Lower classes spend 100% of their discretionary money' on assets, 'it's just that their 'discretionary money' is 0.
Assuming you mean non-discretionary expenses. If so, that describes a third of Americans, down from half in 2002 [1]. A strong majority of Americans (a) get more money from the government than they put in, (b) own assets or (c) route discretionary income to consumption over asset accumulation.
We have an inequality problem. But the facts paint a more moderate, and thus addressable, picture than the pundits.
[1] https://www.marketingcharts.com/industries/financial-service...
It's very simple.
Your source is from 2007. I don't have that particular figure; but in 2019, the bottom 50% of the wealth distribution continue to own almost nothing, the top 10% of the wealth distribution own 71% of all assets and the middle 40% own about 28% [1].
> A strong majority of Americans get more money from the government than they put in
This is literally the point of taxes: to redistribute resources.
> (b) own assets
See above, but ownership of assets is distributed incredibly unequally.
> (c) route discretionary income to consumption over asset accumulation
This argument that poor people remain poor because they make bad choices (formally called "culture of poverty") has been heavily criticized. Most economists and sociologists now reject it and have done so for over 30 years.
[1] https://wid.world/share/#0/countrytimeseries/shweal_p50p90_z...
Not sure where it was called a bad choice. It's simply a preference for consumption today over asset accumulation. For most people, that's a fine and comfortable way to live.
Which is not a paramount motivation for everyone.
The difference between earning $100K and $500K for most developers, for example, is [most] of that extra income going into investment assets; that's because the first $100K covers most of the fixed costs, and short of luxury purchases, there's not much more you need day-to-day. The gap between earning $30K a year and $100K a year is way bigger in terms of QOL than between $100K a year and $1M a year.
(I'm in between both worlds in a way since I have friends making < 30K a year and > 200K a year and I have two careers, one high income and one relatively low income and have thought about the issues quite a bit)
As a nearby comment said better than I could (thanks whakim! for https://news.ycombinator.com/item?id=28907429 ), the "culture of poverty" idea has been discredited for decades, yet it persists because it's certainly easier to blame individuals than change a system that so severely disfavors them.
Your link just says "most economists and socioligists agree" btw, it didnt source it. Also it said the point of taxes is to redistribute resources which us heavily contested and a lot of ppl disagree, stating that as fact not opinion makes the other stuff it says look less credible because clearly it has an agenda.
So does suggesting that a poor person could join the moneyed elite by foregoing their $13.99/mo Netflix to purchase assets -- if that isn't an agenda, I don't know what is.
Why, by saving that $168 a year, they could easily afford a single share of Alphabet (currently at 2,846.31) in, what, 16 years?
Im saying that some people who dont have enough could be in a better spot with better choices and that some personal finance education might help. Not everybody privileged enough to have parents who can teach them to be financially savvy. So high schools probably should.
Salary, salary, salary. If you're making $200K, none of the above even register (saving $200 a year? or even 2K by forgoing a latte every day - who cares? it won't make an iota of difference). If you're making $30K / year, you could do all of the above, forgo every single pleasure in life and you've still got a huge uphill battle.
But that's not really the point, I think. The idea that (most) people remain poor for reasons _other_ than their choices is difficult to credit. Obviously their choices are only the _proximate_ cause; there may be structural factors causing those choices in the first place, but most people who are poor (as in, do not have assets) are not poor because they are being literally robbed at gunpoint. Imagine two people living in the same neighborhood:
Person A makes $30k/year and saves nothing. Person B makes $35k/year and saves nothing.
Person B is _making choices_ that are different from Person A - they are spending an additional ~5k/year on _something_. You can come up with all sorts of reasons why those choices are reasonable - I sure as heck understand not spending the bare minimum on life's necessities - this isn't a moral judgment! But those choices are being made and they have fairly predictable long-term consequences. If it's possible to live on 30k/year in some set of circumstances, anyone who then occupies comparable circumstances and earns more than 30k/year has a choice to either live below their means... or to not do that. You don't need to call them "bad choices" for this to be true.
Certainly there is a non-trivial number of people whose starting circumstances were such that they truly had no good options, but that's not most people who could reasonably be described as "poor".