> ...the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy.I did NOT say that. Please don't attack a straw man!
> All of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money).
It's a little more complicated than that. Since the Global Financial Crisis, many central banks around the world, including the Federal Reserve, have been doing EVERYTHING and ANYTHING they can to get banks to lend more, and to get businesses and individuals to borrow more and invest more.
Yet no matter what central banks have tried, individuals and businesses are not yet investing at historical rates, as evidenced by historically high liquidity[1], historically low money velocity[2], and even negative nominal interest rates in some countries[3], which are historically unique.[4] Keynes's argument that depressionary depressions/recessions may be caused by increased 'preference' for liquidity and lack of aggregate demand could actually be right, for all I know.
Meanwhile, the evidence I've seen suggests that redistributionist policies don't seem to have an impact on economic growth. For example, see: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf
So, why not try it, e.g., in the form of UBI or works programs, say, in controlled regional experiments? If it turns out that it works, great; if it doesn't work, then let's try something else.
NOTES:
[1] https://fred.stlouisfed.org/series/AMBNS -- look at that jump in 2008!
[2] https://fred.stlouisfed.org/series/M2V
[3] Example: https://www.reuters.com/article/us-snb-results-banks-idUSKBN...
[4] http://www.businessinsider.com/chart-5000-years-of-interest-...