# How to increase the GDP rate to 4% **URL:** \ **Category:** Great Debates\ **Created:** [May 29, 2017, 10:53pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676 "2017-05-29T22:53:34Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [May 30, 2017, 2:21am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/41 "2017-05-30T02:21:31Z")
I think the OP is confused about what businesses / wealthy people do with their money. There aren’t really many Scrooge McDuck figures in real life. Rich people don’t like to keep their fortunes in a giant vault so they can swim in it. They by and large either invest it in businesses, which increases consumption, or they put it in the bank, which loans it to individuals and businesses that increase consumption. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [May 30, 2017, 2:27am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/42 "2017-05-30T02:27:52Z")
> [@Barack\_Obama](#): > > The state of south carolina has the worst roads in all of America … Not sure if you intended this as a factual claim, but it doesn’t appear to be correct. [https://www.transportation.gov/policy-initiatives/grow-america/road-and-bridge-data-state](https://www.transportation.gov/policy-initiatives/grow-america/road-and-bridge-data-state) ---
**Author:** ![Barack\_Obama](https://avatars.discourse-cdn.com/v4/letter/b/dc4da7/32.png) [@Barack\_Obama](https://boards.straightdope.com/u/Barack_Obama)\ **Post date:** [May 30, 2017, 2:34am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/43 "2017-05-30T02:34:23Z")
> [@HurricaneDitka](#): > > I think the OP is confused about what businesses / wealthy people do with their money. There aren’t really many Scrooge McDuck figures in real life. Rich people don’t like to keep their fortunes in a giant vault so they can swim in it. They by and large either invest it in businesses, which increases consumption, or they put it in the bank, which loans it to individuals and businesses that increase consumption. Well according to what I’ve learned from being around billionaires and millionaires is everyone invests. Buying equity, royalty, investing in stocks, whatever it is they’ll spend money to make even more money. That’s how being rich works, you may spend 500k to increase production, but you’ll produce 500k products earning you 5 million. With every single thing I know about the world, rich people do not spend their income like poor people do. The amount of a rich person’s income that will be spent is nothing compared to the amount of a poor person’s income that will be a spent. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [May 30, 2017, 2:43am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/44 "2017-05-30T02:43:02Z")
> [@Barack\_Obama](#): > > Well according to what I’ve learned from being around billionaires and millionaires is everyone invests. > > Buying equity, royalty, investing in stocks, whatever it is they’ll spend money to make even more money. That’s how being rich works, you may spend 500k to increase production, but you’ll produce 500k products earning you 5 million. > > With every single thing I know about the world, rich people do not spend their income like poor people do. The amount of a rich person’s income that will be spent is nothing compared to the amount of a poor person’s income that will be a spent. They invest, and the companies they invest in take that investment and do things like hire people, rent office space, buy advertising time and materials, etc. In other words, the money gets spent. ---
**Author:** ![Barack\_Obama](https://avatars.discourse-cdn.com/v4/letter/b/dc4da7/32.png) [@Barack\_Obama](https://boards.straightdope.com/u/Barack_Obama)\ **Post date:** [May 30, 2017, 2:44am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/45 "2017-05-30T02:44:21Z")
> [@HurricaneDitka](#): > > Not sure if you intended this as a factual claim, but it doesn’t appear to be correct. [https://www.transportation.gov/policy-initiatives/grow-america/road-and-bridge-data-state](https://www.transportation.gov/policy-initiatives/grow-america/road-and-bridge-data-state) A few years ago we got funding to expand upon our roads, but nobody saw anything done to fix our roads. Now apparently we couldn’t get funding ro as much funding as we needed to actually fix our roads. Sure they built a new bridge a decade ago, but they didn’t fix the roads. It seems to me that upstate has better roads than the low country. Maybe I’ll take a video of driving down Charleston so you can see how bad the side walks, roads, empty plots of land and houses are. The way my state works is they fix the areas or clean up where more predominately white, and wealthier people move. For example, park circle in the past decade has had a lot more wealthier white individuals move in creating new homes and communities, where the blacks and poor people were moved out into the growing ghetto that is no more than 3 minutes from Park circle. You can travel less than a mile and go from a clean proper looking enviroment to a run down shit town that hasn’t been touched since the 1970s. So maybe we did get funding, but I and nobody I know has seen it. And we had our politicians bitch about not having enough funding to fix the roads, yet they continue to make certain places look better for tourism and rich people, but completely ignore the ghetto and parts of the city that look like a ghetto. It took my island 2 decades to get a fucking sidewalk on maybank hwy. 20 years of people talking about it, not till a few years ago did it actually get built. They’ve been talking about building new bridges and stuff for years and years but never do. The traffic just gets worst and worst, and the roads do to. All that funding goes towards is making the place look good for tourists and rich people. The regular south Carolinian doesn’t see any of that funding. ---
