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10 people 10 million dollars vs 2,000 people 50 thousand dollars

jdog21

jdog21

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Explain how giving 10 people 10 million dollars is better then giving 2,000 people 50 thousand dollars for the economy?
This seems like a question of trickle down economics vs redistribution of wealth but please keep your answers within the framework of the question?
 
jdog21 said:
Explain how giving 10 people 10 million dollars is better then giving 2,000 people 50 thousand dollars for the economy?
This seems like a question of trickle down economics vs redistribution of wealth but please keep your answers within the framework of the question?
Click to expand...

What people?
 
jdog21 said:
Explain how giving 10 people 10 million dollars is better then giving 2,000 people 50 thousand dollars for the economy?
This seems like a question of trickle down economics vs redistribution of wealth but please keep your answers within the framework of the question?
Click to expand...

In the first scenario, 1,990 people get nothing? Seems to me your first model creates abject poverty and strife; your second scenario is far preferable in all ways.

To me, the best model for sustained economic activity would be distribution along a cure, but as a snapshot in time -- assuming this is a one-time distribution -- then everyone gets the same is the only option.
 
GhostlyJoe said:
In the first scenario, 1,990 people get nothing? Seems to me your first model creates abject poverty and strife; your second scenario is far preferable in all ways.
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You are assuming that 2000 people exist in the first example where only 10 are mentioned
 
Crovax said:
You are assuming that 2000 people exist in the first example where only 10 are mentioned
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If there isn't the same population in both scenarios, then what's the point of the exercise?
 
GhostlyJoe said:
If there isn't the same population in both scenarios, then what's the point of the exercise?
Click to expand...

There is none, theres not enough information for the scenario to mean anything. Who is giving the money, where is the money coming from, are there any conditions attached to the money

Even if the population is the same think about it like this, 10 people of 330 million get 10 million dollars or 2000 people of 330 million get 50 thousand dollars. Seems like neither would be very beneficial.
 
GhostlyJoe said:
In the first scenario, 1,990 people get nothing? Seems to me your first model creates abject poverty and strife; your second scenario is far preferable in all ways.

To me, the best model for sustained economic activity would be distribution along a cure, but as a snapshot in time -- assuming this is a one-time distribution -- then everyone gets the same is the only option.
Click to expand...

GhostlyJoe said:
If there isn't the same population in both scenarios, then what's the point of the exercise?
Click to expand...
The greatness of the economy doesnt care about the poverty and strife. Those are social constructs. The point is what is better for the economy.
 
Crovax said:
There is none, theres not enough information for the scenario to mean anything. Who is giving the money, where is the money coming from, are there any conditions attached to the money

Even if the population is the same think about it like this, 10 people of 330 million get 10 million dollars or 2000 people of 330 million get 50 thousand dollars. Seems like neither would be very beneficial.
Click to expand...
Its a dumb down example of numbers to provoke a thought response. The number could be exaggerated to fit a better construct if you fill so inclined. And yes we are talking about the same sample size of population.
For instance 10 multimillionairs would be able to invest their capital into business and hire more people due to business exspansion but i would think to a lesser exstenet then the 2000 people. The 2,000 people spending their 50k would stimulate more economic growth in my opinion.
 
jdog21 said:
Its a dumb down example of numbers to provoke a thought response. The number could be exaggerated to fit a better construct if you fill so inclined. And yes we are talking about the same sample size of population.
For instance 10 multimillionairs would be able to invest their capital into business and hire more people due to business exspansion but i would think to a lesser exstenet then the 2000 people. The 2,000 people spending their 50k would stimulate more economic growth in my opinion.
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50k isn't spending money I bet a lot of those people would use that money to pay off already existing debts which in itself wouldn't stimulate the economy. However if you gave 100 million people 1 dollar each they would almost certainly spend it right away :shrug:
 
Crovax said:
50k isn't spending money I bet a lot of those people would use that money to pay off already existing debts which in itself wouldn't stimulate the economy. However if you gave 100 million people 1 dollar each they would almost certainly spend it right away :shrug:
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Thanks for pointing out the flaw in my question, i should have given a specified time frame, like per year for 10 years.
But in regards to you 1 dollar approach the type of economic response would be 1. short lived and 2. would only benefit the fast food industy or retail sectors.
 
jdog21 said:
The greatness of the economy doesnt care about the poverty and strife. Those are social constructs. The point is what is better for the economy.
Click to expand...

