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"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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Think about it this way: give 1000 bucks to someone who's a millionaire, what will they do with it? Now give 1000 bucks to someone who's poor, what will they do with it? Which of the two options contributes more to the economy?

Aella

@Aella_Girl

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@ssylvan

The poor person buys stuff, the rich person invests in a company. Both seem great. Both seem more economically efficient than giving the money to the government

11:57 PM · Dec 27, 2019

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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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and

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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and

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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and

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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and

tangential question: what do you think is the most efficient solution to the homelessness epidemic in urban california?

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and

Gov't can be very inefficient of course, but shouldn't overlook that private sector can suffer from inefficiencies (e.g. races to the bottom), for example when markets aren't properly organized. Robert Frank (Cornell) is one economist who's done a lot of work on this.

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and

Person A spending money on themselves will always be more efficient than Person A spending Person B's money on Person C. More moral and less politically corruptable as well.

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and

Why would money given to the government be necessarily less efficient than in the hands of private persons? This is an ideological stance. Read

@MazzucatoM

for instance

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