# If Bill Gates Lost $12 Billion... **URL:** \ **Category:** Great Debates\ **Created:** [May 3, 2013, 6:22pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436 "2013-05-03T18:22:45Z")\ **Posts on this page:** 15\ **Page:** 6
**Author:** ![Buck\_Godot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/buck_godot/32/6573_2.png) [@Buck\_Godot](https://boards.straightdope.com/u/Buck_Godot)\ **Post date:** [May 7, 2013, 3:40pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/101 "2013-05-07T15:40:43Z")
> [@emacknight](#): > > Well, sure, if someone were to take his money, that person would certainly be better off. Then again, dishing out that much money might just drive up prices (ie rent and shiny rims) meaning no one is actually better off. > > But that wasn’t the question. I’d like to know how you’d personally be better off. > > Remember what you said, "As for the people here who are saying income inequality is not bad: WTF? " > > Lowering Gates’ wealth and income will improve income/wealth inequality. So if it’s such a bad thing, why isn’t your life better after he goes broke (or in this case has fewer billions)? But income inequality is so bad because the particular distribution of wealth is inefficient in terms of societal well being. The problem with wealth inequality isn’t that rich are just too rich, it is the fact that poor people don’t need to be so poor. However regarding Bill Gates losing 12 billion dollars the one person whose lifestyle won’t be significantly effected by this is Bill Gates. He will still have 5 billion left and an income in the hundreds of millions. Anything he wants to buy he can. Those 12 Billion dollars mean less to him than would $8,000 to any one of the 1.5 million households living in extreme poverty (less than $2 per day before benefits). ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2013, 4:46pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/102 "2013-05-07T16:46:53Z")
> [@adaher](#): > > BTW, if we’re worried about our GINI index standing compared to other countries, there’s an easy way to fix it: stop importing poor people. Our much more liberal immigration policies contribute to inequality. > > Paul Krugman has said that you can either have a generous welfare state or a liberal immigration policy. You can’t have both. How many poor, legal immigrants are there? All the immigrants around me (most of my department) are not poor and are generating all kinds of wealth. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2013, 4:54pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/103 "2013-05-07T16:54:43Z")
> [@adaher](#): > > That’s a good point, and we should fix our system to prevent that kind of thing. That’s just manipulating the system to make a quick buck. > > But that’s not the cause of massive inequality either. If anything, it probably helps with inequality because it gives talentless hacks a way to become millionaires whereas otherwise they’d be on food stamps. Oops - you just contradicted yourself on free markets, because fixing the system makes the market less free. And why do you think a free market would distribute wealth? If a set of people had some advantages that let them accumulate wealth faster then others, why would they share? Even if we grant that a totally free market would maximize the creation of wealth (highly doubtful) you still wouldn’t get a reasonable distribution of wealth. A regulated free market on the other hand can correct for the worst abuses. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 7, 2013, 5:00pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/104 "2013-05-07T17:00:09Z")
Immigrants do tend to be poorer than the average American, illegals(which will soon be amnestied) even more so. > **[Demographics and Statistics of Immigrants : Asian-Nation :: Asian American...](https://www.asian-nation.org/immigrant-stats.shtml)** > > Article and statistics from the 2000 Census on the socioeconomic demographics of Asian (and other) immigrants, including numbers on educational and occupational attainment, poverty, income, and comparisons to the U.S.-born. Immigrant poverty rate is 17% compared to 11.7% for the native born. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 7, 2013, 5:29pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/105 "2013-05-07T17:29:54Z")
> [@adaher](#): > > Immigrants do tend to be poorer than the average American, illegals(which will soon be amnestied) even more so. > > [Demographics and Statistics of Immigrants : Asian-Nation :: Asian American History, Demographics, & Issues](http://www.asian-nation.org/immigrant-stats.shtml) > > Immigrant poverty rate is 17% compared to 11.7% for the native born. Illegals definitely. But they don’t use services as much, being scared of dealing with the government. And we need to see how legal immigrants do over time. My great-grandparents were hardly rich when they came here; their children did much better. Immigration is an investment in a sense. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 7, 2013, 6:24pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/106 "2013-05-07T18:24:54Z")
True, but if you import a lot of poor people who you have to support for a generation, that puts untenable pressure on your welfare state, if it’s generous. Our skimpy one can probably withstand the pressure, but if France or Sweden tried to import a huge immigrant population they’d be in a world of hurt. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 7, 2013, 6:29pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/107 "2013-05-07T18:29:49Z")
