Quote:
Originally Posted by Mathgod
This is probably the biggest misconception in this entire thread and probably in our entire society. The "rich being rich doesn't affect you" mindset. Reality is, the rich being rich as they are DOES take money out of everyone else's pocket, in the form of inflation. Their massive wealth cycles through the economy, meaning there's more money chasing around goods & services than their otherwise would be. Taxation is how you take some of that money out of the economy and fight inflation.
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Actually, the opposite is largely true. Additional wealth, in the hands of the poor and the middle class, results in additional spending, or as you described it: more money chasing around goods & services.
Wealth, in the hands of the rich, does not generate spending, it generates investment. We can debate whether this is a net benefit or a net hindrance to the economy, but what it doesn't do is push up the prices of goods and services.
What you may be trying to get at is that more economic activity results in more inflation. This is true, but inflation is well known as the enemy it is, and central banks are very diligent towards keeping it in check.
Yes, if we slowed the economy down, there would be less inflation, but I very much doubt that slowing the economy down would benefit the poor.