Huh? Economy is by definition an interaction of people -- the production and consumption of goods and services. An economy that doesn't serve its population is a terrible economy. If want us to only consider GDP growth, then say that, but there is still not enough information in your thought problem to make it meaningful.
 
GhostlyJoe said:
Huh? Economy is by definition an interaction of people -- the production and consumption of goods and services. An economy that doesn't serve its population is a terrible economy. If want us to only consider GDP growth, then say that, but there is still not enough information in your thought problem to make it meaningful.
Click to expand...

Again an economy doesnt care wether you think its terrible or not, look at china for example great economy but doesnt serve its people very well but that doesnt take away from the fact that they are the second largest economy in the world. GDP growth is just one way to messure economic growth but its not entirely accurate either. Its not hard to fill in the gaps to provide an answer and nothing on this sire is meaningful.
 
jdog21 said:
Again an economy doesnt care wether you think its terrible or not, look at china for example great economy but doesnt serve its people very well but that doesnt take away from the fact that they are the second largest economy in the world. GDP growth is just one way to messure economic growth but its not entirely accurate either. Its not hard to fill in the gaps to provide an answer and nothing on this sire is meaningful.
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I answered your question. You declared my answer invalid based on rules that you never outlined and now decline to clarify.

So here's my real answer: An economy that doesn't serve its community is a terrible economy regardless of GDP. I mean, slavery is an economic system that can lead to robust growth, too, but its abuses are intolerable.
 
jdog21 said:
Explain how giving 10 people 10 million dollars is better then giving 2,000 people 50 thousand dollars for the economy?
This seems like a question of trickle down economics vs redistribution of wealth but please keep your answers within the framework of the question?
Click to expand...

Depends if the 10 will spend the money on goods and services with the same abandon as the 2,000 people.
 
GhostlyJoe said:
If there isn't the same population in both scenarios, then what's the point of the exercise?
Click to expand...

Let's say the total population is 100K - in either case, very few people get a prize. What is missing is where the prize money came from and how it is decided who (out of everyone) wins the prizes. Let's assume a lottery scenario for now, where the prize pot is voluntarily created, each ticket costs $100 and has a single chance to win, a random draw selects the winners and that drawings will be held whenever the pot reaches $10M.

The question then becomes - which format generates more ticket sales (how frequent are the drawings)? The choices are fewer winners with a bigger prize for winning or more winners with a smaller prize for winning. On that basis, I would prefer to have a chance to win a larger pot (if I were to win) but with lower odds of winning it. My reasoning is that $50K, while nice, is not enough to retire on while $10M surely is.
 
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ttwtt78640 said:
Let's say the total population is 100K - in either case, very few people get a prize. What is missing is where the prize money came from and how it is decided who (out of everyone) wins the prizes. Let's assume a lottery scenario for now, where the prize pot is voluntarily created, each ticket costs $100 and has a single chance to win, a random draw selects the winners and that drawings will be held whenever the pot reaches $10M.

The question then becomes - which format generates more ticket sales (how frequent are the drawings)? The choices are fewer winners with a bigger prize for winning or more winners with a smaller prize for winning. On that basis, I would prefer to have a chance to win a larger pot (if I were to win) but with lower odds of winning it. My reasoning is that $50K, while nice, is not enough to retire on while $10M surely is.
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That's a more interesting scenario, imo. In the real world, the larger, less-frequent pot almost always generates more ticket sales, in large part due to the marketing effect of the advertised pot. We see this is Powerball and Mega Millions drawings. Huge pots lead to headlines lead to lines at the lottery counter, even though any Mega Millions pot would be life-changing for the average ticket buyer, it's the large pots and the hoopla that draw people in! I would surmise the $100 price point would exacerbate that effect.

