change the system, in a very real way.
That's something I feel good about.

By Bakari:
Re: your mustache might be evil
« Reply #105 on: July 31, 2012, 06:16:36 PM »
It is very progressive - all the way to $300k annual income.
Only problem is, someone at the lowest end of the top bracket has an amount of income closer to a homeless guy than to the truly filthy rich billionaires.   We currently have about the least progressive tax rates (in terms of how high the top bracket is, and what percentage of society pays that top rate) than we have ever had - with the predictable result of increasing inequality.

I am not sure I agree with it being the least progressive especially when other countries have higher individual income taxes many have lower corporate tax.
I said it was the least we ever had.  I was comparing to the US in the past, not to other countries.

     Income             First          Top
Year    Brackets   Bracket      Rate     Adj. Income (2011 dollars)   Comment
1913          7                1%         7%     $11.3M                  First permanent income tax
1917          21              2%      67%        $35M                   World War I financing
1925         23               1.5%    25%    $1.28M                  Post war reductions
1932         55               4%       63%    $16.4M                       Depression era
1936         31               4%       79%    $80.7M
1941         32               10%      81%    $76.3M                       World War II
1942         24               19%      88%    $2.75M                  Revenue Act of 1942
1944         24               23%      94%      $2.54M     Individual Income Tax Act of 1944
1946         24               20%      91%      $2.30M
1954         24               20%      91%      $1.67M
1964         26               16%     77%      $2.85M    Tax reduction during Vietnam war
1965         25               14%     70%      $1.42M
1981         16               14%     70%      $532k        Reagan era tax cuts
1982         14               12%     50%      $199k                      "
1987         5                 11%    38.5%   $178k                       "
1988         2                 15%    28%      $56k                         "
1991         3                 15%    31%      $135k
1993         5                 15%    39.6%   $388k
2003         6                 10%    35%      $380k                Bush era tax cuts
2011         6                 10%    35%      $379k

Its not really a matter of opinion.  We have one of the least progressive income tax schedules we have ever had.
Corporate taxes are irrelevant.  Corporate taxes are on corporations, not individuals.  It just means that the return investors get is lower, that's not the same as actually paying a tax out of one's income.
Setting that aside, the top 1% paid 37% of taxes, top 5% paid 59%,  and top 10% of earners pay 70% of the total tax pie clearly they are paying a lot. 

And those numbers seem pretty dramatic, and like they support your argument, when you take them out of context like that!

The top 1% holds 35% of all wealth.  The top 5% hold 62% of wealth.  The top 10% have 73% of all wealth.  And the roughly 50% who pay no income tax?  They have less than 1% of all wealth, with a net worth of zero or less.
Looking at it that way, our taxes aren't progressive at all, they are basically flat.  So I don't see how our current system is even remotely unfair to the rich.

Mosquito abatement and sewage are more what taxes should be paying for,
wait, so you acknowledge that government has a legitimate role to play in society, and that mandatory taxes are an appropriate way to pay for projects for the common good?  Then what are we even arguing about?

A single individual can't stop the local independent businesses from being displaced by a new WalMart coming to town with their own personal buying choices.  If they used to work in one of those shops that goes out of business, maybe now the only reasonable option left open to them is taking the WalMart job.  Business should not be allowed to just do whatever it wants, anymore than private citizens are able to do whatever they want.  If anything, less so.  We, as a society, get to decide what a business can and can't do.

...communities government representation changes zoning, makes tax accomodations, subsidizes infrastructure to get walmart and other retailers in. Tell your politicians to stop caving.

That's what I meant by "We, as a society, get to decide what a business can and can't do."  Collectively people can (via their elected representatives) decide to prevent Walmart from opening up in their town.  Which means business does not get to do whatever it wants.  That's all I was saying.

By Bakari:
Re: your mustache might be evil
« Reply #106 on: July 31, 2012, 07:29:50 PM »

I never said you were necessarily advocating giving to charity for selfish reasons, but you do still defend others willing actions to do so with the expectation that it's better than nothing. I feel the subject is relevant because no matter how much right you may do, if you do it for the wrong reasons, it's still wrong, fixes nothing, and is nothing more than legalism.
... When it becomes hollow and meaningless, the act can become perverted by evil people and you become none the wiser because it still appears to fit the shallow understanding you have of it.

I'll definitely grant that possibility, even that it happens in the real world.  Where we really differ is your assertion that the right thing for the wrong reasons "fixes nothing".  It can have an enormous positive impact on the real world!
It is a luxury to focus purely on the emotional benefit to oneself of giving, because that's being selfish.

I didn't say anything about the emotional benefit of giving.  I was contrasting the emotional aspect of the concept of giving with the practical, utilitarian aspect of the end result.   It seems like the mindset of the giver matters more to you and Sol than does the actual impact it has on the person in need.
You know logically that giving money can, does and will make a difference when done so properly. Before jumping on the FI bandwagon, your moral and ethical framework even had you doing so on top of everything else you did. Your approach to charity appears to be one of selflessness (the right reason), and you get that necessity. However, you've since introduced an "ends justify the means" argument into retreating from practicing that philosophy in all aspects of your life. "If I just stop giving money to others, I can achieve FIRE sooner, and can then be more generous with my money again later." It's a slippery slope.
It can be a slippery slope.  But it goes both ways.  The charity that jumps into community service before doing any fund raising won't be serving the community very long.  The teacher that tries to single-handedly fix the problems of every inner-city student is the one that burns out after 3 years (I know some of them).  As a utilitarian, I really believe it is better for the world if, by delaying donations now, the grand total amount of my contributions at the end of my life has been higher.
Although you're still plenty generous in other aspects and even appear to be compensating some for that financial giving loss in other areas, you've built a logical argument to defend eliminating a form of selflessness in your life.
Being a good person and trying to have a net positive impact are values of mine.  Donating money to charity is not, and never has been.

