We know its there, but what to do?

A paper in 2001 by G Imbens, B Sacerdote and D Rubin showed that "people tend to spend unexpected windfalls. Looking at lottery winners approximately 10 years after winning showed they saved just 16 cents of every dollar won," wrote JL Zagorsky. People receiving a large inheritance or a windfall "quickly lost half the money through spending or poor investments" and studies have found that "winning the lottery generally didn't help financially distressed people escape their troubles and only postponed the inevitable bankruptcy. One found that a third of lottery winners go bankrupt." A woman named Viv Nicholson is famous in Britain for saying that she would "spend,spend,spend" after her husband won 152,319 pounds in 1961 on football pools. She became an alcoholic, lost all her money and eventually died of dementia. Her life story inspired a play on television and a musical. This goes against teaching of the great Milton Friedman who wrote that people do not increase spending because of a windfall but on expectation of future earnings, called permanent income hypothesis (PIH). The mega-rich use concierge services who arrange any experience, for a fee. One Steve Sims "has arranged everything from a private dinner for six at the feet of Michelangelo's David at the Galleria dell'Academia in Florence, Italy -- with diners serenaded by famed Italian tenor Andrea Bocelli -- to the tours of Titanic via Mir submersibles. But when a potential client asked if he arrange for him to detonate a nuclear warhead, Sims refused." One Middle-Eastern buyer demanded a "24-carat gold and platinum bathtub with 250,000 crystals" at a cost of 10,000 pounds. "The wealthy would probably prefer we stay in the dark about how rich they are," wrote GB Manzon Junior, but it is not just about how much they earn. "Wealth, on the other hand, is an aggregation, affected not only by current income but earnings accumulated in previous years and by previous generations." "How much wealth someone has is also a better measure of their quality of life and opportunities." People have no idea how much money the super-rich really possess. People in Britain and France overestimate the amount of money owned by the rich, while India and Russia tend to underestimate their total wealth. While no one desires absolute equality people want inequality to be less. This may seem as envy, "But resentment of the super-rich is probably not simply envy. It likely has to do with notions of fairness," wrote N Smith. This desire for fairness was promised by communism, with disastrous results as millions died, wrote Prof S Rajagopalan. So many research papers mean that people have no idea as to how bring a dollar billionaire closer to a penniless menial laborer. Perhaps, it is best to let them spend it all. At least the money will circulate.