Will the US see an uptick in European/Caucasian Immigration?

[Shawn]

Iheartthed, I gotta agree with Invest in Chicago here... what exactly are you trying to prove here? I’ve read through the back and forth a few times and I’m still not sure what you’re trying to say. The expensive jewelry analogy makes no sense.

I’d add that someone who can afford $50 million on a NYC condo is most assuredly funneling substantially more than that into multiple economic systems, including a whole lot of tax transfers to the state.

Is your point that the super rich shouldn’t .... I dunno, buy expensive realestate?

[Yuri]

I believe what he is arguing is billionaires impact on the economy goes until certain level, as most of their assets are kept relatively idle (e.g. decrepit empty big houses in London for years) while in the lower-upper middle-class, the whole sum has a bigger impact on the economy and reaching much more people.

For instance, one billionaires buying an overpriced US$ 150 million apartment, reaches far less people than 10,000 middle-class families burning the same amount of money.

That's why even though the US economy has been growing at a rather decent pace for the past decades, the middle-class income remains somehow sluggish.

[Crawford]

Originally Posted by yuriandrade

For instance, one billionaires buying an overpriced US$ 150 million apartment, reaches far less people than 10,000 middle-class families burning the same amount of money.

But there's zero evidence that billionaires are using their increased tax savings to purchase more real estate. The extreme high-end market in the U.S. has been crap the last few years.

But yes, obviously middle class wealth gains are overall better for society, since they'll consume with the extra $$.

[Yuri]

Originally Posted by Crawford

But there's zero evidence that billionaires are using their increased tax savings to purchase more real estate. The extreme high-end market in the U.S. has been crap the last few years.

But yes, obviously middle class wealth gains are overall better for society, since they'll consume with the extra $$.

The apartment was just an example to illustrate how their money waters the whole society until certain point.

About taxes, they are supposedly used to provide public services, like education, that will increase the productivity of all levels of society. And someone must pay for them, so rather a billionaire than people making the minimum wage.

[dc_denizen]

It’s not controversial to say that dollars spent by the middle class have more impact than luxury purchases by the ultra wealthy .

And there are plenty examples of recent super high end real estate buys .

[Investing In Chicago]

Originally Posted by dc_denizen

It’s not controversial to say that dollars spent by the middle class have more impact than luxury purchases by the ultra wealthy .

And there are plenty examples of recent super high end real estate buys .

This is correct - but i would also have thought, obvious.

[Investing In Chicago]

Originally Posted by yuriandrade

I believe what he is arguing is billionaires impact on the economy goes until certain level, as most of their assets are kept relatively idle (e.g. decrepit empty big houses in London for years) while in the lower-upper middle-class, the whole sum has a bigger impact on the economy and reaching much more people.

You seriously can't believe this, right? Are you saying, the average Billionaire has "most of their assets" kept relatively idle, and not in the Stock Market, Invested in Business' they own, and other places?

Like most other people, Billionaires will likely have their money diversified across multiple investment options, Real Estate included.

Nothing to see here folks.

[eschaton]

Originally Posted by Investing In Chicago

You seriously can't believe this, right? Are you saying, the average Billionaire has "most of their assets" kept relatively idle, and not in the Stock Market, Invested in Business' they own, and other places?

Like most other people, Billionaires will likely have their money diversified across multiple investment options, Real Estate included.

Nothing to see here folks.

As I said upthread, economic growth is generated by customers, not investors. Capital can - if properly invested - help to generate growth, but without underlying demand capital is meaningless.

Let me give an extreme scenario for this. Let's say Jeff Bezos buys a collection of rare, incredibly valuable works of art. Then five years later he develops some sort of new killer app which enriches him, but impoverishes the rest of the wealthy class. The result of this is his art collection has probably depreciated in value, because there are less potential buyers for his collection, and those who are interested have a lot less available capital to buy the product/asset. There might still be the same available capital overall - it just shifted from others to Bezos - but the way the capital is now concentrated means demand overall has fallen, since one rich dude buys and sells a lot less art than 10,000 of them.

