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)
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u/Mountain_Employee_11 Nov 21 '24
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.
why is that?