2 ms·
Consumed money is more stimulative of the economy then money that is invested, because consumed money first circulates 1 or more times, and then is likely inves
by lsiebert 8y ago
Consumed money is more stimulative of the economy then money that is invested, because consumed money first circulates 1 or more times, and then is likely invested as well, whereas directly invested money doesn't circulate before it's invested.
It's like saying that a formula 1 race isn't faster then a car parked on the start line because it ends up at the same place. It ignores the times the car goes around the track.
It also presumes that a choice of an investment is as good as the free market in distributing capital effectively.