If anything, I feel like most donations are done as a form of indulgence, allowing people to sleep well at night while living wasteful destructive lifestyles.

UPDATE: from the newest forum post on the topic " Studies have found that people who do a good deed will use that as an excuse to cut back on other good behavior"
What we practice daily with enough time starts to alter our ideals. My worry is that by eliminating the full balance of charity in all aspects of your life, you'll eventually cease to value the importance of financial giving.
Exactly.  What we practice daily.  Just having an automatic monthly debit from a bank account or paycheck is not really practicing daily.  I try to live by my values in every way, at all times.  I am not personally worried about the slippery slope threat, as I have made it this far in life without compromising my values.
If we're to advocate selfless acts and charitable giving as a necessity in our pursuit of FI and daily living, then it's important to define what that really is and how it impacts us and others. Unfortunately, it cuts deep to the heart of the matter with people because it highlights the selfishness in their own lives, and people don't like being judged (even if it's merely by their own conscience). I'm not exempt from this in my own life. This discussion has added an insight into where I can improve things myself and perhaps where I even need to back off a bit from being too generous in some other aspects of my life. Instead of perhaps recognizing this, many people would rather instead argue and defend their selfish choices without admitting that they're being selfish and that perhaps what generosity they are providing in life might be for terrible reasons that could result in a terrible outcome because they don't completely understand the purpose.

I totally agree.  I don't know if I came across defensive; it wasn't my intention.
I still am just failing to see why money specifically gets its own special category that is supposed to be qualitatively different than anything else.
By that reasoning, a monk who takes a vow of poverty, lives in a room with a bed, table, chair, and nothing else, and spends every waking other helping those in need, is in some way immoral or not doing enough, because they aren't giving money.

Money is just a placeholder for goods and services.  They are interchangeable - literally.  If I work for a nonprofit residential facility for severely handicapped youth for 5 hours (at already below market rates) and then only charge them for 3 hours, how is that different from if I just gave them a check for a hundred dollars?
I don't see the difference.
Then extend that same reasoning to volunteering.
Giving money isn't a different form or aspect of charity, its just donating time via your workplace, and adding in an extra step.

That said, I will say this:  this thread and yours on charity have inspired me to actually do something I have been putting off for a couple months for "when I had time" (which would have been in the fall), which is to sign up for a volunteer shift for The Green Branch, reading to children at a local farmer's market.  All the clients who need a weekend spot will just have to wait.

Incidentally, to all those who find giving money is an important part of your life, here is one more option for where to give: http://www.greenbranchlibrary.org/
(Disclaimer - I was formerly on the board of directors)

By Bakari:
Re: your mustache might be evil
« Reply #107 on: July 31, 2012, 08:14:37 PM »
No.  I meant what I said: I think there is no way to sustain the current population indefinitely at ANY standard of living.  The issue is ongoing food supply.

Now I admit that I can't point to any "Do The Numbers" analysis that proves this, but neither do I know of any that disproves it, or has a sound methodology for finding a sustainable number.  But there is a lot of suggestive evidence.  Consider for instance the urbanization of the third world, and the fact that feeding much of this urban population depends on unsustainable agricultural practices.  Ergo, if we lose first-world, unrenewable resource-dependent farming methods, most of the urban population will starve.

We can also look at history, and what low-tech farming methods did to the environment of the
Middle East and North Africa.  Civilizations grew in Mesopotamia, then collapsed when farming & grazing turned formerly fertile land into arid wasteland.  The same happened in North Africa, first as Rome used it as the grainery for Italy; later as grazing by nomadic herdsmen and their flocks turned grasslands into desert.  We can even see that the same thing happened in the America West: areas that were once grassland are now sagebrush desert. 

Put all this together, plus many other things - e.g. the rate of ocean fishery depletion - and it seems pretty obvious that current populations aren't sustainable.

Hmm.  Now that is a very interesting proposition, and one I don't think I've heard before.
I'd say it is certainly obvious that the Earth could not sustain the entire world at 1st world standard of living.
It is even more obvious that, even at a 3rd world level of subsistence, it would not be sustainable given infinite population growth.
Since we currently are on a trajectory towards both of those things at once, we have a problem.  Somethings got to give.

But if, hypothetically, we halted all population growth and all economic development, even turned back first world development (de-develop?)
Given the external inputs to modern ag, you could be on to something.

On the other hand, I suggest for your consideration:

-meat consumption provides roughly 1/10th the amount of final food calories per unit of land then plant consumption.  If the first world cut back its consumption to the level of most of the 3rd world, this would free up an enormous amount of food for the world.

-our high external input ag practices are done because supply and energy are cheap, and they require less labor.  Less resource intensive techniques exist.  They require more labor.  For most of history most labor was in ag, and there is no inherent reason it couldn't return if need be.

-modern permaculture also addresses the destructiveness of third-world "low-tech" practices that destroy soil

-if all else fails, people are working on hydroponic based skyscraper industrial vertical "farms" that could (hypothetically) provide more calories from less input or waste than anything that exists today.

