True, but it's easier to save when your needs are met by a tinier portion of income.
Sure. And yet, Americans don't do they? Middle class people have plenty of disposable income. Yet they squander it in ways that, to me anyway, are shocking.
That said, consumption also is a bigger driver of economic growth than investment.
Sorry, but that's insane. You're hanging out with the Qt3 loons too much. That belief is empirically incorrect. For thousands of years, humans didn't have the option of investment. It was pure consumption. It was the birth of capitalism (which is where the *option* to invest on a mass scale came from) that has generated the amazing changes in living standards over the past 200 years.
because consumption turns the money through more hands before it ends up being invested
No it doesn't. You think that when you put money into a CD that it just sits there in a bank? There are lots and lots of transactions in investments. It's simply a different mechanism.
If more people invested rather than mindlessly consumed (less money for cheese burgers, more capital available to fund new things) we'd probably have our flying cars now.
(the money multiplier impact from economics)- this is one of the core values of my own personal economic beliefs- income inequality hurts consumption (and this is a big cause of why we almost had a great depression in 2008 and why the economy's been in such a huge mess- folks tried to keep up despite declining real incomes and in 2008 they just couldn't anymore).
There's no evidence to back up your beliefs though. Inequality doesn't really affect anything other than offend statisticians. It's not as if Americans are living in abject poverty.
My biggest beef is that humans always seem to be looking for someone to blame for their problems rather than taking responsibilities for their actions.
The higher ones income, the LESS excuse they have to complain about "rich people". I have known so many people who, in their 20s were making good money that they instantly spent on...well crap (dinners out, electronic toys, cars, etc.) that if they had simply put a fraction of that into an investment they'd be incredibly well off now.
Nearly every 20-something year old male or female I know could be considerably well off by the time they were 40 by simply taking the money they spend monthly on eating out and investing it. I quite occasionally give economic advice to younger people who want to know what I did. Some of them have let me look at their Quicken reports and what amazes me is how much money people piss away on eating and drinking out.
But people can't control themselves. They squander their earnings. And then, 20 years later, when they have so little to show for 20 years of labor they get mad at those who made different decisions.
And I'm not talking about "the poor". I'm talking about everyone else who had disposable income that they know, deep down, they shat out. That was their choice. I wish they'd quit throwing their bile at those of us who made different decisions.
We all make choices. And I don't begrudge the choices other people make until they start to hate me because I didn't make the choices they did.
I started with nothing. *Nothing*. I was the latch key kid who grew up in a 2 bedroom low-end apartment surrounded by welfare mothers and druggies. When I put myself through college (sorry, no pell grants, my mother had foolishly worked and had, by the time I was 18, had bought a house -- an asset).
When I started my little Stardock business, I didn't even qualify for a small business loan. I only had sweat equity. No rich uncles or angel investors. My "start up" capital came from working as a proof machine operator at a bank (a job that no longer exists thanks to OCR).
And I didn't get "lucky breaks" either (another source of annoyance). My first serious effort was for an OS/2 game that resulted in $0 for me because our publisher ripped me off and paid no royalties. When I finally was able to start making money self-publishing, the OS/2 market collapsed and I had to start over, with nothing but loans on my home, in the Windows market.
What saved me was delayed gratification. I had assets by the time the OS/2 market died that I could borrow on because I hadn't consumed it on cars, gadgets, eating out, etc.
In other words: I understood something that, deep down, I think most people understand: If I can put off buying "stuff" until later but instead treat my meager earnings as capital to invest, I can, with time, end up with a lot of money.
I traded living it up in my 20s for being able to REALLY live it up in my 40s and beyond. And now, we live in a society that villainizes people like me. And that's a sad testament to our society.
And that's why I empathize with the guy in this article. You make these choices. You go without and when you're successful, people who decided to live their lives as consumers feel they're entitled to the fruits of your labor without giving anything in return. They're in for a rude awakening I think over the next 4 years.