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June 16, 2006


Rob Hayward

I really like the argument, but it does suggest taxing older people to enhance the consumption of younger. When they already have the looks, the energy and the lack of worry, I find it hard to bring myself round to supporting that.

Bird Dog

Youth is wasted on the old, I mean age is wasted on the youth, I mean - oh, never mind.


I don't enjoy spending except, I find, on wine. Unfortunately, as you suggest, our capacity for same has shrunk. We'll just have to carry on trying to clear our debts before we retire. The Council Tax will mop up our income thereafter.

Maynard Handley

You say that spending makes us happy.

True to a point, but the reality is that it is more the act of spending than the amount spent that makes us happy. In other words, the wise man spends his $5000 on a thousand $5 purchases, and gets a thousand little jolts of happiness, rather than splurging on a single $5000 set of golf clubs or plasma TV or whatever. (There are other issues here, of course. Your TV gives you continuing utility, but the point is that you'd still get pretty much the same utility by buying a smaller $250 CRT TV or a larger $1000 LCD TV. The plasma mainly gives you bragging rights which are soon used up.)

So what's the point? The point is that the young are idiots who know very little including, in particular, how to spend money wisely. Encouraging them to spend, without educating them on how to spend, is simply encouraging them to splurge on gold-plated cell-phones. [The point is not that gold-plated cell phones are evil or a waste of money; it's that they do not do a good job of the actual goal here which is maximizing utility. Kahnemann, behavioral economics, all that stuff.]
Not that I think educating them will do any good in general, though it's better than nothing. Personally I'd put them all on weekly allowances until they're 30, but I understand that this is widely considered to be impractical.


"This doesn't, of course, mean transferring wealth from old people to young ones"

It doesn't mean it, of course, but it does suggest it, surely?

james C

Why do you believe that the marginal utility of money is greatest when we are unhappiest?

James C

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