idiggory, King of Bards wrote:
Except that your arguments are never grounded in any kind of reliable information.
And you're the grand arbiter of what is and isn't "reliable information"?
What stimulates the economy? Spending.
Nope. An increase in the exchange of the fruits of one person's labors for the fruits of another. You've made the mistake of thinking that it's the dollars that matter. If you understood economic theory better, you'd see why this is wrong.
Who are the main purchasers of commodities? The lower two classes.
That really depends on how you define "commodities". You're looking only at "consumables", in which case your statement is true. But that's not even close to the entire range of things which can be bought and sold and certainly is not the only sole driver of economic growth.
How much of their income do they put back into the economy? Almost all of it.
I'm not sure how this is relevant, but sure.
Who benefits from this spending? Businesses. A larger market means support for larger business models, which creates more jobs. Which brings more wealth to the lower classes, which leads to more spending. Etc.
Sure. I can flip this around though:
What stimulates the economy?: Production of goods which others may buy.
Who are the main producers of those goods?: The wealthy and business owners.
How much of their earnings do they put back into the economy?: Almost all of it.
What you fail to grasp is that both sides of that equation are equally important
. You are proposing to reduce the money being used to produce goods in order to increase the amount of money being used to buy goods. Surely you can see how that isn't going to work very well.
The wealthy don't spend. Well, they do. They spend a lot. But the percentage of their income that they spend is vastly lower than what the lower classes do.
You are confusing "spending" with "consuming". They are not the same thing and it would help your understanding of macro economics if you stop treating them as though they are.
So each dollar of wealth that the lower classes have is intrinsically more valuable for the economy.
No, it's not. Let me ask you a question which should illustrate why: What determines the value of the dollar you have to spend compared to the cost of the goods you want to spend it on? You're missing a whole half of the economic equation.
The wealthy have a really annoying tendency to let their wealth sit in a bank account, in bonds, annuities, etc. This means that their money goes to banks, insurance companies, etc. And these are the sorts of investments that aren't going to create a large number of jobs or stimulate markets (especially when it comes to annuities).
The fact that you think that money just "sits" anywhere is where you go horribly wrong (well, more wrong than you already were). That money is invested in ways which result in increased production and increased jobs. Where do you think the money people use to buy things comes from? Where do you think the jobs they get the money from come from? Small businesses take out loans to start or grow their businesses and they hire people. Big business does this constantly.
The large amounts of wealth that you think are idle because it's not being spent in a grocery store is what makes that grocery store have shelves full of food for you to buy in the first place. That's the "supply side" of the equation. I know that liberals work hard to pretend it doesn't exist, but you've brought this to a whole new level.
It's really not all that hard to understand the basic structures that lead to one system's failure compared to the other.
Of course it's not. If you take all the money being used to make things and give it to people so they can buy things, your economy will collapse instantly and most of your people will starve to death. I'm not even arguing that some demand side initiatives can't have value depending on the specifics of the economic conditions. But your argument rests on an assumption that the only thing that matters is how much money people have to spend on consumable items. That's just absurd. There's a balance there. If you can't acknowledge any value to money being held in the hands of the wealthy, then you are essentially arguing for a completely untenable economic agenda.
Kinda exactly like the OWS folks. Edited, Oct 25th 2011 7:30pm by gbaji