A tale of two billion dollars

A monetary story

Let’s do an experiment. First we’ll hand out bundles of 500 one hundred dollar bills to wealthy couples who own expensive homes and drive expensive cars. We’ll do this until a  billion dollars is spent. 20,000 wealthy couples will have been given fifty grand as gifts – gratis.

Next we’ll do it all again but this time we’ll target a different class of people.

This time we’ll visit any area that has been hardest hit by poverty, unemployment, off-shoring of jobs, etc. We’ll search out mothers and or fathers with a child or two in tow. If they live near the poverty level we’ll hand them $1,000 without a blink. One billion dollars gifted out in $1,000 increments. A million recipients.

Six months pass. We call a random 100 of the wealthy couples. We ask them how much, if any, of the money is remaining. We find out that in nearly every case, the money had been invested in some brokerage or investment account. They’d taken the gift and saved it.

We next called 1000 of the poor families that we’d given $1,000. Again we ask how much, if any, of the original gift remained. We find that rarely was any of the money was left; they’d spent every cent.

In this experiment two billion dollars was injected into the economy. The first billion, that gifted to the rich, was effectively lost, sequestered into bank or investment accounts. That first billion vanished from the economy. Eventually it might return, but for now, gone.

The second billion drove the economy. For the most part every dollar gifted to the poor was returned to the economy by immediately being spent. That billion dollars began to circulate as soon as we walked away from handing it out. Wherever it was spent it invigorated the local economy. That billion dollars had a direct and immediate impact on the economic health of the nation.

Now a rationalization. To the first part we’ll switch out the gifts to the wealthy and replace them with tax breaks, loopholes that are given to the wealthy. To the second let’s just call it what it really is – it’s welfare.

Lesson learned? To stimulate the nation’s economy, to drive the velocity of money to increase the liquidity of commerce should we hand gobs of cash to the rich or support the working, struggling poor??

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4 responses to “A tale of two billion dollars

  • Anony Mole

    “Reports Thom Hartmann in The Crash of 2016. “Just as we learned during the Gilded Age…it’s impossible to build a healthy stable economy on the backs of a few billionaires. That’s because billionaires are not job creators… If vast fortunes are being hoarded in the hands of very few people, who can’t possibly spend that much money in their lifetime, then it’s essentially being wasted. ‘There can never be enough superrich people to power a great economy… The typical billionaire doesn’t buy thousands more pairs of pants or thousands more ties, or thousands more cars than the typical working class American.’”​

    In other words, when high concentrations of wealth accumulate at the top, the economy suffers. The billions that sit in offshore accounts in the Caymans are not funneled back into the U.S. economy. If this money were put in the hands of the lower class, it would be used immediately at malls, grocery stores, and car dealerships. When everyone has disposable income, the economy soars. When only the 1% has disposable income, money sits and accumulates, creating dynasties with unparalleled power and influence.

    Put simply: trickle-down economics does not lift all boats. Wealth can only trickle-up.”

    “http://www.samuelcspitale.com/single-post/2015/12/30/GOODBYE-MIDDLE-CLASS-Part-16-Recap-and-Conclusion”

  • Anony Mole

    https://www.netflix.com/watch/80083790 Noam Chomsky’s Requiem for the America Dream.

  • Elena Blue

    Thanks again!!

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