An axiomatic model of non bayesian updating
Still, even under these generous assumptions, this bill gives poor people less money than the default case of not doing it.One could argue that poor people are better off with $6 billion in actual money than $16 billion in government programs purporting to help them.
Or suppose the government keeps the $100 billion and distributes it evenly according to its existing priorities.The economic case for Bob is overwhelming – taxes on him are especially inefficient because of the extra wealth they destroy. It seems like the only important thing that happens at all in this town is Alice’s charitable donations.The amount I care about this town’s utility focuses pretty much entirely on that.Suppose Alice is an effective altruist who supports whatever charity you think is most important and does a really good job of it. She lives in a town of 1000 people where nobody else is an effective altruist and everyone else just lives a pretty decent life and spends their extra money on, I don’t know, breeding virtual cats or something. Every time Bob pays a dollar in taxes, it destroys a random two dollars’ worth of wealth somewhere in the town.The town elders meet and decide that for some reason they have to lower taxes either on Alice or Bob.So the best way to convince me to support this bill would be to find a plausible estimate of what level of growth is expected.
My best guess from the economist poll is still “approximately zero”.
Should we be debating the artistic merit of giant bronze statues of Washington, and whether it’s actually a pretty good statue that boosts tourism in the area?
Or should we be comparing it to the best possible use for that money?
If we actually had Pareto-optimal wealth redistribution, then of course, create as much wealth as possible and redistribute it Pareto-optimally. My takeaway from this story is that in societies with a lot of marginal-value-of-money inequality, economic growth is potentially less useful than working to keep the money with people who can spend it on higher-marginal-value things. How low is the marginal utility of money for the person holding the average dollar, if no efforts are made to redistribute it? How much economic growth are we sacrificing by choosing redistribution? How high a marginal utility of money do we get by redistributing it?
Point 1 is why I stress the research showing increasing inequality eg most money going to people rich enough not to really have much use for it.
But although I agree there’s a multiplier, I don’t know if it’s this big.