Depends on how it was earned and invested.

For example assume that a new billionaire is minted by a lottery with 100 million people buying a $10 dollar ticket. Long term it's neutral but in the short term it effectively removes $1B in near term consumption from the economy and spreads it out over 100+ years.

On the other side a million people will likely better invest and sound a thousand dollars than one person will invest one billion.

But the new billionaire doesn't stuff her mattress with ten million hundreds. She buys investments, which go back into the economy. Or she puts cash in the bank, which goes back into the economy....

The money she collected from the lottery ultimately represent a call option on someone's future labor. After the lottery that call option has been handed to a single individual who may never make that call in her lifetime. The effect is similar to the coal mining town's company store where you can only buy what they sell at the price they set.

The effect is to concentrate economic activity in specific sectors where banks are willing to lend which means the economy is less flexible overall.

An economy with $1B of debt and $1B in savings spread over 10,000 people is going to be more diverse and resilient than 9,999 people who have $1B in debt and one person with $1B in savings invested in housing and car loans.

The best outcome would be if she invested in new equity in a company that created a positive ROI in excess of what the lottery ticket buyers would have produced. Anything else is a net negative.

At one point, something like 70% of GDP was consumption. It's less now.

This is fine so long as investments move. We have such a high degree of aggregation of capital now that it sort of doesn't. It's sort of ... pinned down in the light cast by the public markets.

Even mutual finds are just now coming of age, much less the things that were innovations on them.

I started to type out about how those investments need to eventually end up as a product on the shelf (metaphorically, B2B counts) to keep the supply/demand cycle going, but I don't think that's necessarily true. The money should end up as either all salary, or some salary and some product, but the salary gets spent so the supply/demand wheel keeps spinning.

If too much goes to salary than the investment stops making sense and the rich will hoard cash instead, but I don't think we're in that situation. Could that be why QE was pumping so much money into the economy with inflation staying low? I bet there are statistics about the amount of cash people and companies are hoarding now vs 50 years ago, but there's too many confounding variables for me to figure it out.

Even cash deposits are held in banks and (a large fraction of the total held by any bank can be) loaned out into circulation.