You could still be right, but I'm not convinced that it is "obvious" that you are.
Afterall - despite the failures you mention in ancient history, humans ended up surviving.  Just like the people who think the apocalypse is coming on such-and-such a date, why should this time be any different than all those other times the world didn't end?

By Bakari:
Re: your mustache might be evil
« Reply #112 on: August 01, 2012, 10:45:33 AM »

we are right smack where we are. dreaming about what if we weren't has no useful purpose, in my opinion. even if we could come to a consensus about what we'd rather see, there's absolutely no way of enacting it.
It servers the purpose of solidifying what actions we need to take to at least move in that direction.
For example, on the surface it may feel like the most charitable thing to do is provide food for the hungry in a land that can't produce enough food for itself, but thinking about a point like James made might indicate you will do more good in the long run by providing family planning methods and education.  Providing food may actually help increase the population even farther past what the local land is capable of providing for.
* we are NOT heading toward unlimited population growth. in the first world, birth rates are barely at the replacement rate -- look at all of france's pro-natal policies. why would they put those in place if their population was growing exponentially? it's not.

France is not the entire 1st world.
In the US - the country with the highest per capita resource use in the world, the (native) population is increasing by 1.6 million a year (that's not considering immigration).
The very nature of population growth means that ANY net positive population growth is exponential.  That is a mathematical fact.  Given that the average American uses roughly 20 times the resources than a person in the third world, our population growth is equivalent to roughly 32 million 3rd world people a year.

And those numbers seem pretty dramatic, and like they support your argument, when you take them out of context like that!

The top 1% holds 35% of all wealth.  The top 5% hold 62% of wealth.  The top 10% have 73% of all wealth.  And the roughly 50% who pay no income tax?  They have less than 1% of all wealth, with a net worth of zero or less.
Looking at it that way, our taxes aren't progressive at all, they are basically flat.  So I don't see how our current system is even remotely unfair to the rich.

If you want argue about closing loopholes and limiting unncessarty subsidies and imposing regulations/taxes the foreign bullshit - ok even though it would likely have unintended consequences but as it relates to income taxes they are already way too progressive.  I hate the idea of attacking people because they have money.
(emphasis mine)

So you are claiming that.  OK, so did you actually look at the numbers I posted?  And compare them to your numbers?  Did you not notice anything about them?  Forget about the percent of the population each group represents.
The people who have 35% of all wealth pay 37% of taxes
The people who have 62% of all wealth pay 59% of taxes
The people who have 73% of all wealth pay 70% of taxes.
The people who have 0% of  all wealth pay 0% of taxes.
That is not a progressive system!  That is pretty much flat.
It doesn't even take into account Sol's point about the diminishing marginal utility of additional wealth.
but wait!
Remember I pointed out that the the top bracket only covers the top 1%?
The top 0.1% has roughly 23% of all wealth - but they only pay 17% of taxes, and it gets more recessive after that.
The top 0.0001% collectively holds 1-2% of the nations wealth, but only pays 0.001% of income taxes (including capital gains taxes, dividends, etc)

By Bakari:

Re: your mustache might be evil
« Reply #122 on: August 02, 2012, 10:15:56 PM »
So you are claiming that.  OK, so did you actually look at the numbers I posted?  And compare them to your numbers?  Did you not notice anything about them?  Forget about the percent of the population each group represents.
The people who have 35% of all wealth pay 37% of taxes

The top 0.1% has roughly 23% of all wealth - but they only pay 17% of taxes, and it gets more recessive after that.
The top 0.0001% collectively holds 1-2% of the nations wealth, but only pays 0.001% of income taxes (including capital gains taxes, dividends, etc)

Just because the amount of taxes a group pays is a similar percentage as the amount of wealth they control doesn't make them correlated.
I have no idea what you are trying to get at.  I never said they were correlated. 
You claimed that federal income taxes are "way too progressive".
I am showing you the actual numbers.  If you consider the amounts of wealth that each group of tax payers has, our taxation system IS NOT progressive.  It is flat for incomes between $0 and $300,000 and it is extremely REgressive after that point.  This isn't a value judgement.  This is numbers. 
You were the one who brought up the issue of what percent of total tax is paid by the wealthy.
I'm pointing out it is proportionate to how much they have.
Also, wealth is not income and income is not wealth

