For an economy built on consumer spending this means that you get more economic growth by giving those rich people more money to spend, not by lifting up the other 90%.
You’ve gone and mixed up correlation and causation here.
The top 10% arent spending 50% of the money because they are the glorious saviors of the economy, protecting and nurturing it while us poor people thoughtlessly hoard and save all our wealth. It’s actually quite the opposite.
I’m not saying it’s a good thing. It’s a symptom of the concentration of wealth.
But if you’re a politician and want a quick, popular, short-term solution you get quicker effects giving the big spenders more money. It would be better to lift everyone, but that takes a lot more work.
Which is what’s been happening for decades, and has gotten us into this mess. We’ve been kicking a lot of cans and we’re running out of road.
Except that isn’t true at all. The COVID stimulus checks were a huge boon to the economy and cost about 800 billion dollars, meanwhile just the first round of trump tax cuts are projected to cost the US 1.5trillion. Dollar for dollar, providing spending power to the lower income earners generates more economic stimulus. Talk to someone making less that 200k a year, and there is a laundry list of items they need or want to purchase. Ask a billionaire what they are waiting for the money to buy, and it’s nothing. When you have an unlimited check book, why would you wait?
The whole reason why the top 10% spend 50% of the economy, is because they have 99% of the disposable income. The idea that the poorer 90% of us are hoarding money more than the freaking multi-million/billionaires is laughably out of touch.
Exactly. The only real problem with the covid stimulus was that they were implemented quickly, and that they occurred simultaneously with covid-related supply chain disruptions. That’s why so much inflation happened. You could make that level of stimulus permanent without any inflationary effect as long as you slowly ramped up the stimulus over a decade or so. You wouldn’t want to implement a $20k/year UBI overnight. That would cause huge inflation. But if you slowly ramped it up, that would give time for the production system to slowly expand to meet the need.
You’ve gone and mixed up correlation and causation here.
The top 10% arent spending 50% of the money because they are the glorious saviors of the economy, protecting and nurturing it while us poor people thoughtlessly hoard and save all our wealth. It’s actually quite the opposite.
I’m not saying it’s a good thing. It’s a symptom of the concentration of wealth.
But if you’re a politician and want a quick, popular, short-term solution you get quicker effects giving the big spenders more money. It would be better to lift everyone, but that takes a lot more work.
Which is what’s been happening for decades, and has gotten us into this mess. We’ve been kicking a lot of cans and we’re running out of road.
Except that isn’t true at all. The COVID stimulus checks were a huge boon to the economy and cost about 800 billion dollars, meanwhile just the first round of trump tax cuts are projected to cost the US 1.5trillion. Dollar for dollar, providing spending power to the lower income earners generates more economic stimulus. Talk to someone making less that 200k a year, and there is a laundry list of items they need or want to purchase. Ask a billionaire what they are waiting for the money to buy, and it’s nothing. When you have an unlimited check book, why would you wait?
The whole reason why the top 10% spend 50% of the economy, is because they have 99% of the disposable income. The idea that the poorer 90% of us are hoarding money more than the freaking multi-million/billionaires is laughably out of touch.
Exactly. The only real problem with the covid stimulus was that they were implemented quickly, and that they occurred simultaneously with covid-related supply chain disruptions. That’s why so much inflation happened. You could make that level of stimulus permanent without any inflationary effect as long as you slowly ramped up the stimulus over a decade or so. You wouldn’t want to implement a $20k/year UBI overnight. That would cause huge inflation. But if you slowly ramped it up, that would give time for the production system to slowly expand to meet the need.