[Obadno]

Originally Posted by eschaton

Let me give an extreme scenario for this. Let's say Jeff Bezos buys a collection of rare, incredibly valuable works of art. Then five years later he develops some sort of new killer app which enriches him, but impoverishes the rest of the wealthy class. The result of this is his art collection has probably depreciated in value, because there are less potential buyers for his collection, and those who are interested have a lot less available capital to buy the product/asset. There might still be the same available capital overall - it just shifted from others to Bezos - but the way the capital is now concentrated means demand overall has fallen, since one rich dude buys and sells a lot less art than 10,000 of them.

You need both the consumers and the large capital holders. Thats how you get a system like the USA and Western European countries. Where billionaires "store their money" in real estate or stocks or banks or wherever that money is not stagnant, its not sitting in a vault its how you can have a credit card, student loans, a mortgage or a business loan.

Large amounts of capital to fund and lend and produce with a wealthy active consumer base to purchase.

Most countries only have one which is why they are dependent on trade. They will have the productivity but nobody to buy it, or they have the hungry consumers but cant produce their own goods. For example, Germany or Korea have to export they dont have the people to consumer what they make. Without robust exports Germany and Korea would go into a deflationary spiral

[iheartthed]

Originally Posted by Obadno

You need both the consumers and the large capital holders. Thats how you get a system like the USA and Western European countries. Where billionaires "store their money" in real estate or stocks or banks or wherever that money is not stagnant, its not sitting in a vault its how you can have a credit card, student loans, a mortgage or a business loan.

Buying a $100M condo is not the same as buying a $100M shopping mall. A shopping mall serves as a center of commerce that supports hundreds of other businesses and thousands of jobs. A condo employs a few maids and doormen.

[mrnyc]

Originally Posted by iheartthed

Buying a $100M condo is not the same as buying a $100M shopping mall. A shopping mall serves as a center of commerce that supports hundreds of other businesses and thousands of jobs. A condo employs a few maids and doormen.

and an army of construction workers to turn it upside down and and renovate it three or four times over. people wonder why we have all these construction sheds around town in ny.

[eschaton]

Originally Posted by mrnyc

and an army of construction workers to turn it upside down and and renovate it three or four times over. people wonder why we have all these construction sheds around town in ny.

In NYC, the average new construction apartment building costs around $300 per square foot. So $100 million could get you 333,333 square feet of apartment space.

Let's say the average unit size is 700 square feet. That means 476 units of housing.

There is no way you can tell me that one condo unit for the ultra wealthy generates as much construction and maintenance work as 476 normal units of NYC housing, even considering the higher-end build and finishes that go into it.

Which is exactly what we're saying. Rich people's spending does stimulate the economy, but the same amount of money spent by average people would stimulate the economy more.

[jtown,man]

Originally Posted by yuriandrade

I believe what he is arguing is billionaires impact on the economy goes until certain level, as most of their assets are kept relatively idle (e.g. decrepit empty big houses in London for years) while in the lower-upper middle-class, the whole sum has a bigger impact on the economy and reaching much more people.

For instance, one billionaires buying an overpriced US$ 150 million apartment, reaches far less people than 10,000 middle-class families burning the same amount of money.

That's why even though the US economy has been growing at a rather decent pace for the past decades, the middle-class income remains somehow sluggish.

But we don't live in a world where governments play God*. I am not Jeff Bezos. I have not created a company that almost everyone buys from. I try not to buy from them, but just last night I got my GF some Christmas presents on there.

So no matter what seems to work better, we have to deal with reality. Some people are hyper-productive and revolutionize the world. Bezos has created a company that has made millions upon millions of people to have a better life by its convenience and affordability.

In any case, lets say the government took 80% of the extreme wealthies income every year. It's not like they are going to directly put that into middle-class folks pockets. A large amount would be eaten up by bureaucracy and inefficient programs etc..

*actually we do, and it usually ends up with a lot of unintended consequences

[jtown,man]

Originally Posted by eschaton

In NYC, the average new construction apartment building costs around $300 per square foot. So $100 million could get you 333,333 square feet of apartment space.

Let's say the average unit size is 700 square feet. That means 476 units of housing.

There is no way you can tell me that one condo unit for the ultra wealthy generates as much construction and maintenance work as 476 normal units of NYC housing, even considering the higher-end build and finishes that go into it.

Which is exactly what we're saying. Rich people's spending does stimulate the economy, but the same amount of money spent by average people would stimulate the economy more.

