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Comment by EGreg | Hacker News Reader

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.

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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.

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