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Politics : View from the Center and Left
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To: cosmicforce who wrote (405347)4/13/2019 11:19:28 PM
From: koan1 Recommendation

Recommended By
John Koligman

   of 541380
 
I am proposing taking money from the rich and giving it to the poor. You cannot get the rich to spend more, but the poor spend it all.

And when they spend it the local businesses get more business.

And if the poor can get a little extra they can invest it. Start businesses. Something they cannot do now.

During WWII with full employment people were able to pay of debt and start businesses and it ushered in an economic boom

Krugman tells the story on his blog. And why he is in favor of stimulus.

How about taking 6 coconuts from the guy with ten and give each of the poor guys 3 - lol?

<,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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