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Comment by ams6110 | Hacker News Reader

What does a billionaire do after buying a $90M apartment in Manhattan? Remodel it of course. Lots for work for carpenters, electricians, plumbers, interior decorators, and all the people that support and supply them. I don't see this as a bad thing; it's a good thing.

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Yes, that is a good thing. The bad part is that they aren't using the other 99.99..% of their wealth, essentially taking everyone else's labor and ending the cycle of trade that would otherwise help keep an economy going.

And that's not to mention broader macroeconomic issues which are more worthy of essays than HN comments.

They're not stuffing that money under their mattresses. The vast majority of this money is invested in other businesses in one way or another, whether directly in stocks and shares or indirectly through a bank.

Of course. But compared to actually spending money directly on goods that are produced by the average person, they may as well be stuffing it under their mattress.

99.99% where did you get the figure from? So you expect Gates to sell his shares in Microsoft, Bezos in Amazon and Musk in Tesla? Aren't they already using 100% of their money? What am I missing here?

Thanks to less than 100% reserve requirements on banks, the money the rich keep in American banks is theoretically reinvested through loans back to various enterprises.

The problem arises when the banks don't lend the money and just sit on it... or when companies like Apple siton their huge cash reserves...

To fix this we must boost aggregate DEMAND. Investors and banks give money to businesses when they see demand.

Apple has no cash reserves in cash. Even bank deposits are invested back into the economy.

Right, the real issue is with the lenders. I would argue that giving money directly to the people so they can send price signals back into the economy -- via Basic Income or a Negative Tax -- is much more effective at increasing aggregate demand.

Boosting aggregate demand will not solve the unemployment issue when you consider that one person with automation can produce enough goods to satisfy the demand more than one person.

Right - automation presents a big and growing challenge to the structure of the economy

But redistributing money to people on the bottom to give them safety nets (and allow them to do things like re-educate themselves for some other career) as well as spend it back into the economy is a way to keep them from going completely bankrupt. When a company goes bankrupt, it's one thing. When a human does, it often results in starvation and homelessness.

Exactly. The money these billionaires have doesn't magically disappear from circulation (perhaps they keep it under their bed?). They spend and invest it.

And, give it a generation or three or four, and their kids will have blown it all, having grown up thinking $90M apartments are their expected standard of living, and be back to working at McDonalds.

You can apply the same argument to redistributing wealth to the poor. They don't keep it under their bed but spend it. Except the money multiplier is way bigger in the case of the poor, because they:

1) Spend more of their money on what they really NEED, sending price signals into the economy for basics the majority of people need, vs say golden toilets

2) Spend faster and more of their money on themselves PERIOD because their basic needs take up a greater proportion of their money than for rich people

But anyway we need to balance the wealth transfer one way of the other. This is accomplished with safety nets and progressive taxation.

I love tricke down economics and trickle down economics culture in general.

If there's "lots of work" for all of those people to support and supply the newly wealthy, why are the wages and employment rates of people who aren't wealthy going down?

Automation and outsourcing

And what does a billionaire do after buying a $90M apartment in Dubai?

How does it help the USA working class when billionaires channel their money overseas

"What does a billionaire do after buying"

True and people conveniently ignore that the money not given to the government in taxes buys goods and makes investments which create jobs.

There is an entire economy built around the wealthy spending boatloads of money on luxury goods, cars, 2nd and 3rd homes, vacations, renovations and the like.

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