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> the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods This is a very strong claim tha
by jasonwatkinspdx 13y ago
> the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods
This is a very strong claim that's difficult to justify by the data. Consumer demand is the largest driver of economic growth. Demand is what ultimately creates jobs. Capital cannot be applied to investment or growth if there is no demand to generate a return.
- nickff 13y agoInvestment creates demand as much as consumption does, they are just different types of demand. Investment creates demand for capital goods, while consumption creates demand demand for corresponding goods.
- jasonwatkinspdx 13y agoThe market for capital goods is dependent upon the ultimate demand for the end goods. The cart most emphatically does not drive the horse, as anyone whose made malinvestment of capital can attribute.