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Money does sit idle. It's used to hedge against recessions and acquire assets when their price is the lowest. Have you ever heard of liquidity? The whole point
by dumbfoundded 7y ago
Money does sit idle. It's used to hedge against recessions and acquire assets when their price is the lowest. Have you ever heard of liquidity?
The whole point of finance is to maximize returns on investment. One strong strategy is to build liquidity before economic (or industry) downturns to cheaply acquire assets. This idleness happens at a much greater rate for the wealthy than the poor. And by poor, I mean the bottom 90% of society. They don't have the luxury of savings. This means it's of greater value to give them money because they spend it quickly . The economy doesn't grow when companies buy back stock, it grows when someone has enough money to pay for medical treatments or to buy a new car.