Open Left

Another Way to Underconsumption

I read recently that massive concentration of wealth in few hands in a society also causes underconsumption. The idea being that 1,000 people spending $100 million would have greater economic impact than 1 person owning that $100 million. I'd never thought of it that way. But it also ties into a post Paul Rosenberg (I believe) did awhile back about the relationship between progressive taxation and economic bubbles. Taxing wealth aggressively is healthy for society, if not the egos of the lucky few who figure out how to hoard that kind of wealth, short of being born into it or marrying it.

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by: TSlavin @ Tue Jan 26, 2010 at 15:37:23 PM CST