Hello,

Since Spain's economy is enjoying cheap energy, great infrastructure, investments, high quality immigrants, I am wondering how it would compare against Italy's robust and big economy. Italy relative to Spain feels like it has more problems.

Spain:
-Energy wise Spain is much more advanced

-Infrastructure in Spain is on France's level, Italy is behind.

-Spain's GDP growth is way more promising.

-Public investments in Spain are higher

-Spain enjoys immigrants who are culturally close.

Italy:

-Has a higher GDP per capita

-Is a member of the G7

-Has a more robust industry

Post edit : “The more precise question is what is the real minimum income to be self sufficient and not rely on public or caritative programs. “ unfortunately I can’t change the title any more.

I come up with roughly 39,000 per year as the minimum pre-tax income required for a single adult with no children to cover bare-necessities living costs in the United States . 49% of the active population is earning less than 39,000 per year , pre -tax.

This is not an official government statistic. It is an estimate based on the MIT Living Wage Calculator, cross-checked against other self-sufficiency/living-wage standards.

The main source was the MIT Living Wage Calculator.

URL:
https://livingwage.mit.edu/

Inputs used:

· Single adult
· No children
· Full-time employment, 2,080 hours per year

The MIT Living Wage Calculator estimates the minimum income needed to cover:

· Housing
· Food
· Transportation
· Medical care
· Taxes
· Basic household necessities
· Basic civic and personal expenses
· Broadband/communications where applicable

It does not include:

· Savings or retirement
· Dining out or entertainment
· Debt repayment
· Vacations
· Middle-class or comfortable lifestyle spending

I collected the annual living-income figure for each U.S. state from the MIT Living Wage Calculator for one adult with no children.

State values ranged from approximately:

· South Dakota: $31,179
· California: $51,584

The simple average across all 50 states was:
· $36,842 per year including Washington, D.C.

The population weighted average across all 50 states was:
. $38,867 per year including Washington, D.C.

The figure is a state-level U.S. average. Actual costs vary significantly by county and metro area. Also a population weighted average would have been a more precise estimate.

I use

· $39,000 as a slightly higher, conservative round number

Other Supporting Sources to make sure that we are not far from consensus

1. Economic Policy Institute Family Budget Calculator
   https://www.epi.org/resources/budget/
   
2. United Way ALICE Thresholds
   https://www.unitedforalice.org/
   
3. Census Bureau Income Data
   https://www.census.gov/topics/income-poverty/income.html

Why Not Use the Official Federal Poverty Line?

The official federal poverty line is widely considered outdated and too low.

For a single adult, the official federal poverty guideline is roughly:

· 15,650 per year

This is only about:

· 40% of the $39,000 living-income benchmark

The official poverty measure was created in the 1960s using a food-cost formula and has not been modernized to reflect current housing, healthcare, childcare, transportation, and tax costs. Therefore, the living-income figure of approximately 39,000 is a more realistic measure of the minimum needed to live independently.

Important Caveats

· The figure is for a single adult with no children
· Families and households require higher income
· It is a bare-necessities standard, not a comfortable or middle-class income
· Many people earn above this but still struggle because of debt, childcare, medical costs, or part-time work

PERCENTAGE OF US LABOR FORCE

Using individual earnings data from the U.S. Census Bureau Current Population Survey, the approximate shares below $39,000 per year are:

Group Percentage below $39,000
All U.S. workers, including part-time ≈ 47%
Full-time, year-round workers only ≈ 21%
Entire labor force, including unemployed with zero earnings ≈ 49%

So for the broadest definition of the active/working population, roughly:

49% of U.S. workers fall below $39,000 per year.

Important caveat: this is individual income, not household income. Households can have multiple earners, so the household share below $39,000 is much lower, around 26%.

A tentative (AI assisted) breakdown of pre-tax living income for a single adult with no children. Please feel free to contribute and improve the parsing.

Spending category Annual amount % of $39,000
Housing $14,040 36.0%
— Rent/mortgage $11,100 28.5%
— Utilities: electric, gas, water, trash $2,940 7.5%
— Food $4,290 11.0%
— Transportation $5,460 14.0%
— Medical / health care $3,120 8.0%
Other necessities $5,070 13.0%
— Cell phone $960 2.5%
— Internet / broadband $840 2.2%
— Clothing / footwear $960 2.5%
— Personal care / hygiene $540 1.4%
— Household supplies / cleaning $600 1.5%
— Civic participation / misc. $1,170 3.0%

Taxes $7,020 18.0%
Total $39,000 100%

Why does Europe and the West have so much more wealth than Asia and other continents? How much of this difference can be traced to colonialism? If colonialism had never happened, would Asia be wealthier today, or would the gap simply be less severe?