Net migration by country: US 3.64/1000 France 1.1/1000 Sweden 1.64/1000 Germany 0.89/1000 UK 2.57/1000 Norway 1.68/1000 Netherlands 1.99/1000 Figures gleaned from [cia.gov](http://cia.gov) World Factbook. So Europe, except for maybe the Brits, have taken the lesson to heart. In order to have such generous welfare states, they have to essentially turn their countries into gated communities. Not only that, but it makes their GINI coefficient look better right now because they aren’t bringing in so many poor people. > **[List of countries by income equality](https://en.wikipedia.org/wiki/List_of_countries_by_income_equality)** > > This is a list of countries or dependencies by income inequality metrics, including Gini coefficients. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income—and everyone else has no income). > Income distribution can vary greatly from wealth distribution in a country (see List of countries by wealth inequality). Income from black market economi... And sure enough, the European countries with the least immigration have the least income inequality. ---
**Author:** ![Honesty](https://avatars.discourse-cdn.com/v4/letter/h/f04885/32.png) [@Honesty](https://boards.straightdope.com/u/Honesty)\ **Post date:** [May 7, 2013, 7:19pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/108 "2013-05-07T19:19:00Z")
> [@adaher](#): > > Those countries with 30% unemployment are broke. Austerity was forced on them by reality. > > The rest of Europe has chose to raise taxes, mostly, while keeping spending high. It’s not like any of those countries can just borrow a trillion dollars like we can. If they’d spent more wisely in the good years, then they could have done proper stimulus in the bad years. They didn’t, so they can’t, and THAT’s the cause of their problems. **Adaher** , it’s not a good idea to reduce public spending when the economy falters.Public spending doesn’t just bolster the economy, but it also enhances education, health, physical infrastructure and poverty alleviation, which are key to further economic and social development of any country. The only time you reduce spending is when the economy is riding high, like the 20’s, 50’s or the 90’s. Otherwise, spending should either remain flat or nominally increased. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [May 8, 2013, 4:19am UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/109 "2013-05-08T04:19:05Z")
That’s true, if you actually can spend, which in a recession means you have to borrow. It’s also dependent on you having run surpluses in the good times. Keynesian theory has two sides on that issue: run deficits in bad times, surpluses in good. Doing only half of it is why it never actually works in practice in most places. Plus there’s the fact that like the Laffer Curve, no one really knows how much stimulus you need. It could be a small amount, it might be more than any country can realistically spend. All depends on what the multipliers actually are. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [May 12, 2013, 10:05pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/110 "2013-05-12T22:05:19Z")
The solution to immigration isn’t simply to bar immigrants, it’s to make conditions in Third World countries good enough that nobody wants to leave them. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [May 12, 2013, 11:10pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/111 "2013-05-12T23:10:45Z")
> [@Dangerosa](#): > > He is also a fairly poor example. > > 1. He is giving away his wealth - he’ll be wealthy for his lifetime, and his kids won’t starve, but he isn’t setting them up to wealthy five generations from now. > > 2. Unlike a lot of wealthy people, he made a huge investment in himself, his company and innovated - he CREATED wealth from very little and he took thousands of people along with him. Microsoft millionaires are not uncommon. And Microsoft still employs people and adds money to the economy. > > That is quite different than a raiding CEO who makes $10M+ a year to drive a company into the dirt. If you want to bitch and moan about HOW a person makes their billions that’s fine. The problem is that the GINI coefficient doesn’t care about how, only the amount. So what you’re saying is that income inequality isn’t a relevant issue. Two societies could have identical GINI numbers, one with lots of evil rich people, and one with lots of not-evil rich people, and you consider one of those societies better than the other. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [May 12, 2013, 11:18pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/112 "2013-05-12T23:18:55Z")
> [@Voyager](#): > > As everyone has pointed out, your scenario would make a lot of people poorer also. Care to address that? Sure, most of those people are also in the top 1% meaning a further reduction in inequality, meaning people should be even better off. Yet no one here can explain how they’ll be better off. > [@Voyager](#): > > Plus, on the whole people don’t think of Gates as an evil rich guy. Again, irrelevant. The GINI coefficient doesn’t include a weighting factor for “level of evilness.” He gets scored the same way as Buffett, the Koch brothers, and the Waltons. > [@Voyager](#): > > So, people are talking about redistributing wealth, not destroying it. Again, the GINI coefficient doesn’t care. Destroying Bill’s wealth will move the coefficient, and that’s suppose to make people better off. Since so many people claim that him gaining wealth made them worse off. I’d simply like to know how. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [May 12, 2013, 11:22pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/113 "2013-05-12T23:22:40Z")
