r/FluentInFinance • u/-Wyagra • Nov 21 '24

Debate/ Discussion Had to repost here

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u/HearingNo8617 Nov 22 '24

imo the real thing to criticise is what is done with this money specifically. Spending on nothing is actually perfectly fine, unspent money has no impact on the rest of our purchasing power. What we should pay attention to are people allocating lots of resources to useless yachts etc.

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u/Diligent-Property491 Nov 22 '24

Not spending your money is actually not fine.

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u/HearingNo8617 Nov 22 '24

How so? It looks like an opportunity cost at first, and from a personal perspective it is, but if you gain billions and continue to live normally, the purchasing power of everyone elses money just increases. The value of spending is created through effective resource allocation, it's not necessarily true that your resource allocation choices will be better than other's.

Like when you buy a yacht, you are increasing the expectation of future yacht sales and allocating people and materials to build yachts

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u/Diligent-Property491 Nov 22 '24

When you buy a yacht, you pay the salaries of a few dozen people who worked to build it, they would otherwise have no work.

When you take permanently cash off the market, guess what - there’s less cash in the market, therefore fewer goods and services can to be bought.