All economies are built on consumer spending, except possibly North Korea. The more money workers have in their pockets, the better that economy will run. Those workers are consumers, and they don't do that if their weekly wages have stagnated, or they're unemployed.

But there are sometimes cases where consumers have so much "money" that it becomes worthless







http://www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3?op=1

A functioning economy has to have some redistributive elements to be healthy. Anti-trust laws against monopolies and unfair competition, a progressive tax structure, Medicaid, food stamps, unemployment insurance, Medicare, and Social Security are examples of redistribution.

Simply creating money like Zimbabwe did would ultimately have the opposite effect, as rapid inflation itself would act as a form of regressive taxation in a practical sense and throttle economic activity.

However, redistributing money that is currently in the economy, through taxation and jobs programs for instance, would serve the purpose of putting money into the pockets of workers without the threat of inflation that would be the case if the government simply created money and then circulated it a la Zimbabwe or the Weimar Republic.

And imposing an ever-increasing financial burden on the people at the bottom of the totem pole is not a good thing.

I'm all for a more equitable society. That is one reason why I hold the Great Society in such high esteem

BTW Reuters ...you've become a shill for the rich. O yea we can't wait for the crumbs to fall off the tables of the rich ...and be thankful for them.

"prompting them to spend more on everything from home improvements to luxury cars and meals in restaurants, creating jobs in the process"

Oh yea that will help make our country prosperous again like it used to be. What they will be spending money on is personal and property security guards, tall fences and bullet proof windows

are better than no new jobs at all.

Can we expect some of this good fortune to "trickle down" to us? That would be great!

we're hiring a local contractor to do home renovation...


AND paying higher taxes.

Last edited Wed Mar 6, 2013, 02:46 AM - Edit history (1)

and all that offshore money that the "wealthy" and that corporations want to repatriate back into the Stock Market is also contributing to the now seemingly limitless shooting star trajectories of the DOW and the NASDAQ.

The ones that get fleeced? I thought trade volumes were fairly low, indicating hesitancy of real investors. I think the market is totally driven by Fed QE4evr and the hf algos, and that it is an artificial inflation at best. If you see the 1% 'ers withdrAwing from the market, look out for the crash.