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The "hoarding" argument has no economic basis. Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governm

The "hoarding" argument has no economic basis. Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governments.

tomp 13y ago
But someone has to actually spend the money for it to be truly useful (money has to circle through the economy).
pessimizer 13y ago
Under radically different definitions of use, yes. Money is useful as a reserve, but useful isn't the same as use.
lifeguard 13y ago
No it isn't. It is paid out in dividends and bonuses. The ultra-rich also are experts at sheltering their money from government's eye. http://en.wikipedia.org/wiki/Cayman_islands#Taxation http://en.wikipedia.org/wiki/Cayman_islands#Taxation http://en.wikipedia.org/wiki/Tax_haven http://en.wikipedia.org/wiki/Tax_haven Bonus points if you know unemployment benefits are subject to income tax in America.
numbsafari 13y ago
> Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governments. Oh is it? really? In the real world (not the fantasy land of trickle-down economics), money that is saved in stocks, bonds and bank accounts is NOT immediately put to use by companies, banks or governments. Banks have done a terrible job putting the money given to them by the government and the Federal Reserve to work. Small business lending dried up and has taken years to recover, despite all the efforts to convince banks to do otherwise. The government did a notoriously bad job of putting the stimulus spending money to work. As for businesses, hiring has been slow, wages stagnant and investment weak for years, despite an excess of cash (profits). Almost nothing has been done to stimulate demand, much has been done to stimulate supply. So, arguments about "hoarding" have not only economic basis, they have a basis in fact as well. Granted, on those grounds, Sean Parker should be lauded for putting some of his money to work.
- mtowle 13y ago
  >not the fantasy land of trickle-down economics The war on straw wages on
jbooth 13y ago
Next you'll be telling us that a police officer would never lie under oath.
darkarmani 13y ago
> The "hoarding" argument has no economic basis. So all that cash under my grandfather's mattress is being put to use?
cia_plant 13y ago
This is Say's Law, and was believed throughout the 19th century until being vigorously challenged by Keynes in his "General Theory of Employment, Interest and Money". The "General" in the title specifically refers to the fact that the theory goes beyond the "special" conditions in which Say's Law holds. There are still believers in Say's Law but the mainstream economic position is that it is false in general.
kaonashi 13y ago
No, it certainly is not. Loans create deposits when creditworthy borrowers show up and ask for them, and required reserves are obtained afterwards from the cheapest source available.

The "hoarding" argument has no economic basis. Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governments.

tomp 13y ago

But someone has to actually spend the money for it to be truly useful (money has to circle through the economy).

pessimizer 13y ago

Under radically different definitions of use, yes. Money is useful as a reserve, but useful isn't the same as use.

lifeguard 13y ago

No it isn't. It is paid out in dividends and bonuses. The ultra-rich also are experts at sheltering their money from government's eye. http://en.wikipedia.org/wiki/Cayman_islands#Taxation http://en.wikipedia.org/wiki/Cayman_islands#Taxation http://en.wikipedia.org/wiki/Tax_haven http://en.wikipedia.org/wiki/Tax_haven Bonus points if you know unemployment benefits are subject to income tax in America.

numbsafari 13y ago

> Money that is saved in stocks, bonds, or bank accounts is immediately put to use by companies, banks, or governments. Oh is it? really? In the real world (not the fantasy land of trickle-down economics), money that is saved in stocks, bonds and bank accounts is NOT immediately put to use by companies, banks or governments. Banks have done a terrible job putting the money given to them by the government and the Federal Reserve to work. Small business lending dried up and has taken years to recover, despite all the efforts to convince banks to do otherwise. The government did a notoriously bad job of putting the stimulus spending money to work. As for businesses, hiring has been slow, wages stagnant and investment weak for years, despite an excess of cash (profits). Almost nothing has been done to stimulate demand, much has been done to stimulate supply. So, arguments about "hoarding" have not only economic basis, they have a basis in fact as well. Granted, on those grounds, Sean Parker should be lauded for putting some of his money to work.

mtowle 13y ago
>not the fantasy land of trickle-down economics The war on straw wages on

jbooth 13y ago

Next you'll be telling us that a police officer would never lie under oath.

darkarmani 13y ago

> The "hoarding" argument has no economic basis. So all that cash under my grandfather's mattress is being put to use?

cia_plant 13y ago

This is Say's Law, and was believed throughout the 19th century until being vigorously challenged by Keynes in his "General Theory of Employment, Interest and Money". The "General" in the title specifically refers to the fact that the theory goes beyond the "special" conditions in which Say's Law holds. There are still believers in Say's Law but the mainstream economic position is that it is false in general.

kaonashi 13y ago

No, it certainly is not. Loans create deposits when creditworthy borrowers show up and ask for them, and required reserves are obtained afterwards from the cheapest source available.