That may be true, but the super-wealthy have the money, not us middle-class folks. And I have yet seen a politician convince me they can take their wealth in a fair way and then distribute it to middle-class folks in a fair way.

[iheartthed]

Originally Posted by jtown,man

But we don't live in a world where governments play God*. I am not Jeff Bezos. I have not created a company that almost everyone buys from. I try not to buy from them, but just last night I got my GF some Christmas presents on there.

So no matter what seems to work better, we have to deal with reality. Some people are hyper-productive and revolutionize the world. Bezos has created a company that has made millions upon millions of people to have a better life by its convenience and affordability.

In any case, lets say the government took 80% of the extreme wealthies income every year. It's not like they are going to directly put that into middle-class folks pockets. A large amount would be eaten up by bureaucracy and inefficient programs etc..

*actually we do, and it usually ends up with a lot of unintended consequences

Amazon is built over a lot of infrastructure created by governments. Jeff Bezos didn't invent the internet, nor did he invent computers. Google didn't invent GPS. These entrepreneurs and their companies capitalized on infrastructure that governments built.

[jtown,man]

Originally Posted by iheartthed

Amazon is built over a lot of infrastructure created by governments. Jeff Bezos didn't invent the internet, nor did he invent computers. Google didn't invent GPS. These entrepreneurs and their companies capitalized on infrastructure that governments built.

Amazon has become what it has become because it offers a cheaper and faster product than others. Every company benefits from infrastructure, but they were smarter and more efficient than their competitors and therefore are reaping the benefits of a bajillion customers.

And the government isn't some God or something, we are the government. The wealthy, you know the 1% the Left thinks are evil now, contribute a huge portion of those taxes that keep the rest of us moving on highways or kids in decent schools.

[iheartthed]

Originally Posted by jtown,man

Amazon has become what it has become because it offers a cheaper and faster product than others. Every company benefits from infrastructure, but they were smarter and more efficient than their competitors and therefore are reaping the benefits of a bajillion customers.

In addition to the internet that makes Amazon possible.

Originally Posted by jtown,man

And the government isn't some God or something, we are the government. The wealthy, you know the 1% the Left thinks are evil now, contribute a huge portion of those taxes that keep the rest of us moving on highways or kids in decent schools.

lol

[Obadno]

Originally Posted by iheartthed

Amazon is built over a lot of infrastructure created by governments. Jeff Bezos didn't invent the internet, nor did he invent computers. Google didn't invent GPS. These entrepreneurs and their companies capitalized on infrastructure that governments built.

Yes and that money to pay for the infrastructure is extracted by the state and then funneled to private entities to build the infrastructure. The "government" didn't build anything it just allocates resources ideally for the public good which is why its such an easy place for corruption.

Where do you think the state gets the money to build highways and fund the post office? The majority of the tax money and treasury bond holders are the wealthy and their businesses.

[iheartthed]

Originally Posted by Obadno

Yes and that money to pay for the infrastructure is extracted by the state and then funneled to private entities to build the infrastructure. The "government" didn't build anything it just allocates resources ideally for the public good which is why its such an easy place for corruption.

Government is not anymore prone to corruption than any other powerful organization. "Power corrupts" because power is literally the necessary component for corruption. The only guard that we have against corruption, whether it be by the government or private industry, is a strong system of laws.

Originally Posted by Obadno

Where do you think the state gets the money to build highways and fund the post office? The majority of the tax money and treasury bond holders are the wealthy and their businesses.

Actually, the federal reserve has been discouraging investment in treasuries by keeping interest rates low. Interest rates over the past decade are just a fraction of what they were in the 1980s.

[The North One]

Originally Posted by jtown,man

So no matter what seems to work better, we have to deal with reality. Some people are hyper-productive and revolutionize the world. Bezos has created a company that has made millions upon millions of people to have a better life by its convenience and affordability.

You really think Bezos invented E-comerce? The concept is old and has been done before by numerous people. We would still have it if Bezos was never born.

In any case, lets say the government took 80% of the extreme wealthies income every year. It's not like they are going to directly put that into middle-class folks pockets. A large amount would be eaten up by bureaucracy and inefficient programs etc..

As opposed to 100% of it being horded in an offshore account?