When the Rich Don’t Spend

Tuesday, January 6, 2009, 7:15 By GSerrano
This news item was posted in Business, Market Trends category and has 0 Comments and so far.




money for use

The world goes haywire, that’s for sure. Money is beneficial in its utilitarian role. It is also meant to be circulated so that an economy can thrive. Problems start when people keep their money, instead of bringing it back into circulation as it should be. But the rich wouldn’t have become so without stashing their money in banks to grow interest on. Thus, the fallibility of economic equality is yet the most factual reality of all. The disparity between the haves and the have-nots is the most palpable social division there is.

Trade is greatly affected when the rich do not spend the cash. Since they are the ones with the biggest expendable incomes, trade and commerce rely heavily on them. Their purchasing power is what oils the merchant machinery. Without purchase, merchants cannot sell. Without sales, producers cannot pursue the creation of goods. A huge part of the world as we know it comes to a halt – all because the rich chose to put their money in investment schemes and retirement funds.

Out of the process of money circulation comes the financial capacity to pay for services. Economies are basically dependent on their services sector. Human capacity in brain and brawn are what most people on earth get paid for and live on. So, if we follow the yellow brick road, we can see that if the rich don’t spend, many people can die of starvation. A little extreme thought but totally possible.

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Via Wall Street Journal

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