Right.  Which is the reason why a nominally progressive structure ends up being flat - income tax is based on income, even though how wealthy a person is depends on... well... how much wealthy they have.  A person with a billion dollars has no need to have a 9-5 job.  They may have no income, but they are still using just as much common infrastructure.
Furthermore, much of the taxable income from the wealthy is in the form of capital gains and dividends, which have lower tax rates
yep, thats the other reason the super wealthy actually pay lower overall tax rates than the merely well-off.  As you say, 100-200k a year isn't necessarily rich.  That could include doctors and lawyers and engineers who actually have jobs and contribute directly to society.  A billionaire doesn't need to have a 9-5, and for some reason our politicians have decided that passive income deserves to be taxed less than earned income.
- xyz Billionaire owns 10,000,000 shares of home depot and therefore would get $11,600,000 a year in dividends at 15% tax rate.  Why is this wrong.  Can he not lose his investment like you or I.  Nevermind that home depot paid income tax equal to 37% so combined that is 52% tax rate.
wow, seriously?  There is so much wrong with your math!
First of all, you are making a rather baseless assumption that if the corporation didn't have to pay taxes they would pass 100% of the tax savings on to higher dividends, rather than say, lower prices, or higher salaries, or internal improvements. 
Secondly, the percentages don't add!  A dividend is just a fraction of the actual share price, which may or may not accurately reflect the actual finances of the underlying company (since the status of the overall market as well as investors opinion of the company effects stock price).  The elimination of corporate tax would increase the cash the company had, which might increase the share price, which in turn could increase the dividend those shares paid - but it wouldn't increase it by 37%.
MMM worked hard, saved and invested, took risks (lost some/won some) and put his family in a position that he doesn't have to work - therefore he is wealthy (definitely a relative term) but yet he pays little taxes (even wrote an article on it) so I suppose your position is that he should be taxed far more aggressively and anyone else like him should be as well.
At the very least I'm saying he shouldn't be taxed less
Again, my whole point was in responding to your claim that our tax system is "too progressive"
I definitely think 300k shouldn't be the top bracket.  I don't think there should be any top bracket.  If it were up to me, it would be a formula which uses a mathematical limit, where it would only reach 100% at infinity dollars.
The marginal utility argument is BS, yes the concept is true that there are diminishing returns,
Well, here is where we can simply agree to disagree.  You are clearly an individualist.  I believe that sometimes the overall good of everyone outweighs personal freedom.  But that is a moral / philosophical debate without a "right" answer, and I'm just posting this to point out what is, not debate what should be.
but that doesn't mean that one's money should be taken away simply because they have more than YOU.
Just because YOU think that selfishness is the only motivation anyone has for anything doesn't mean everyone else sees the world the same way.  How does how much I have or not have have anything to do with anything?
How do you reframe that rationalization when its Warren Buffet pointing out that taxes on the super rich are regressive?

  People start companies, make investments (i.e. take risks) and they should be rewarded for it and when they achieve it they shouldn't be penalized for it.
Again, that is you injecting your personal value system into it.  Taxes aren't a penalty.  They are a way for a complex advanced society to provide for common goods that the market will not.  You have already acknowledged that role.

Perhaps you would only be happy with a tax system where everyone paid the exact same amount in dollars, regardless of income level or total wealth?

By Bakari:

Re: your mustache might be evil
« Reply #123 on: August 03, 2012, 07:53:41 AM »
By that reasoning, a monk who takes a vow of poverty, lives in a room with a bed, table, chair, and nothing else, and spends every waking other helping those in need, is in some way immoral or not doing enough, because they aren't giving money.
I also think that lots of people say "I give time instead of money" as an excuse to not give money, because they are greedy bastards.  They basically value money more than their time, so they give what they think is cheap.

I think you have to be pretty smug to assert that people who perform charitable acts that you do not are doing it out of selfishness.  That's ballsy.  How dare they attempt to do good?

[NOTE: Almost a word-for-word quote of Sol, from a couple threads back, in response to someone (probably me) saying that donating money could be an excuse for avoiding real positive change or action]


I wasn't saying that everyone who donates is using it as an excuse to not do anything else, I was saying that some people do.  Like you said "Money is just the easiest hurdle for most people to tackle".  That doesn't mean it isn't a positive thing.  I'm just asking you to acknowledge those people who choose to go further than the easiest step, regardless of whether they skip that first step or not.

In other words:
I think there are a lot of different opinions here about what charity entails and each person's plan of action is going to be different.  While sometimes forcefully verbalizing my own views, I wouldn't presume to tell other people how to act on their own value systems. 
I was responding to what I felt was some people here presuming to tell other people how to act on their own value systems.

now, if sacrifice-based environmentalism could work, then i'd be all for it. but the thing is -- no one is buying it.

Bakari is buying it.  He seems to be saying that earning and spending 20k/year and giving away nothing is morally superior to earning 100k and giving half away and spending half, because you have "taken" more regardless of how much you've given.  This seems in direct conflict with his earlier statements that the ends justify the means and a person making the right moves for the wrong reasons is still doing good. 

Care to clarify for me, B?

I don't see the conflict.  In order to simplify, lets pretend the world has 100k in total resources (remember, money is a placeholder for tangible goods and services needed or desired by humans - and although it grows with technology, at any given moment there is a finite amount)
If you take and spend 20k, that leaves 80 k for everyone else.
If you take 100 and give half back, that leaves 50k for everyone else.
The ends is you have more resources at the expense of everyone else.
You did the wrong thing, even if it was for the right reason (earning more specifically so you could give more)

I'll elaborate more in my numberline post.

By Bakari:
Re: your mustache might be evil
« Reply #124 on: August 03, 2012, 08:10:30 AM »
Poverty is not in itself proof of morality.

It most certainly isn't!

In fact, there are plenty of poor people who use their poverty as an excuse to rationalize immoral things like violence and theft and environmental degradation.

My primary reason for mentioning my own background is that I often feel I have a totally different outlook on money than many of the people here, which may be one part of why I end up so often disagreeing with people when we seem to share similar basic principals and goals.
I should probably confess that although my lifestyle is frugal, my end goals do include being mega-wealthy, like dynasty-building disgustingly filthy rich kind of wealthy.  I think it's a necessary prerequisite to enacting real change.

In that context the initial idea behind the OP of "mustache may be evil" makes sense: putting off doing good in order to do good may be counter-productive.

But I don't see wealth as a means of change.

Consider the people known for enacting real change: Dr. Martin Luther King Jr., Malcolm X, Susan B. Anthony, Harriet Tubman, Fredrick Douglas, Mahatma Gandhi, Cesar Chavez, Siddhartha Gautama (known colloquially as " Buddha"), Jesus of Nazareth...
None of these people needed wealth to make a tangible positive impact on the world.
Now compare them to some of the people who are known as "philanthropists" - people who give lots of cash to charity by virtue of the fact that they have enormous wealth (but who never give so much away that they themselves are no longer wealthy) - what real, lasting, positive impacts can you point to any of them having on the world?

