Originally Posted by
Bucking Bar
There is also the logic that poor people spend money, while wealthier people save money. Income redistribution has a stimulative effect on consumption.
One of the biggest failings of Keynesian economics in their history (and they have a
lot of failings). They can't comprehend that saving, unless its literally cash under a matress which it hardly ever is, goes directly into fractional reserve banking providing the capital to invest and build the things people consume in the first place and has a
far greater multiplying effect on over all money velocity and activity than one time stimulus or forced consumer spending.
That said, you can't make chicken salad out of chicken poop by focusing on supply or demand side alone, especially when the monetary system it all rides on is built on a house of cards in a hurricane. The system needs a free and open market to correct itself and it hasn't had that in quite some time. With the taxpayers on the hook for another failing stimulus program, corportisim is not only alive and well its on steroids and the "soft landing" is going to put the wheels through the wings when reality finally sets in.