Originally published at: http://boingboing.net/2017/01/17/reminder-if-you-have-one-penn.html
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I have a mortgage. Therefore, surrounded by everything I own, I have nothing.
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So more accurately, if you have one penny and no debt your net worth exceeds that of the poorest 40%. The author’s reasoning seems dubious to me. Debt is not a good thing in itself, though the ability to borrow can be, assuming you are able to pay it back or at least maintain a decent life while servicing your debts. Even then a debt load that more or less permanently siphons off any surplus wealth you manage to create isn’t a positive in any rational view of the world.
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My penny and I suddenly feel very wealthy. 
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The quote really seems to assume the most uncharitable implication. “…it would be better were these people to have saved extra money, rather than spend it on things they desperately need…” Well, if you have desperate needs, that’s not really “extra money” is it? With that cleared up, there is no “unrealistic and distasteful” conclusion and you’re just left with a not particularly useful measure of wealth.
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Well, only if you owe more on the mortgage than the house is worth. There was a church in Arlington VA that was underneath a condo development. I observed that during the RE bust there were plenty of people living in the condos that were poorer than the homeless people getting services at the church.
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I think taking debt into account murks the waters a bit but it doesn’t mean that it’s wrong to take that into consideration. But it does make it much harder to clearly define what wealth is because two people with equal wealth and debt may still have fairly different living situations and quality of life.
Coincidentally i’ve paid off a credit card yesterday. I’ve one more to pay off, though i still have my dreaded student loans and am looking to buy a car within the next couple of months. Sigh, it never bloody ends does it?
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To be fair, the report does also give the same statistic, with the debt removed:
If you ignore the net debt, the wealth of the bottom 50% is $1.5 trillion. It still takes just 56 of the wealthiest individuals to equal the wealth of this group
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Huh - if that isn’t a motivator to be debt free, I dunno what is.
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I agree with this. I think in the US there are very many people with high quality of life and net wealth in the negatives. By the Oxfam standard, they would be categorized as poorer than a refugee who has no money and no ability to borrow money. The refugee may starve to death, but Oxfam’s standard makes him look like Warren Buffett compared with the American middle class.
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Ironically, Oxfam is operating on the same flawed assumption as your typical Wall Street greedhead is: that cash is the only thing in the world that has value.
The financial disparity is still outrageous and unsustainable, though.
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Not only. He also holds the legally recognised title to the home, and with it the ability to live in it and enjoy the premises as long as he keeps to his (regulated) mortgage agreement.
Americans are not going to get anywhere in these discussions unless they start getting back to the idea that, for the vast majority of us, a home is a place to reside first and an investment second. Being underwater on your mortgage sucks, but not having a roof over your head sucks a lot more.
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The point that everybody here seems to be making is that “net worth” is a poor estimate of the economic quality of life because it is generally better to have high assets AND high debts so long as you have sufficient income to service those debts than it is to have no assets and no debts and little income to change that. That’s not to say that debt is good, but that to the extant that having access to the things that money can buy can bring you happiness that happiness is not dependent on whether those things have been purchase with borrowed money. Although debt can and will be a big determiner on whether you can keep those things.
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Don’t worry, after the next four years, we’ll be in that 40%!
Thanks Drumpf and TGOP!
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What I find interesting is that the Oxfam report is just math, it bears no judgement or says we should redistribute that money. However, my Facebook feed is filled with right-wingers coming out to defend other people’s wealth against communism (yes, I have those kinds of “friends”, who I keep connected merely for my amusement)
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If you want to make comparative statements about large groups, the temptation to try to translate everyone’s assets into a dollar value becomes pretty strong for fairly obvious reasons; but the tricky bit is actually doing so properly.
In this case, it seems like they would have been better off focusing on something like buying power rather than net worth.
Yes, its pretty alarming how many people own nothing or less, in net worth terms; but there is a fairly enormous difference between owing enough that your estate is a write-off, but being able tread water more or less indefinitely, and being a mud farmer who has nothing and owes the local loan shark $5 for the seeds that failed to yield an adequate crop this year.
Given the exciting trends toward enhanced inequality in the developed world, being poor-as-in-zero-potential-for-capital-accumulation isn’t a good idea; but even when your nominal worth is much more negative, courtesy of access to advanced financial services, it hurts a hell of a lot less than being poor-as-in-seriously-fucked, though the latter tend to have fairly small debts because nobody will lend them anything.
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It’s almost like they have a sneaking suspicion about what the common normative assessment of this purely informational document might be…
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If you have more than one mortgage, are you Charlie Sheen winning!!! ?
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Is this Cory driving trollies Mark?
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