F&B, I'm going to try this one more time then I need to go to bed.
First, let's agree that money moving through the economy is good for the economy, and money not moving through the economy is not good for the economy. Can we at least agree on that?
So Scrooge McDuck is sitting on a pile of money; he's already bought everything he needs, he pays his staff and employees, continues to run his businesses, yet *still* has enough money to take a refreshing dip:
Donald Duck is having a hard time. He is a single dad of three precocious nephews, and he needs every dollar he can get his hands on. Even more so, the nephews would rather spend than save:
Which dollars are doing more for the economy? The dollars in McDuck's vault are doing nothing for the economy. He's run out of things to spend those dollars on; he can't grow his businesses because demand has stalled. He could buy more stuff for himself, but that quickly becomes redundant and impractical. But, the nephews get some money and they SPEND IT as quickly as they get it. Dollars in their hands are better for the economy than dollars in McDuck's vault.
(notice I've said nothing in this example about taking McDuck's money and giving it to Donald or the nephews. I'm just trying to establish which dollars are more stimulative.)
F&B, you need to move up from Econ 101 to Econ 102. This is pretty basic stuff, and universally acknowledged by economists - but just as universally denounced by ideologically driven right wing hacks. I always like to assume you are not a right wing hack.
Posted on December 16, 2011 - 11:39 PM