How someone got their money is irrelevant, but it's much better for the economy that they spend it, even on garbage, than let it sit in a brokerage account. Every person with a trust fund spending $400k on an Aston Martin is sustaining (not creating) jobs and distributing wealth to some degree.
Generally it isn't - because that tilts the economy towards producing goods and services that are wanted rather than those that are needed. Trickle down has been shown over the last 30 years to be largely a myth.
For example if you have public healthcare and private healthcare and there is a shortage of doctors then the wealthy "crowds out" the public healthcare system by purchasing private healthcare. Essentially they are using their wealth to jump the queue. Like the 'priority queue' at a theme park.
What about the externalities of destruction of the environment due to consumption?
Who has the authority to define what is needed?
Assuming you're in favour of a modern democracy, rather than a technocracy, an epistocracy, or the wild west.
> Assuming you're in favour of a modern democracy, rather than a technocracy, an epistocracy, or the wild west.
This argumentation is pettifoggery.
Very often on the asset side of a foreign central bank which they then use to discount into their own currency (hi China)
I suspect what parent is talking about is the rentier class that has grown substantially in the UK over the last decade. 10% of the population now own at least one rental property.
Also these people need to answer what they think about infrastructure bonds, which is more or less the same as renting a home.
This isn't buying land and building homes, it's about people leveraging their existing housing to out bid people just looking for a home.
This has led to the age of a first time buyer reaching 32 and left many people with a precarious housing situation.
So yes, there is something wrong with it.
Even low and zero interest savings accounts are used by banks to back loans.
So for example, when someone buys gold or bitcoin, they are isolating that money from the productive economy. When they buy a share of a business, they are participating in the financial backing of that business (they generally aren't actually directly contributing to the business, but the business can do some types of business against its value on the stock market).
Only if banks have more lending opportunities than deposits, and that hasn't really been the case, (depending on which country we're discussing) since the crisis.
No. The loans are made out of nothing. Saving is the end of the loan process, not the beginning. That has been made clear by the Bank of England. http://www.bankofengland.co.uk/publications/Documents/quarte...