Another reason for my mentioning poverty is various opinions expressed in this and other threads to the effect of "anyone who is poor in America is that way because of bad spending choices" or possibly "poor educational decisions" or in one way or another, entirely their own fault; therefore it does not reflect any inherent injustice in our system.

I know from personal experience that this is not true.  We didn't have cable TV growing up, or cars, or new clothes, or new anything.  We didn't have a microwave, or one of those fancy TVs with a remote control (ours had a knob; we got it for free).
My father had a Master's degree (and not in something stupid like art history) but he found it hard to get work being one of the only Black men in an industry where a (99% white male) union got to make unilateral decisions of who got which job
(he works on international container ships and is just below the ship's captain in rank - and a lot of people were uncomfortable with the idea of a Black man in a command position, with an entire ship full of white guys who had to do what he told them).
Therefore, in between jobs, he was always doing different odd-jobs, starting little businesses - and then he would finally get a spot on a ship, and the side business would die with him away for half a year.
After my parents divorce my mother went back to school - which meant that welfare cut the portion of payments that was supposed to cover her living expenses, because they mandated that she spend at least 40 hours a week looking for a job - any job - rather than "waste" time getting educated.  So we just got by on even less, and she eventually got her master's degree and went to work for social services.
The family was able to eventually get out of poverty - but only because the safety net was available.  Even the reduced benefits were enough to allow my mother to finish college, as opposed to just finding a minimum wage job so everyone could eat, which would have kept us at that same level for ever.

By Bakari:

Re: your mustache might be evil
« Reply #125 on: August 03, 2012, 08:13:59 AM »
While I'm on the topic;
I don't feel I or anyone else should have to be taxed to support people who don't want support themselves.  I don't want to be accountable for adults who don't want to be accountable.  Is that wrong, does that make me a bad person, or even an EVIL one? I think not.

Difficult things happen and there so many ways and circumstances that cause people to become homeless and this is not a judgement on that.  There should be temporary services/safety nets available to help these people when times get bad, and there are such services and resources but many seem to become permanent in nature and are available without question in perpetuity.

Do you actually know anyone who has been on unemployment, or have any idea how it works?
Someone who never works is not able to get unemployment.  Someone who quits, or is fired, is not eligible.  How much you get is directly proportional to how much you put in - both in terms of your salary (and therefor how much you paid in each month) and in terms of how long you were working.  If someone does get laid off through no fault of their own, and has been paying into the system long enough, then they get a check every month IF AND ONLY IF they can prove that they are actively searching for a new job.  Have you ever seen the episode of Seinfeld were George wants Jerry to pretend to be Vandalay Industries in case the unemployment office calls?  You have to give them a list of places you have applied, every month, and they may randomly check up on your list at any time.  If you are determined to not be seriously looking for work, you not only get cut off, but you may have to pay back what you got.  Even if you are actively looking for work, if you don't have enough years of working behind you, you will get cut off anyway.  And then come next April, all those checks count as income, and you have to pay taxes on it. (And incidentally, no, I have never used it myself)

As far as welfare goes, even before the "welfare reform" under Clinton, the average welfare recipient was on it less than 2 years, and then got off and never used it again.  Now (thanks to the public perception that welfare users are taking advantage of tax payers and therefor the system needed "reform") it's everyone, because 2 years is the cap.  And, as I mentioned above, just like with unemployment, you have to show that you are actively looking for work and going to school in order to have a chance at getting out of poverty and contributing something meaningful to society doesn't count.

The supposed abuses of the system which taxpayers have to cover really just don't happen.
Of course you can dig up dramatic examples here and there, but they are rare enough to be negligible.  Conservative talk show hosts, and occasionally politicians, love to stir up indignation about how your tax dollars are going to support all these deadbeats.  The reality is that the grand total federal budget for welfare is all of $168 billion.  Sounds like a lot, but that's out of a $3.8 trillion budget - in other words, about 3%.
(Note that the official budget numbers combine lots of things together under the heading "welfare" - including worker / employer funded things like UI and worker's comp).

We could eliminate all welfare, and it would make a difference of about 3%.  If 1 in 100 abuse the system, then ferreting out those few people might save 0.03% - or it might cost more than it saves.  Its simply a non-issue.

Now if you really want to eliminate government waste, you need to start by looking at where the money is going.  Health care is a huge one, and of course almost all independent analysis finds that those costs would drop if we had nationalized health care.  Not counting health care, military spending is higher than every other category combined. In fact, our military budget is higher than every single other nation in the entire world combined. Of that, more goes to buying technologically advanced vehicles and weapons - in other worlds goes ultimately into the pockets of the CEOs and investors of defense contractors - than goes to paying personnel salary; in order to fight an advanced enemy equally as imaginary as all the people supposedly taking advantage of welfare and unemployment. 

By Bakari:
Re: your mustache might be evil
« Reply #126 on: August 03, 2012, 08:24:49 AM »
Getting back to the original topic...

Where was I?
Oh, right, poverty.

Being poor doesn't automatically make you a good person.
But it does make it much more likely that they have a smaller "footprint".
Our ecological footprint isn't just an issue because of all the poor animals.  We humans, no matter how sanitized and orderly the cities we live in are, no matter what technology we come up with, are still biological creatures.
I would gladly see the entire planet go up in flames if it ensured the continued survival of the human race.

