Quote:
Originally Posted by danielf
I think Chrysalis means that people on welfare are more likely to spend the money they have, and those being taxed are (slightly) more likely to save some. Hence the example of the distributed £1,000,000.
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exactly.
---------- Post added at 22:01 ---------- Previous post was at 22:00 ----------
Quote:
Originally Posted by Hugh
Not true - savings are used by the banks to fund mortgages and loans.....
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not really, they create that money. Plus not really much loans going out at the moment
I could put another way.
If everyone had just enough to live on, basically they could not 'afford' to save anything. There was no millionaires/billionaires, recessions would be much rarer as money would always be circulating instead of rotting in bank accounts. Inflation would also likely be lower as banks wouldnt be creating money all the time to replace the money in billionaires bank accounts. Its money that works an economy, it has to be circulating and what people dont understand is things like welfare and the public sector is enforcing the circulation. Those jobs eg. in the NHS that people moan about (admin workers) is enforced cirulation to those workers in their pay packet who then will spend that money. They will also pay tax circulating ti back in again and that goes onto welfare claimants who would otherwise be spending nothing. If every welfare claimant was kicked of benefit tommorow the likes of tesco would probably lose 1/4 of their profits over night.