**Author:** ![Barack\_Obama](https://avatars.discourse-cdn.com/v4/letter/b/dc4da7/32.png) [@Barack\_Obama](https://boards.straightdope.com/u/Barack_Obama)\ **Post date:** [May 30, 2017, 2:46am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/46 "2017-05-30T02:46:48Z")
> [@HurricaneDitka](#): > > They invest, and the companies they invest in take that investment and do things like hire people, rent office space, buy advertising time and materials, etc. In other words, the money gets spent. What happens if nobody can afford the product they’re now selling more of? You can keep throwing money around like venture capitalists but that’s not going to help the rest of the world. You may make a profit, but the country wont. Those jobs aren’t going to matter if you aren’t paying your employees enough to buy your own product. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [May 30, 2017, 3:16am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/47 "2017-05-30T03:16:48Z")
> [@HurricaneDitka](#): > > **Barack Obama** , do you have any idea how many “people who are working full time” only make the minimum wage? Some vague notion? A guess? Anything? As of 2013 (the latest date I found), 3.3 million Americans are working full-time at the federal minimum wage of $7.25/hour. The average full-time minimum-wage worker is 35 years old, according to the Congressional Budget Office. ---
**Author:** ![HoneyBadgerDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honeybadgerdc/32/1033_2.png) [@HoneyBadgerDC](https://boards.straightdope.com/u/HoneyBadgerDC)\ **Post date:** [May 30, 2017, 3:20am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/48 "2017-05-30T03:20:47Z")
Even though I am a conservative I do believe in investing in education for those who actually pass their classes. Intellectual resources are a very real thing and can help to spur the economy just like a natural resource if handled right. I believe this is our biggest threat right now if we don’t keep pace with the rest of the world. ---
**Author:** ![Caldazar](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Caldazar](https://boards.straightdope.com/u/Caldazar)\ **Post date:** [May 30, 2017, 3:40am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/49 "2017-05-30T03:40:13Z")
> [@Barack\_Obama](#): > > What happens if nobody can afford the product they’re now selling more of? You can keep throwing money around like venture capitalists but that’s not going to help the rest of the world. You may make a profit, but the country wont. Those jobs aren’t going to matter if you aren’t paying your employees enough to buy your own product. Then the product will no longer get produced, and consumers, businesses, and business investors all suffer. I feel like you are focusing too much on the consumption/demand side and ignoring the production/supply side. You seem to be implying that if you get more dollars into the hands of the poor, that in-and-of itself will make the poor relatively better off. But this is not necessarily true at all, because the end goal is not the dollars themselves but goods and services. And it is not true that just because a person has more dollars in some short-term, that he will always be able to acquire more goods and services overall, whether in the short-term or long-term. It CAN result in such outcomes, but need not necessarily result in such outcomes; it depends entirely on the specifics of the market(s) you are attempting to influence and the mechanisms by which those dollars get into the person’s hands. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [May 30, 2017, 3:44am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/50 "2017-05-30T03:44:50Z")
> [@Johnny\_L.A](#): > > As of 2013 (the latest date I found), 3.3 million Americans are working full-time at the federal minimum wage of $7.25/hour. So less than 1%. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [May 30, 2017, 3:57am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/51 "2017-05-30T03:57:09Z")
> [@D\_Anconia](#): > > So less than 1%. [More like 2.66%](https://www.bls.gov/cps/cpsaat08.htm) 2.67% if you leave out the 16-7 year old group. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [May 30, 2017, 4:01am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/52 "2017-05-30T04:01:42Z")
> [@Barack\_Obama](#): > > What happens if nobody can afford the product they’re now selling more of? You can keep throwing money around like venture capitalists but that’s not going to help the rest of the world. You may make a profit, but the country wont. Those jobs aren’t going to matter if you aren’t paying your employees enough to buy your own product. If “nobody can afford the product”, then they probably won’t make a profit, and they’ll probably cease to be a company in fairly short order. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 30, 2017, 4:40am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/53 "2017-05-30T04:40:51Z")
> [@Barack\_Obama](#): > > Our economy is based on consumption, the poor spend their money, while the rich sit on their money. Half the economy may be based on consumption - but to consume first there must be things produced. The poor spend their money, and some will save it to hopefully become not poor. Some of the rich may sit on their money, but most will invest it somehow rather than let it stay idle. I’d say the underlying premises in your OP are poorly crafted. ---
