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I think the Keynesian contention right now is exactly that anyone who has money at this moment is choosing not to invest it in things that will employ people.
by Patient0 14y ago
I think the Keynesian contention right now is exactly that anyone who has money at this moment is choosing not to invest it in things that will employ people.
That is, despite record low interest rates, most people and corporations who have money are in fact choosing to "keep it under the mattress", refusing to invest it. There are lots of companies out there sitting on mountains of cash, not spending it.
Of course, they're not literally keeping it under the mattress. They instead keep it in extremely low yielding US treasuries, which is the economic equivalent. Now, if the government was to invest this money which they are able to borrow so cheaply, that might change things... This would be the "fiscal stimulus" that many Keynesian economists are advocating until employment and/or inflation both go up.
Of course this is not in itself an argument for increased taxation on the rich. That's an orthogonal issue, IMHO.