How effective were those stimulus checks?

[telegraph]

I know a small restaurant owner who works very hard. He saves a ton of money. He is an immigrant and does not feel anyone would ever help him in an emergency. He does not earn a lot of money. He saves.

Likely he benefits from his experience overseas. Yes, he works hard. Probably really hard. And he probably doesn’t save a lot. There isn’t a whole lot of ‘profit’ in the restaurant business. You work 60-80 hours a week, week after week.

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The point is his spending habits. He will count fractions of a cent on his handmade products in the kitchen. Then he will buy $350k house that on his income no American could afford. Then he will send his daughter a top Boston college. Yes the college did help him.

Again, you really miss the point of the book. Depending where he is, he will buy a moderate home in a moderately priced neighborhood. Maybe a fixer up and he will spend hundreds of hours fixing it up. And yes, he will carefully monitor his expenses. Otherwise you go broke which more than 70% of restaurants do.

I doubt he’ll buy a 350K home in most areas…and you gotta be joking that ‘no American can afford’…heck, the "The median home price in the United States is $374,900 as of the second quarter of 2021. "… and millions are buying and 70 million or more families own houses.

Your logic is flawed.

IF he has low income and lots of kids, his kids likely will not be going to Harvard but state schools with scholarships. Same as many other Americans. And they’ll be working summers and part time during the year because they’ve been trained to ‘work hard’.

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The millionaire next door will spend in a big way on his tools and heavy equipment. He will then get penurious over anything else down to the penny. The book missed the point entirely as if all the millionaire does is save.

The TMND invests in money making assets…but he likely drives an older car. Doesn’t dress ‘fancy’ or need bling or 20 outfits. He probably doesn’t take $10,000 vacations three times a year, doesn’t join an expensive country club, and has family outings in the park, or a short drive to the seashore or the mountains.

The TMDN is ‘frugal’. That doesn’t mean he doesn’t spend but doesn’t waste money like so many Americans do to ‘conspicuously consume’.

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Ya know, in my entire life, I’ve probably had coffee at Starbucks six times (when only option at airport) . I’m sure your immigrant friend is likely in the same boat…

t.

[Leap1]

Again, you really miss the point of the book.

Telegraph,

I addressed the $1 million per year income in another post in this thread. That is totally relevant.

The book is a nonstarter. I understand that is about assets such as a house.

My friend has a coffee from a coffee shop every day. His wife for a long time shared her large starbucks with him. He prefers Dunkin and currently they share a large coffee from DD. It was anecdotal. If you work over 70 hours every week and never a vacation you buy yourself something every day.

[MarkR]

You did not prove your point at all. You did not even try to prove your point at all.

I don’t think I have to “prove” arithmetic. The proofs are hundreds, sometimes thousands, of years old, and quite well known at this point.

So 1 in 10,000 people make $1 million per year. If their households are about 2.5 people and we say everyone is in a household that means 1 in 4000 households have $1 million or more in income.

That is not as rare as saying the 0.1%.

LOL. I think I found the problem … you don’t understand arithmetic the same way the rest of us do.

I suppose now we can understand why so many thought that the Arby’s 1/3 pound hamburger was smaller than the McD 1/4 pounder … because 4 is bigger than 3.

Ok, sorry about that. I’ll explain in detail -

1 in 1 is 100%
1 in 10 is 10%
1 in 100 is 1%
1 in 1000 is 0.1%
1 in 4000 is 0.025%
1 in 10000 is 0.01%
1 in 100000 is 0.001%

This list is in order of rarity. So 1 in 4000 is RARER than 0.1%.

In any case, whatever the 1 in 4000 (or 1 in 1000) are spending is irrelevant because collectively they don’t amount to much aggregate spending. And the inflation statistics are collectively across everyone and everything.

You’re also completely wrong about the “millionaire next door”. The vast majority of them don’t overspend on personal items and also don’t overspend on business related items. First of all, most of them work for someone to begin with, but even the ones that own a small business are frugal in their life and frugal in their business. THAT’S HOW THEY SAVED UP THAT MILLION OR THREE MILLION!!!

Why are you so wedded to the fantasy that “the rich” are causing inflation? It’s just so wrong, it’s laughable. Inflation is caused too much demand (and 1 in 4000 households don’t increase demand much at all) and not enough supply, and right now we have a little excess demand for a lot of stuff, and constrained supply of a lot of stuff. That’s it. That’s the whole thing. The fed can’t really improve supply, certainly not quickly, but they CAN tamp down demand by slowing the economy and reducing the supply of money available to pay for stuff.

I also see the gravy train. If you will. Meaning it is not just the person making over $1 million per year doing the spending. It is their immediate family. It is their top employees. It is their service contractors, or tradesmen and women buying materials for jobs that must get done. There is a cascade effect. And that is something you seemingly do not see but are experiencing in the current inflation.

Yes, and the people that drive the trucks with their groceries. And the dispatcher of that truck. And the Amazon delivery folks. And the dude over at Louis Vuitton that assembles their bags. And the clerk at the LV importer. And the pilot of the plane they used to fly over to Napa. Another way to say this is “everyone” … and, congratulations, you now understand where the inflation is coming from … it’s coming from EVERYONE. Everyone across the country spending money, often on stuff that is in short supply. THAT is why the Fed wants to take away some of that money, and make some of that money more expensive to get hold of (“interest”).