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Finance & Stock Groups Forum Index » Stock Investments » Concentration of wealth prevents the multiplier of money eff
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| 2.7182818284590... |
 Posted: Thu Jul 30, 2009 4:15 am |
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Guest
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Concentration of wealth prevents the multiplier of money effect
First of all, the multiplier effect: "In economics, the multiplier
effect or spending multiplier is the idea that an initial amount of
spending (usually by the government) leads to increased consumption
spending and so results in an increase in national income greater than
the initial amount of spending. In other words, an initial change in
aggregate demand causes a change in aggregate output for the economy
that is a multiple of the initial change."
So if wealth is very concentrated in the hands of a few, this prevents
the spending/utlilization of this money, and this money is prevented
from multiplying the economy.
On the other hand, if everyone had a more equal distribution of money,
than more of this money would get liberated and multiplied into the
economy.
What do you think? |
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| zzbunker@netscape.net |
| Posted: Thu Jul 30, 2009 7:41 am |
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On Jul 30, 12:15 am, "2.7182818284590..." <tangent1...@gmail.com>
wrote:
Quote: Concentration of wealth prevents the multiplier of money effect
First of all, the multiplier effect: "In economics, the multiplier
effect or spending multiplier is the idea that an initial amount of
spending (usually by the government) leads to increased consumption
spending and so results in an increase in national income greater than
the initial amount of spending. In other words, an initial change in
aggregate demand causes a change in aggregate output for the economy
that is a multiple of the initial change."
So if wealth is very concentrated in the hands of a few, this prevents
the spending/utlilization of this money, and this money is prevented
from multiplying the economy.
On the other hand, if everyone had a more equal distribution of money,
than more of this money would get liberated and multiplied into the
economy.
What do you think?
Well, one part missing in the theory is that the wealthy tend to
invest in the
slowest changing wealth, rather than just wealth.
Which is also why the 21st Century investors tend to invest in
optical computers,
and Desk Top Publishing, rather than AT&T Stock. And tend to invest
in GPS
and Self-Replicating Machines, rather than GM. And tend to invest
in
Gas Turbine Engines, neo Wind Energy, Biodiesel, Solar Energy, Pv
Cells,
Holograms, Electronic Books, Laser Disks, On-Line Banking, and On-
Line Publishing,
rather than GE.
And tend to invest in UAVs, AAVs, Weather Satellites, HDTV, Fiber
Optics,
and Drones, rather than Exxon. |
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| Rod Speed |
| Posted: Thu Jul 30, 2009 9:42 am |
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Guest
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2.7182818284590... wrote:
Quote: Concentration of wealth prevents the multiplier of money effect
No it doesnt.
Quote: First of all, the multiplier effect: "In economics, the multiplier
effect or spending multiplier is the idea that an initial amount
of spending (usually by the government) leads to increased
consumption spending and so results in an increase in national
income greater than the initial amount of spending. In other words,
an initial change in aggregate demand causes a change in aggregate
output for the economy that is a multiple of the initial change."
So if wealth is very concentrated in the hands of a few,
this prevents the spending/utlilization of this money,
No it doesnt if they choose to spend it on say new business ventures etc.
And much of the real wealth that many claim is becoming increasingly
'concentrated' is actually in the hands of people like Gates and Brin etc
who are extremely wealthy by virtue of having produced a very successful
commercial operation and they end up owning a large part of that venture.
THAT wealth isnt something that spendable in
the economy like the govt spending above is.
Quote: and this money is prevented from multiplying the economy.
It isnt money in that sense.
Quote: On the other hand, if everyone had a more equal distribution of money, than
more of this money would get liberated and multiplied into the economy.
Its much more complicated than that too.
In modern first world economys, a hell of a lot of that 'wealth' that is
what individuals like Gates and Brin have is in fact owned by individuals
in their shareholdings in operations like Microsoft and Google via their
pension funds and 401Ks etc, and that doesnt actually get spent in the
economy any more than Gates' and Brins' 'wealth' does.
I gave up on thinking, it just makes my head hurt. |
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