> [@Lobohan](#): > > Please read the thread. You ignoring what has been said and simply restating your OP isn’t productive. > > Hurting a rich person doesn’t do anything at all to address the systemic problem that \*causes \*income inequality. If Gates became a pauper it would do nothing to address the problem that concentrates the wealth in the hands of a few. > > Surely you can’t be confused by that, right? Nope, not confused at all. What you’re saying is that the actual GINI coefficient isn’t relevant, and that income inequality doesn’t matter. Since if Gates being a pauper tomorrow both of those metrics would improve, but nobody would be better off. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [May 12, 2013, 11:34pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/114 "2013-05-12T23:34:13Z")
> [@Little\_Nemo](#): > > I’ve already pointed out that if Gates lost his money because Windows 9 flopped then somebody else must have been selling us a better product for our computers. That is absolutely wrong. Just amazingly wrong. I’m not even going to bother addressing it, in the mean time, look up “free operating systems.” > [@Little\_Nemo](#): > > And others have pointed out that if Gates lost twelve billion dollars then somebody else must have gained twelve billion. No, again, holy fuck that is wrong. The $12 billion wasn’t a pile of cash that burned or someone stole. It was 500+ million shares of a company that people used to value at $33 and now value at $10, his wealth simply vanished, poof. He still has the 500+ shares, but they are now only worth $12 billion less. How do you not get that? Remember when Enron crashed, or the Tech bubble burst, or the beanie baby fad passed, the wealth is gone. The issue at hand is that when his wealth vanishes, the inequality gap shrinks, which is supposed to make people better off, but that doesn’t seem to be the case. I guess a few people might have been short MSFT, and they’d be richer, but not in direct proportion. > [@Little\_Nemo](#): > > There’s also supply and demand and price theory which says that even if Gates money somehow disappeared without anyone else getting it, we’d still be better off because that amount of money being removed from the economy would make the remaining money more valuable. > > But apparently these aren’t the answers you wanted to hear when you asked the question. Nope, but they are they answers I expected from you. So now you’re claiming that him losing money increases the value of the US dollar, and that is going to make everyone better off? If you want to stick with that has your premise, than just like **Voyager** and **Dangerosa** you’ve shown that the GINI coefficient isn’t relevant. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 12, 2013, 11:35pm UTC](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436/115 "2013-05-12T23:35:21Z")
> [@emacknight](#): > > Sure, most of those people are also in the top 1% meaning a further reduction in inequality, meaning people should be even better off. Yet no one here can explain how they’ll be better off. Maybe most of the wealth is in the top 1%, but most of the people are not. They have 401Ks or mutual funds or are going to get money from a pension fund which owns Microsoft stock, and in that way become poorer. > [@](#): > > Again, irrelevant. The GINI coefficient doesn’t include a weighting factor for “level of evilness.” He gets scored the same way as Buffett, the Koch brothers, and the Waltons. > > Again, the GINI coefficient doesn’t care. Destroying Bill’s wealth will move the coefficient, and that’s suppose to make people better off. Since so many people claim that him gaining wealth made them worse off. I’d simply like to know how. Basically your whole OP is a strawman. GINI is just a metric showing inequality. To fight inequality we have to lessen actual inequality, not just change the metric. Destroying wealth does not make the lives of those on the bottom any better. You are accusing people who care about inequality or caring only about the metric, not the people, thus it is a strawman. An anecdote illustrating this. When I was in grad school, my group and another group was in the basement of the CS building, and we each had PDP-11s. One day the air conditioning went out. We got issued a fan and a thermometer, with instructions to shut the machine down when the thermometer reached a certain temperature. We aimed the fan at the innards of the machine and monitored the temperature. When we went past the other group’s computer, we noticed that they had aimed the fan at the thermometer. That appears to be your concept of inequality. To make it explicit the GINI coefficient is the temperature, and your scenario is aiming the fan at the thermometer. [Previous page](https://boards.straightdope.com/t/if-bill-gates-lost-12-billion/657436.md?page=5)