That makes no sense.  We are dependent on other life forms.  We can't make food out of rocks and air.  We don't even have a way to support a couple of people for a couple of years outside the ecosphere without constructing an entire artificial ecosystem (i.e. mission to mars).
So obviously our footprint, our use of resources on a finite planet has EVERYTHING to do with our impact on the rest of humanity.
Bakari ... seems to be saying that earning and spending 20k/year and giving away nothing is morally superior to earning 100k and giving half away and spending half, because you have "taken" more regardless of how much you've given.

I see this entire issue as a sort of a karmic numberline.

0, in the middle, would be if a person had exactly no impact on the word around them, positive or negative (or if there positive and negative exactly canceled out).
The more you use, the more destruction you do (directly or indirectly), the more your pointer slides down the number line into the negative.  The more good you do, in whatever form, the more it heads towards positive.
Each of us starts out only taking, but until we get into at least our teens, we don't really have a choice, so maybe we can decide to reset it to zero from the time our choices are our own.
Most of us moves rapidly into karmic debt right off the bat, by virtue of the lifestyles we all take for granted.  We have a long way to go just to reach neutral.  But the less resources one has, the slower they move down.  It isn't because they are a "better" person, but the negative impact they have on the world is smaller.  Which is why we expect ourselves in the first world to donate to hungry people in other countries, but we don't expect the people of Somalia to donate 10% of their income to feed the homeless in the US.

This numberline analogy may make my point from my last long post clearer.  The goal for each of us moral citizens should be to have as positive a number as possible.
Mathematically, whether you are adding a positive, or taking away a negative, the result is the same.
If you have a gigantic optional negative, and a tiny optional positive, you will have the greatest net effect by subtracting the negative.

Now, emotionally it feels more proactive, more tangible, more satisfying, to add a positive, even if its a tiny one.  That's what I see:
Give something now.  Half a percent would be an optimistic goal for such people, though well within the market variability they otherwise accept for growing their portfolio.  Even 0.1% is a huge step better than nothing.
as being - adding a tiny positive.
Don't rationalize it away by saying you give your time,

But if the point is to make the world a better place, then the focus needs to be on what is most effective, not what feels better to the giver.
This is why I pointed out those particular 5 things that have the biggest negative impact.  I don't think anyone is going to give away 100% of their money and devote 100 hours a week to helping others.  Which means that everyone draws a line somewhere, between what they are willing to give and what they reserve for their own life.
I'm saying to prioritize whatever will have the biggest effect on your personal karmic numberline - and that for most of us that is eliminating our giant negatives.

That isn't to say don't donate, I'm not discouraging volunteering, or arguing against any other form of charity.  I'm saying that if the goal is to make the world a better place, or make life better for humanity, or whatever you want to call it, focus on where you can make the biggest difference first, and then add in whatever bonus things appeal to you.

By Bakari:
Re: your mustache might be evil
« Reply #127 on: August 03, 2012, 08:29:39 AM »
And to be clear:

I'm in no way perfect and would never claim to be.

Of my own list:
1) Don't have kids;
I don't have any - although its possible I might by now, had I chosen my first wife more carefully (or if Roe v Wade had turned out differently!) and I'm still not 100% sure if I ever will.  I feel very conflicted about it.  I have always wanted to, and on the one hand if I only have one then between me and my partner, we are personally at less than replacement rate.  On the other hand, lots of other people have more than one, and its the overall average that counts.  On the other hand, it shouldn't be my personal responsibility to sacrifice extra because so many other people aren't doing their part.  On the other hand, its thinking like that which keeps people from enacting positive change.  At this point in my life, its a moot point anyway.

2) Don't eat meat (unless you personally killed it);
I'm vegetarian, but the main reason is because I have been my entire life, and the thought of eating flesh is about as appealing as the thought of eating cockroaches or kittens is to most Americans.  I only buy eggs from cage-free farms, but I don't always get organic dairy products (cheese, yogurt, and ice cream).  I need to start.  I have known this for a while.

3) Don't drive a car;
My truck runs on 100% biodiesel made from recycled vegetable oil.  This is better than running on petrol.  But it would not be sustainable if scaled up to US consumption levels, so I don't consider it benign.  However, I only drive the truck for work, and it is displacing jobs that would have been done with a petrol powered vehicle, so maybe it counts, I don't know.  But I also have a motorcycle.  It gets ~70mpg, and I rarely drive it - but rarely is a lot more than never.  Nor can I claim that I never drive it when there is a viable alternative.

4) Don't fly on planes;
I have been good about this since I learned just how dramatic the impact of air travel is - a single round-trip international flight can contribute as much to climate change as an entire year of an average commute in an average sedan.  In other words, the move up the karmic numberline caused by riding a bike to work everyday is completely canceled out if you fly several places a year for travel and vacation and family visits.  I have been on planes since learning this, but only for Coast Guard duty, which isn't voluntary.

5) Spend less on new items than you donate each year;
Well, obviously I don't quite make that one, since I donate only slightly above $0 with any regularity.  I came up with that idea as a result of this thread.  I like it.  I just might do it.  My spending on new things is low enough that it will probably be affordable.

And finally: In answer to this question
Was anyone actually made a change in their life after reading these threads over the past week or so?

1) I signed up for a volunteer shift with Green Branch
2) I realized that - now that I have a bike trailer - I can get food from the independent natural grocery several miles away, instead of the supermarket which is walking distance from home.  It only occurred to me because this thread made me question what I could be doing better in my own life.
3) see 5, above.

