heyheyrich:This is actually a fascinating concept called the marginal propensity of consumption. I
heyheyrich: This is actually a fascinating concept called the marginal propensity of consumption. It BASICALLY means that each additional dollar to a poor person (Like someone on minimum wage) is comparatively more valuable than each additional dollar to a wealthy person (like a millionaire or billionaire) because the poor person is more likely to go spend it on a good or service whereas the wealthy person will stick it in an offshore account. With the poor person, it will continue changing hands within the economy and get spent more often, leading to higher economic output. The wealthy person takes that dollar out of the economy by sticking it in a bank account to grow their wealth, and the dollar effectively becomes useless and stops changing hands. -- source link