As far as benefit to the economy, though, not sure there is any in the lottery scenario, as the ticket sales don't generate any real productivity and the ticket-buying population as a whole is guaranteed to extract less value from the lottery than the money they put in.
 
GhostlyJoe said:
That's a more interesting scenario, imo. In the real world, the larger, less-frequent pot almost always generates more ticket sales, in large part due to the marketing effect of the advertised pot. We see this is Powerball and Mega Millions drawings. Huge pots lead to headlines lead to lines at the lottery counter, even though any Mega Millions pot would be life-changing for the average ticket buyer, it's the large pots and the hoopla that draw people in! I would surmise the $100 price point would exacerbate that effect.

As far as benefit to the economy, though, not sure there is any in the lottery scenario, as the ticket sales don't generate any real productivity and the ticket-buying population as a whole is guaranteed to extract less value from the lottery than the money they put in.
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The effect on the economy is largely a SWAG in any income redistribution scheme. Many theorize that taking from the rich and giving to the poor helps "everyone" but that seems to assume that the poor spend/invest wisely but, if that were the case, then why were they poor?
 
ttwtt78640 said:
The effect on the economy is largely a SWAG in any income redistribution scheme. Many theorize that taking from the rich and giving to the poor helps "everyone" but that seems to assume that the poor spend/invest wisely but, if that were the case, then why were they poor?
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I think that's an oversimplification of redistribution theory. People can be rich or poor for any number of reasons at any given time. While I don't disagree that smart choices tend to create long-term gains and poor choices create long-term losses, earnings, wealth, and economic prospects vary greatly over the course of any one individual's lifetime. Basically, redistribution of capital to some degree will always be necessary to sustain the system over generations. Otherwise, there is a tendency for pooling and stagnation long-term, and the meritocratic system breaks down as resources and opportunity begin to diverge.

Of course, redistribution is a humanitarian issue and not just an economic one. As a society, how much pain are we willing to let the poorest and least capable among us suffer regardless of merit?
 
GhostlyJoe said:
I think that's an oversimplification of redistribution theory. People can be rich or poor for any number of reasons at any given time. While I don't disagree that smart choices tend to create long-term gains and poor choices create long-term losses, earnings, wealth, and economic prospects vary greatly over the course of any one individual's lifetime. Basically, redistribution of capital to some degree will always be necessary to sustain the system over generations. Otherwise, there is a tendency for pooling and stagnation long-term, and the meritocratic system breaks down as resources and opportunity begin to diverge.

Of course, redistribution is a humanitarian issue and not just an economic one. As a society, how much pain are we willing to let the poorest and least capable among us suffer regardless of merit?
Click to expand...

Since the birth rate in the US in inversely proportional to income (the poorer do more begetting than the richer do) and many of our income redistribution programs (aka the "safety net") use a function of household income and household size to assign benefits we may actually be creating (or at least sustaining) an endless cycle of poverty - the opposite of what many say is the purpose of the "safety net".

https://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/
 
ttwtt78640 said:
Since the birth rate in the US in inversely proportional to income (the poorer do more begetting than the richer do) and many of our income redistribution programs (aka the "safety net") use a function of household income and household size to assign benefits we may actually be creating (or at least sustaining) an endless cycle of poverty - the opposite of what many say is the purpose of the "safety net".

https://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/
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Oh, our models are troubled, for sure. I think most rational people recognize the need for a mixed economy, but our politics are broken to the point where we can't make much progress toward fixing what isn't working.
 
GhostlyJoe said:
Oh, our models are troubled, for sure. I think most rational people recognize the need for a mixed economy, but our politics are broken to the point where we can't make much progress toward fixing what isn't working.
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Yep, many (if not most) income redistribution programs that do not work are simply said to lack resources or to be underfunded. Giving a moron more money as a reward for begetting more morons is never going to result in less morons that are going to require economic support for life.
 
jdog21 said:
Explain how giving 10 people 10 million dollars is better then giving 2,000 people 50 thousand dollars for the economy?
This seems like a question of trickle down economics vs redistribution of wealth but please keep your answers within the framework of the question?
Click to expand...
It would depend on how the money is used

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