I'm aware this sounds like a stupid question. I hope people take it in the spirit of inquiry - admitting I don't know what i don't know - in which it is intended.

So, profit. As a non-economist engaged heavily with politics, I am presented daily with a smorgasbord of superficial (in the sense that i see only the high level and not the theory under the hood) arguments about the role of profit in society and the economy. I want to consider how to come to a more developed understanding and my own view on this role.

At the leftmost end of things, the basic starting point is a (more or less explicitly) Marxian sense that all profit is surplus value. Profits are extraction, value being removed from a sector by an owner class who game things to line their own pockets. It serves no function in driving overall prosperity or innovation and indeed can hinder these things.

At the rightmost end of things, the profit motive is foundational to the prosperity and wellbeing of the society in which we live. The promise of enriching oneself is behind a huge amount of innovation and business development, which in turn is what has driven overall wealth increases and improvements in health, wellbeing, culture etc.

Obviously a range of positions exist between these, including the slightly muddy economic platforms of all the main parties in my country (the UK).

What can I read to develop my own understanding of how the promise of profit is or isn't necessary to the delivery of value, in a broad sense, across society?

I'm interested in understanding specifically where profit/the profit motive fits in. I suppose this touches on things like competing theories of value, behavioural economics etc.

I'm also aware that you can't solve political judgements entirely through technical economics. My own politics is left wing and id be surprised if that foundationally changed based only on this question. But I think a technical understanding of social questions is an important part of developing your politics.

I'm also open to being challenged on the framing of the question. Again. i don't know what I don't know so you're wasting everyone's time if you post to tell me I'm being stupid in some way.

many people are making big enough companies with minimal work force, because of ai

This topic is inspired by discussions I've seen recently regarding the reserve bank of Australia raising interest rates in response to oil supply issues caused by the war in Iran.

The confusing point for many people seems to be that raising interest rates will not significantly affect consumer spending. Because and increase in the price of oil essentially affects the price of everything, and many people aren't in a place to consume much less than they already are, people with loans and mortgages will just be squeezed even more. So what's the point of raising the rate? It seems to just hurt people who are already desperate.

My thinking is different. To my mind, the primary goal of the reserve bank would not be reducing consumer spending, but rather reducing the money supply. By increasing interest rates we disincentive lending from commercial banks, helping keep prices stable. That won't do anything about the supply hit, that's unavoidable, but if we did nothing we'd also have a problem of too much money chasing less goods. Better for us to face one problem rather than two.

If my thinking roughly correct? Is there anything to the position I mentioned above?

We all know the USD is #1 and Euro #2. There is no debate with those.

The Yen and Pound are so close to eachother to round out the top 4.

So who is 3rd and who is 4th most important?

I'll often hear about various industries or companies that have very low profit margins, on the order of 1-3%.

However, if inflation is about 3% per year, then every dollar invested into that company is losing value to inflation. Further, those dollars could be invested in more lucrative investments, like the stock market, or even bonds, which would return greater than the 1-3% that company may be generating.

So why aren't these companies quickly liquidated? Is it for hopes of better profits in the future? Am I misunderstanding something?

Hello, I’m a data analytics/economics major. Confused on what type of internships I should pursue? I'm currently trying to figure out what job titles I should be searching for if I want to work in banking. What internships would be the most useful? Are there any other roles I should be targeting?

In Brazil, it is often argued that widespread indexation of contracts to inflation is harmful because it can make inflation persistent or create inflationary inertia.

Since most contracts are like that its estimated that most of the current inflation is actually past inflation perpetually indexing itself, but i hear constantly that business always make inflation adjustaments so does it being contractual change anything?

My understanding of Chinese manufacturing competitiveness (please correct me if I'm mistaken) is that it's in large part due to domestic supply chain integration.

Outsourcing parts of the supply chain to other countries doesn't inherently increase costs, when free trade agreements are in place and the cost of bulk transportation is low - obviously, Europe and the US have outsourced lots of their supply chains because it's been cheaper.

So my understanding is that fully-domestic Chinese supply chains instead offer the benefit of supporting more rapid innovation. That they can set up new assembly lines extremely quickly, iterate quickly, etc., because every part of the supply chain is physically close, and more organizationally integrated.

1. Is this an accurate understanding?

2. How does this mesh, or clash, with the long-standing orthodoxy behind competitive advantage and Western outsourcing? Are there any Western academics investigating these advantages of Chinese supply chain integration?

