"trickle down theory" seems obviously correct to me. Like, if a person has lots of money, it's stupid to sit on it - they invest it, found businesses, hire people, buy things - all of which are putting money back into lower tiers of the economy to me. Am I missing something big?
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The rich person is *much* more likely to just stick it in some passive investment account or leave it in their checking account, even. Rich people do invest, but it's not like every dollar given to a rich person goes to investment. Again, we've tried this. It doesn't work.
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In theory yes. In practice real long term interest rates being near zero means we’re pretty far past diminishing returns of savings rates increases leading to productive investment.
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Interest rates are *really* low, like, at barely ever before seen rates in the scope of human history, that breaks a lot of things https://twitter.com/davidshor/status/1188483810217857024?s=21 …pic.twitter.com/LIf33HJBPK
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Remember, buying a stock other than a share issue isn't investing in the company. It is making a bet that the company will do something that makes the stock price go up. It contributes zero to the economy, or the company, it just parks money somewhere you hope is safe until sell
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Sorry I don’t understand your point. Even if you buy stock in the secondary market, the money is not just sitting there? The $ goes to the person selling the stock (+ commission fees to the brokers etc) both of whom can then invest it in something else, no?
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This seems like the answer you're looking for. When wealthy people have more money they invest it in companies, real estate, etc. When poorer people have more money they invest it in day to day needs via local businesses (plus walmart, etc). Not all investment has equal "quality"
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But deciding what kind of investment is most needed is complex as all these decisions ramify non-obviously, and no two people are likely to agree on what should be invested in. I agree that either case of investment is probably better than centrally-planned investment.
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What reason would a rich person have of investing? Now what about a poor person? The intent matters and may lead to an answer for you. The rich person is likely to invest to gain more wealth, etc. The poor person invests to survive. Trickle down supports wealth, not survival.
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tangential question: what do you think is the most efficient solution to the homelessness epidemic in urban california?
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