By Bakari:
Re: your mustache might be evil
« Reply #140 on: August 03, 2012, 05:13:00 PM »
OK, so obviously we disagree on a fundamental level about the proper balance between individualism and collectivism - but at least we can both see that we both find some value in both.

But I'm thinking part of this back and forth may actually be a semantic issue.
If a billionaire and a non-billionaire drive down a highway for 60 miles, are they not using the common infrastructure in the same amount so why should the billionaire pay more.

I disagree with the fact that people should have to pay more because they have more.

Let me see if I understand you correctly...

You are not actually arguing for a flat tax rate - as in, one where people at every level of income pay the same percentage of their income.  You are arguing for a flat tax amount, where everyone pays the same total dollar amount, and income is totally irrelevant.

Our current system is nominally progressive - the wealthy are not just supposed to pay a greater total amount, they are supposed to pay a higher percentage.  Most libertarians and conservative capitalists argue that the rich shouldn't have to pay a higher percentage.  They still acknowledge that they should have to pay a higher total amount.

Lets look at some real numbers:
Lets say libertarians got their way and we completely eliminated healthcare and welfare (all forms) as well as cut back the military budget to a level competitive with China.  That frees up 2 trillion dollars, leaving a budget of 1.8 trillion.
Divided by 196 million Americans between the ages of 18 and 65 means a tax bill of roughly $9000 each.

Correct me if I am mistaken, but it seems like you are saying that:
a person who makes $14,500 per year (minimum wage) should pay $9000 in taxes (leaving him $5,500 to live on) and
a person who makes $300,000,000 (average income of the Forbes 400) should also pay $9000 in taxes (leaving her $299,991,000 to live on - not counting the 1-60 billion she already has)

If it were up to me, it would be a formula which uses a mathematical limit, where it would only reach 100% at infinity dollars.

That would be good for capital investment

How would additional tax brackets that included a million, ten million, 100 million, and 1 billion in anyway affect capital investment?
Are you suggesting that only billionaires invest?
That seems a silly implication, esp. given the forum we are on right now?
Are you suggesting that no one would invest if they didn't think they could one day reach infinity dollars?
You must realize that even if there were no taxes at all, no one is ever going to have infinity dollars, right?

By Bakari:
Re: your mustache might be evil
« Reply #149 on: August 06, 2012, 11:04:03 AM »
I wasn't suggesting that only billionairs invest, but if they or anyone esle believes that the tax man will take all of my gain then they simply won't make the investment.
That is not how progressive tax structures work. It is not a bad idea to make more money unless a marginal tax bracket has a rate of more than 100%. This is basic math. If you are a billionaire, you understand basic math; therefore, if you are a billionaire, you do not believe that all the gain will be taken by the 'tax man'.

I remember overhearing more than one person saying something along the lines of "there is no point to playing the lottery - because even if you win, the government will just take half of it anyway."
Ignoring for the moment the statistical unlikelihood of winning...
This would be that "bad at math" type of thinking
So, if you win a million dollars, you "only" get to keep $500,000 - and this is not better than not getting $500,000?
Might explain why the people who say things like this are always poor people...

If the marginal tax rate on income over 10 million dollars is 90%, that means an investor still gets another million dollars a year.  If generating income of an additional million dollars in a year isn't motivation, what is?

By Bakari:
Re: your mustache might be evil
« Reply #151 on: August 06, 2012, 11:49:42 AM »
Half of the population only holds 2.5% of the wealth

You guys keep bringing wealth and tax rates into the equation, I have never once said that wealth wasn't concentrated at the top and in fact I even think I said that the gap is too disproportionate.

How do you think it got that way?
How do you suppose society could change it?
Clearly you view that tax rates are far too low on anyone who is successful

Nope.  I don't equate extreme wealth with "success". 
1/2 of the 20 richest people inherited their wealth.  "Luck" is very different from "success". 
Taxes on inheritance have dropped substantially - 77% top bracket and 60k deduction in 1977 down to 45% and 3.5 million deduction in 2009 (and NONE what-so-ever 2010!)
and that is the only reason why they become wealthy.

But it is one factor in how a handful of people in the past couple decades have become enormously ridiculously wealthy.

In addition to a top income tax bracket of only 35% (down from over 90% in the 40s and 50s - you know, that period of time in America known for high unemployment, stagnant growth, economic uncertainty, and general pessimism...) there is also the inheritance tax I mentioned a moment ago.

Other factors include changes in US law which encouraged corporate consolidation and outsourcing.  Also, increases in technology, which increase productivity, which in our system benefits the owners of companies at the expense of the employees.  And even some good old fashion hard work and innovation thrown in as well.

MMM is not enormously ridiculously wealthy.

I'm going to guess you aren't really aware of just how extreme wealth inequality really is. MMM has a closer amount of wealth to that homeless guy you passed by yesterday than he does to anyone on the Forbes 400 list.

You can be forgiven for not really comprehending the vast scale of inequality though - most people don't:

Note that this graphic is fairly misleading - the smallest it shows is 1% of the population, but within that group, if you subdivide it even further to .1% or .01%, that set of subgroups is just about as unequal as the 1% is to everyone else.

See that pink square about 4 squares down from the top on the right? There is more or less your successful Mustachain, or other 1%er. See how much closer it is to the rest of the 99% than it is to the top square? When I talk about taxing the wealthy, I'm talking about that top square, maybe the top two, not everyone above 50%.

