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Politics : View from the Center and Left
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To: koan who wrote (405345)4/13/2019 12:24:59 PM
From: cosmicforce1 Recommendation

Recommended By
bentway

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Logically, the only way to increase economic activity is to get the RICH to spend more and to transfer more of their loot to others. Poor people spending more of what little part of the pie they have doesn't make them richer. This is the fallacy of the "velocity of money". Something has to move wealth from the rich to the poor and with low investment and few rich people in small towns there is no where for the wealth to come from.

Image an island where three people had 10 coconuts. One has eight and the other two each have one. Juggling coconuts (i.e increasing the velocity of money) does not increase the number or distribution of coconuts even if done with great speed. This is one of the great fallacies in economic theory - it is a conservation of mass problem. Change the coconuts to dollars or gold coins and the patent stupidity of the Velocity of Money argument is apparent. Increase the number of people or coconuts but don't change the ratio of coconuts to people, nothing changes. If the guy with eight coconuts builds a coconut farm, and shares that with the other two who work it, things change. People with one coconut now have four and the guy with eight has sixteen. He's still rich and they are less poor.
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