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Politics : American Presidential Politics and foreign affairs
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To: DuckTapeSunroof who wrote (45535)9/6/2010 3:32:41 PM
From: TimF  Read Replies (1) of 71588
 
If that's what you meant than the point was correct, but also rather irrelevant to any policy discussion about stimulus.

Assuming stimulating spending is really what we need (which is a huge leap of an assumption), the fact that the rich spend a smaller percentage of their entire income doesn't indicate that they will spend a smaller percentage of their marginal dollar. The "not rich" are more likely to be struggling with debt right now, give them extra money (or let them keep more of their own money through tax cuts) and they might use it to pay down debt. Those lucky and prudent enough not to have serious debt, still probably feel more uncertainty than very rich people do, so they may see more need for saving the extra money (esp. because we are talking about a relatively prudent group, not too many reckless people right not without a lot of debt). The rich are the group that can afford to spend.
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