The Fed plans to sharply boost unemployment

Re:The Fed plans to sharply boost unemployment by californical on Sunday September 25, 2022 @10:57AM (#32971930)

Not exactly — wealthy people don’t spend most of their money on goods & services, they leave it parked in investments. Reducing a wealthy person’s net worth don’t really affect how much they spend on consumer goods.

A poor or working-class person spends (nearly) all of their money on consumer goods. Give them 10% more money and they try to buy 10% more things.

Restricting money on the wealthy doesn’t reduce demand for GPUs for example, but restricting money on low-middle income people does. That lower demand for consumer goods is how you can slow inflation.

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Re:The Fed plans to sharply boost unemployment by soulofmischief on Sunday September 25, 2022 @11:43AM (#32972427)

Then tax the wealthy and put that money into the hands of people who actually need it.

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Re:The Fed plans to sharply boost unemployment by californical on Sunday September 25, 2022 @11:13PM (#32978946)

Well that causes inflation, was my point, because that money wasn’t (isn’t) being used to compete for consumer goods.

But by redistributing it to lower and middle class, it’s now being spent on consumer goods, increasing demand for the goods, causing inflation.

[ Parent | on HN ]