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Can you expand on this? Wealthy people may not hit zero on their balance sheets, but isn't investing their capital in corporations a form of spending? That is
by smallgovt 8y ago
Can you expand on this? Wealthy people may not hit zero on their balance sheets, but isn't investing their capital in corporations a form of spending? That is, it enables the corporation to make capital expenditures to produce goods and services that will in turn be purchased. As long as wealthy people continue investing their capital, it should be healthy for the economy?
- camelNotation 8y agoYes, there is a balance that has to be struck between how much of your economy is investment and how much is spending on real goods because they are symbiotic. The problem is that when inequality rises too high, you end up with too much money being invested and those investment returns either slowing down or being artificially accelerated by gaming the market other ways (think the 2008 collapse).