So how will cutting the amount of money already poor people have affect local economies then? Reducing the £s going into local shops & service providers?
Trickle down doesn't work because in free markets investment in jobs and increased production only occurs when firms see the potential of profits from increased demand for products and services. Increased demand only happens when consumers have more disposable income. Money tends to trickle up.
They hoard it on the stock market, causing their portfolios to increase in value and stocks to be overpriced. If they hoarded it in "offshore accounts" or any bank accounts it would be better as all banks buy assets like US treasuries with their deposits. This returns funds to circulation.
Comments
Damn it.