But you don't have to take my word for it (or these people's either - most provide references, so you can check if you think they are just making up numbers):





should be paying a lot more than he does and has demonstrated that it is possible to live well and actually even save/invest some at that low income,
yup.  The fact that the middle class wastes its money a) has no bearing on this discussion and b) doesn't mean that other people aren't actually poor enough that they have no left over money to save.
So the question is for the lower 50% why aren't they saving more, investing more.
Basically you are saying I want to penalize the poor and you are saying you want to continue to reward them for being anti-MMM.
"Again, that is you injecting your personal value system into it.  Taxes aren't a penalty.  They are a way for a complex advanced society to provide for common goods that the market will not."
Taxes aren't a penalty.  Not paying taxes isn't a reward.
Being poor doesn't mean you are anti-MMM.

By Bakari:
Re: your mustache might be evil
« Reply #170 on: August 07, 2012, 03:16:32 PM »
What difference does that make for the question of whether or not taxes should be more or less progressive?

It doesn't, except insofar as it's forcing an incorrect view of reality.  But what does the question of progressive taxation have to do with evil-or-not mustaches?

Congress is debating this exact question right now.
If one is voting for whoever will lower their own taxes the most, they may choose differently than if they are considering what is best for society.

For example; I have a friend who is a day trader.  She was talking about the pending raise in tax rates for capital gains and dividends, and I said "I know, I'm really glad about that!  Money that you had to actually work for and which contributed something tangible to society shouldn't be taxed more than money you make just by virtue of already having money.  Taxes need to get paid for society to function."
And then she was quiet for a little bit as she thought about it, and she said "Thank you.  I like that perspective.  I was just thinking about it from the point of view of how much taxes I pay.  I feel better about it when you say it that way."

A central part of FI is passive income.  If we are trying to be responsible citizens, do we try to lower our own tax bill, even if it is at the expense of society as a whole?

By Bakari:

Re: your mustache might be evil
« Reply #171 on: August 07, 2012, 03:36:29 PM »

You and I are going to have to agree to disagree.  Just because a system is progressive doesn't make it fair.  I have asked several times directly and through example but once please explain to me the absolute sense why somebody who makes more should pay more beyond that "it is good for society" or "if the tax man don't taketh they won't giveth away" or "because they inherited it" or "because they benefit more because Obama built all the roads that they use".

Simply answer the question why is it fair.  I suspect I can't get answer because it is not fair.   That doesn't mean it should change or that the societal arguments don't come into play or fact of the matter that so what the system isn't fair, but life isn't always fair.

You are focusing on the social/political view of this whereas I am focusing on the principled/absolute view of this.

First, my principals dictate a focus on the social view.  I.e. I believe what is most important is that which brings the greatest happiness to the greatest number of people.  I think any principal which causes some people to suffer so that one person can gain a negligible amount of marginal utility is an invalid principal.  Hence my examples of why propety rights should not be a fundamental / universal value. 

There is more than one way to define "fair".
If a group of people has a limited food supply, you could say it is most fair if everyone gets an exactly equal portion.
However, if one person is a 98lb female, and another is a 200lb male who, by virtue of his strength, is tasked with doing the heavy lifting for the group, an equal division of the food may result in some having more than they need and others having not enough.

Just like I think in determining generosity, considering how much a person has left over is more relevant than how much they give away, so to with taxes, how much a person has post-tax needs to be taken into consideration to figure out what is "fair"

You really want to make everything fair and say that all wealth is built on merit, we could start by making preschool, kindergarten, mandatory and free, making at least the first 4 years of college free, and taxing all inheritance, trusts, and "gifts"(beyond sentimental value)
Since that isn't the world we live in, fair becomes relative

By Bakari:
Re: your mustache might be evil
« Reply #179 on: August 08, 2012, 08:11:18 AM »
You have an RV, right?  Well I don't and need to travel....I will be by to pick it up later next week.  After all you have something I don't so it is FAIR that I can take it. 

I asked you to leave the social stuff out of the answer and again you couldn't, and as I remind you I didn't say the system needed to fair just that it wasn't fair.  My comment above is ridiculous, and as ridiculous as it is it is, in the absolute sense, no different than take it from the wealth argument that you make.

Leave out the social stuff?  If you were considering one single person on an otherwise deserted island, than the concept of "fairness" wouldn't even apply.  "Fair", by its very nature, implies a relation between 2 or more people, which makes it a social concept.  How do you leave the "social stuff" out of it?

Even my 2 year old nephew who I used to take care of recognized the difference between one person taking something from you, and a third party mediating what is fair. 
More specifically, if we were playing a game, and his mom said "ok, now its my turn" he would refuse to give up his turn, because she wanted to take it for herself.  But if I - a neutral third party - said "ok, now its her turn" he would accept it.  Same thing if her and my roles were reversed.
So there is one difference between your analogy and mine.

There is also the utility I pointed out with my food example.  I'll try a different one, since you didn't seem to get it.
Lets say one person purchases the entire supply of medical insulin in the world, and then refuses to sell it at any price.  This would be legal, and within their property rights, but is it "fair" to all of the diabetics of the world?  In your "absolute" framework, would it be immoral for the government to order them to give up the insulin?

How about if one person stole something, didn't get caught, and then passed it down to their child.  Should it be taken from the child and returned to the original owner?  Why punish the child, they didn't do anything wrong?  Which is more fair in this case?

The problem with what you are calling absolute principals is that it requires a very simple world.
If the supposed principal requires doing things that violates other principals or makes for a less than ideal system, you have to rethink that principal - maybe it is the principal itself which is invalid

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