Conversation

Aella
@Aella_Girl
"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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Wrenn and Lost in the Sauce
@smirabitoMtg
Replying to
@Aella_Girl
I’m having a hard time relating to this tweet because my intuition is the opposite. Once people have acquired money, they tend to be very risk averse and reluctant to let it go. It’s much harder psychologically-speaking to let go of money once you have it.
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James Barton
@james_barton
Replying to
@Aella_Girl
and
@smirabitoMtg
Depends what you mean by invested. If it’s buying equities on an exchange, I can’t see how it produces much real economic output versus consuming. OTOH, angel investment might produce a lot of economic activity in the future.
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Wrenn and Lost in the Sauce
@smirabitoMtg
Replying to
@Aella_Girl
This might be a bigger question than what we can effectively talk about over Twitter. I don’t think I’m doing a good job of expressing my thoughts. But do you think that trickle-down is effective? Do you disagree with what people say about it?
Abraham Castro
@aberca_27
Replying to
@Aella_Girl
and
@smirabitoMtg
Yes, they reinvest it in other stocks, bonds, options, or futures markets etc. they don’t necessarily open businesses or anything else. Stocks don’t affect how much money a business has unless it’s the primary market, most stocks are secondary markets.
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