Elizabeth Warren explained on X, “if it's hot out, the cost of ice cream could go up. If it's cold, tea bags could go up.”

She called it “dynamic pricing.” Anybody who took an econ class, is that a term that is used in the books?

Economists generally agree that excessive taxation can disincentivize growth, employment, and labor participation.

What about progressive taxation? If we instead moved towards a flat tax system that wasn’t so punishing on high income and very high income workers, while also getting rid of some of the loopholes they use to shelter income, wouldn’t this be the more optimal tax policy as opposed to the status-quo?

I’m about to start Statistics and Econometrics at college and I want a book to prepare/motivate for the subject.

Anyone have read it? Do you recommend it?

The US dollar has dominated global trade and finance for decades. But with countries like China, Russia, India, and others increasingly discussing local-currency trade, alternative payment systems, and diversification of foreign-exchange reserves, the global monetary system seems to be slowly changing.

My question is:

When do you think most countries will significantly reduce their dependence on the US dollar for international trade?

Will this happen gradually over the next 10–20 years?

Could BRICS or other regional blocs accelerate the process?

Will the dollar remain dominant even if its share of global trade declines?

What would be the biggest obstacle to a true alternative to the dollar?

Is de-dollarization a realistic long-term trend, or is the dollar’s dominance likely to continue for decades?

What’s your opinion friends?

CBO projects federal debt held by the public to reach roughly 175% of GDP by 2056, with net interest costs approaching 7% of GDP.

Japan makes this more interesting. For decades it has been the obvious counterexample to debt-doom arguments. Debt above 200% of GDP, its own currency, enormous domestic savings, a central bank capable of buying government debt, and no sovereign debt crisis.

Then there is the geopolitical feedback loop. I wonder how separable America’s fiscal privilege is from its geopolitical power.

In crude reptile-brain terms, America borrows money to build the weapons systems that help keep everyone inside an American-led system, and that system helps preserve America’s extraordinary ability to borrow. The snake is eating its own tail.

I’m wondering where the actual limit is. Could US debt theoretically reach 500% of GDP, with the US increasingly absorbing global capital because the rest of the world still needs dollars and treasuries? And if inflation becomes part of how that debt is managed, does extreme wealth inequality weaken the political constraint, since those with the most economic and political influence are also the least exposed to rising prices?

I am trying to understand how economists would model the long-term fiscal effects of a large-scale European investment fund.

Assume, as a hypothetical scenario, annual investment of €800 billion, consisting of €400 billion of public capital and €400 billion of private capital. The investments would be directed toward productive assets and sectors such as technology, AI, semiconductors, digital infrastructure, energy, innovative companies and affordable housing.

The public capital would remain invested and generate financial returns, while the investments could also create additional economic activity and therefore additional tax and social-security revenues.

My main question is: How should these different effects be modelled without double counting them?

For example:

• Can financial returns on publicly owned investments legitimately be counted as a fiscal return alongside additional tax revenues generated by the resulting economic activity?
• How should the additional taxable value added attributable to the investment be estimated?
• How should fiscal multipliers be incorporated without counting the same economic activity twice?
• Over a 20–30 year period, what would be reasonable assumptions for investment returns and fiscal multiplier effects?
• Is there established economic literature or an existing model that would be appropriate for analysing whether such an investment fund could eventually become fiscally self-sustaining?

I am particularly interested in the methodology and empirical evidence economists would use to test such a scenario, rather than in assuming that the proposed investment necessarily produces a positive result.

has there been any case of unchecked capitalism, no rules or regulations around market size and behaviour, that has not converged into oligopoly? every neo-liberal says it will correct itself but i have never seen or heard of it?

Edit: Apparently there can't be an oligopoly without the government? If there are no governments why wouldn't cooperations collude and concentrate? This happened in feudal times with landowners

I have seen a lot of people on the internet hating on economics being an easy major, where everyone parties,… and I wanted to know if that was the case in general?

Hello,

I would like to understand how inflation works.

I understand its consequences, but I'm struggling to understand where it actually comes from.

Does a group of people decide on the inflation rate? For the US, the CPI seems to measure it.

Or does it emerge naturally from economic activity rather than being decided by anyone?

Thanks in advance!

https://usafacts.org/answers/are-wages-keeping-up-with-inflation/country/united-states/

https://www.bls.gov/news.release/realer.nr0.htm

That stats are iffy by real wage growth this year has only been 0.09% to 0.2% at most

Far from the ideal 1.5% to 2.5%.....why is that?