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It doesn't. No one said it did. The argument I'm making is that no one has yet produced sufficient reason to assume that the gap between rich and poor is any indication of the standard of living of the poor in that country. Or the overall economic health itself for that matter.


It's a really simple thing to see. Imagine two countries with identical adjusted dollar values. In countryA, the poor earn 10k/year and the rich earn 50k/year. In countryB, the poor earn 25k/year, and the rich earn 100M/year. Does the fact that there's a smaller gap between rich and poor in one country mean that the poor are better off? Nope.


The best measurement is standard of living. You rank your entire economic spectrum based on what kinds of things they have. What percentage of the population can obtain food consistently? What percentage have a place to live? What percentage have electricity, phone, TV? What percentage own a car (or can otherwise afford transportation)? What percentage of the people can buy other things above and beyond those things? We could then measure things like number of people who own computers, or a second TV, or can afford to eat out on occasion. We can pick any specific measure of standard of living you like, but it ought to actually be in someway related to standard of living. Simply tossing out a purely relative comparison while avoiding actually looking at the conditions people are living fails to address the real question.


It is amazing how many people just repeat the mantra about rich and poor, but never bother to verify if it actually means what they've been taught it means.

Edited, Oct 14th 2009 8:17pm by gbaji

Very well could be. Cost of living could be such that 25K isn't enough, but 10K in the other country is. Don't forget that there's one person earning 100M and tons of people earning 25K.

Edited, Oct 15th 2009 8:38am by Xsarus

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Blame Ugly. This couldn't possibly have anything to do with me.

The Germans were much more driven and determined under that one Socialist guy from the 1930s & 40s... what was his name again? Anyway, he proved to me that Socialism is the best for getting people to be driven.

Jophed,

What percentage of someones earned wealth should they be able to keep? At what point do you stop supporting those who are able but refuse to work? At what point do you stop penalizing someone for being successful?

Aripya,



If you have good credit a mortgage is often less than rent. Plus you're building equity. Not to mention if you fix the place up and increase it's value that's sweat equity you've invested to improve the value of your asset. So basically you're talking about the downpayment being the major expense. Any time you're paying rent you're simply helping someone else increase their equity and value and that's never a good business decision.

Buying a house outright is one of the worst business decisions a person can make. If you lose your job and have need of cash guess what? You can't get a loan even though you have the house paid off; which if times get hard and you need the cash you would have to sell the house at a huge loss. If you want to create a safety net that's liquid take the money you were going to use to pay off the house and buy gold. That way if you lose your job you can get by without having to sell your house for a loss.

God I hope you're cute because you're dumb as rock when it comes to business.

My parents paid cash for their house, remodeled it with the profit they had selling the house we had lived in and equity build up doing all the work on the house they could by themselves and now it's worth over 150x' what they paid for it.

My siblings and I are using money from their other investments, to make minor repairs on the house before we sell it. It's very temping to use my share from the sale of the house as a down payment and buy it, though it's far too large for my needs. I could rent out part of the house though and easily cover the monthly payment on the mortgage, still leaving me with some inheritance to put aside in a trust fund for medical expenses.

Goggy,

I agree. However, if there were actually jobs to be had in Germany they might be more willing to become homeowners. I really don't want to see the US become like Germany where there aren't any jobs and no hope of becoming a homeowner.

Maybe you shouldn't have moved there to steal that job from a local boy?

If you lose your job, you likely won't be able to make payments on your mortgage anymore so you'd have to sell the house. If you have the money saved up your fine, but you're just as fine if the house is payed off because those costs aren't there and you'll have more money now due to not having to pay interest and payments, so your amount saved will be higher.

If you have a emergency that's not losing your job, you can just mortgage your house, and you're still ahead of where you would have been.

You can get ahead by investing money and maintaining a mortgage, but if the investments don't perform your far worse off.

This is all assuming someone is going to get a house regardless. Otherwise, it depends on what the housing market does in the future. It could be great or horrible. Generally I would say that you're not gaining much by buying a house just to live in. I bought my house and rent out the extra rooms, so for me it works out great.

Edited, Oct 15th 2009 10:27am by Xsarus

I hope their faces didn't stick that way.

If you payed off your house up front, all the money you saved by not making mortgage payments should be enough to continue to support yourself.