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Spexx, your simplified illustration doesn't work in economics, because it only exists in a bubble, which is never *ever* the case in the real world. This is like physics teachers who simplify by saying "OK, if we don't have any gravity, we have no mass, and also we don't have any friction, NOW how would the items collide?" We could describe how the items would collide, but then put them back in a real world situation and they don't collide that way at all,... and in economics the real world is unavoidable.
I DO disagree, entirely, that "People who have enough and continue to accumulate wealth are part of the reason there's as much poverty as there is." No, to suggest that shows a weak understanding of economics. (And that's not an insult. 99% of people don't understand economics.)
It is almost impossible to accumulate wealth without generating wealth. It is wealth generation that makes an economy powerful, to grow it so the rising tide lifts all boats. It is a faster and better road out of poverty to raise the standard of living so that the poor are in effect richer.
If you reinvest money into a venture, it is creating things. If you invest the money in the market, it is being used by other people to create things. Even if you put money into a simple index fund, that money is in turn being used in the market, in scores of ways that are invisible to the layman. This creation is what builds our modern society. And if you take money out of the economy and put it under a mattress? That would lower prices.
Believe me, or take Econ 101.
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09-18-2007, 04:43 PM
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