**Author:** ![Flyer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/flyer/32/7298_2.png) [@Flyer](https://boards.straightdope.com/u/Flyer)\ **Post date:** [May 30, 2017, 5:12am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/54 "2017-05-30T05:12:51Z")
> [@Barack\_Obama](#): > > Our economy is based on consumption, the poor spend their money, while the rich sit on their money. There is also many more poor people than there are rich people. Instead of deregulating banks again how about we just increase minimum wage, so people who are working full time can actually have enough money left over after paying for bills, food, and gas. > > I’d rather have 250 million people start spending their money all across the states, compared to having a single family of multi billionaires receiving a multi million dollar tax cut so they can sit on all of it. > [@Barack\_Obama](#): > > Well according to what I’ve learned from being around billionaires and millionaires is everyone invests. > > Buying equity, royalty, investing in stocks, whatever it is they’ll spend money to make even more money. That’s how being rich works, you may spend 500k to increase production, but you’ll produce 500k products earning you 5 million. > > With every single thing I know about the world, rich people do not spend their income like poor people do. The amount of a rich person’s income that will be spent is nothing compared to the amount of a poor person’s income that will be a spent. How many poor people do you think buy yachts? How many poor people buy multi-million dollar mansions? A single really rich person can employ several people on a permanent basis in order to maintain a certain lifestyle. How many poor people can afford to hire anybody on even a part-time, temporary basis? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 30, 2017, 11:30am UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/55 "2017-05-30T11:30:06Z")
> [@Johnny\_L.A](#): > > As of 2013 (the latest date I found), 3.3 million Americans are working full-time at the federal minimum wage of $7.25/hour. The average full-time minimum-wage worker is 35 years old, according to the Congressional Budget Office. > [@D\_Anconia](#): > > So less than 1%. > [@running\_coach](#): > > [More like 2.66%](https://www.bls.gov/cps/cpsaat08.htm) > 2.67% if you leave out the 16-7 year old group. These numbers look off. [https://www.bls.gov/opub/reports/minimum-wage/2015/home.htm](https://www.bls.gov/opub/reports/minimum-wage/2015/home.htm) **Note that BLS defines full-time as only 35 hours per week.** I see 1.1MM full-time at or below MW 16+ workers, and 1.5MM part-time in 2015. We should divide that by the 16+ civilian noninstitutional labor force, 157MM [https://www.bls.gov/opub/reports/race-and-ethnicity/2015/home.htm](https://www.bls.gov/opub/reports/race-and-ethnicity/2015/home.htm) IIRC those earning under $10.10 is about 16MM and I can pull a citation if needed. Under $15 will be more but I don’t recall a number. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 30, 2017, 12:36pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/56 "2017-05-30T12:36:30Z")
The CBO report looking at raising MW to $10.10: > **[The Effects of a Minimum-Wage Increase on Employment and Family Income](https://www.cbo.gov/publication/44995)** > > Raising the minimum wage would increase family income for many low-wage workers, moving some of them out of poverty. But some jobs for low-wage workers would probably be eliminated and the income of those workers would fall substantially. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [May 30, 2017, 12:48pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/57 "2017-05-30T12:48:01Z")
I still want to know who is going to do the work to increase GDP that fast. Seasonally adjusted unemployment is down to 4.4%, and U-6 is down to 8.6%. Sure, labor force participation is 63%, but the highest we’ve ever seen is 67%. That rate includes students, retirees, and the disabled (all growing populations). That’s why I wrote that to increase GDP that much you need immigration, automation, or both. We just don’t have the workers otherwise. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [May 30, 2017, 1:00pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/58 "2017-05-30T13:00:40Z")
> [@Barack\_Obama](#): > > We can help the poor, while drastically increasing the GDP. > > There needs to be an economic theory or term for my concept. There is such a term - it’s called a “free lunch”. > [@](#): > > That’s how being rich works, you may spend 500k to increase production, but you’ll produce 500k products earning you 5 million. Can you mention a few of these investments that produce 1000% ROI on products or services that nobody can afford to buy? Regards, Shodan ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [May 30, 2017, 3:43pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/59 "2017-05-30T15:43:05Z")
> [@D\_Anconia](#): > > So less than 1%. 4.3% of hourly employees. ---
**Author:** ![Doubticus](https://avatars.discourse-cdn.com/v4/letter/d/e56c9b/32.png) [@Doubticus](https://boards.straightdope.com/u/Doubticus)\ **Post date:** [May 30, 2017, 4:39pm UTC](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676/60 "2017-05-30T16:39:18Z")
> [@HurricaneDitka](#): > > I think the OP is confused about what businesses / wealthy people do with their money. There aren’t really many Scrooge McDuck figures in real life. Rich people don’t like to keep their fortunes in a giant vault so they can swim in it. They by and large either invest it in businesses, which increases consumption, or they put it in the bank, which loans it to individuals and businesses that increase consumption. Cite: > **[A Guide to Statistics on Historical Trends in Income Inequality | Center on...](https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality)** > > The years from the end of World War II into the 1970s were ones of substantial economic growth and broadly shared prosperity.  Beginning in the 1970s, economic growth slowed and the income gap widened.  In the attached link above, scroll down and look at figure 1. The problem is, since about 1980 or so, those investments have primarily grown the wealth of the 1% and the general populations wage growth has stagnated. [Previous page](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676.md?page=2) [Next page](https://boards.straightdope.com/t/how-to-increase-the-gdp-rate-to-4/787676.md?page=4)