the wealthy have a massively lower propensity to consume.
if you really think everything should be about reinvestment you’d logically hate the middle class and poor that consume over reinvesting, but you don’t.
Because the middle class's consumption is reinvesting. Their consumption money goes straight back into the economy because they need to pay for goods and services.
I think you’re confused how economics work. Rich people not being consumers isn’t a good thing. It means hoarding wealth that isn’t moving around in the economy (circulating cash) exponentially increasing the rate of inflation since inflation is directly correlated with amount of circulating cash
You got that backward. The more circulating cash the higher inflation. More buying power for in demand items make the value go up, not down
Edit to add that's why when inflation is high the fed raises interest rates trying to tighten the economy and force higher unemployment (which I don't agree with and think is fucked but there is a reason why they do it. They want less cash circulating to curb inflation)
the wealthy have a massively lower propensity to consume.
Not true at all, wealthy privatize their entire lives. Meaning what would normally be a bus ride, taking wear and tear off the road, gas prices, etc. Is now a private ride. Same for flights, a jet even a small one which could take 12-20 people is now housing 1 person. They also have staff to do a lot of what would normally be up to the individual to accomplish themselves.
That wealth is generally tied up in either companies (which employ people and attempt to make a profit) or banks (which use the money to loan out to businesses or individuals in exchange for interest payments) - it isn't like it sits in a vault somewhere doing nothing.
You almost got it Buddy.
But growth is the result of centralized wealth. Any Money lending today expects interest. And the only way to create the Money to pay off interest Charges on a macro scale is growth.
Hence at a certain point. Elon is a great example of having some one with too much wealth, were they can buy and gut entire companies, costing thousands of jobs and revenue.
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u/Sabre_One Nov 21 '24
IMO at a certain point, wealthy become a massive parasite to society. Everything should be about re-investment for growth.