Comment by gremlinsinc | Hacker News Reader

Comment by gremlinsinc | Hacker News Reader

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Am I understanding -- you're saying it's better for money to sit in an investment account, than spend it on goods/services locally -- thus applying it to local economies? Money doesn't do anyone but the holder any good sitting in an offshore account and even then it's really not doing them any good... do they really need it if it's not being used for something important/worthwhile..literally just collecting dust (and dividends?)....

The real fuel of the economy is money being spent on Apple products, walmart, amazon, --hell even yachts/airplanes (somebody has to build those)..

To fight income inequality, I think we need to tax at the point of investment.. --if you buy anything you're taxed on it..this includes investments/stocks/bonds/etc... just flat consumption taxes... give a UBI to offset the poorer folks...

But have a mandatory flat tax...do away w/ the IRS/income tax. If you're not a U.S. citizen and not getting UBI sorry--but you're sales tax will not be subsidized by UBI--and if you're here illegally/unpapered -- you're now a tax payer congrats we can stop trying to deport everyone since now we make more tax money off of them!

Chicken or the egg? It seems equally intuitive that investment drives the economy. Investment gives companies capital, capital to spend on employees and services or products from other companies (which in turn spend it on employees or other companies). In this way, money makes it way into the pockets of consumers who then spend it on products and services, and the endless cycle of economic activity continues.

But I'm not an economist and am somewhat skeptical of macro-economics in general, which seems a bit like reading tea leaves.

Even if you if you don't buy into supply side economics, I think "Money doesn't do anyone but the holder any good sitting in an offshore account" is somewhat misleading. Savers and investors, through loans and capital, certainly help someone.

It seems equally intuitive that investment drives the economy.

The economic principle you're looking for is "velocity of money". If you think of a GDP in terms of a multiplier in how often/fast money circulates, then you can analyze whether investment or spending is more important.

The second economic principle to look into after that is "marginal propensity to consume".

Investment gives companies capital

The vast majority of money people invest doesn't go into giving companies capital, though.

It goes into people selling pieces of companies to each other. The very first time the share was bought, the company got some capital, and the vast majority of money people invest is not going into initial purchases of shares.

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