re: #277 Fat Bastard Vegetarian

Who ends up with the thousand dollars?

Generally it tends to recirculate. There are several economic models for that. Plus there are some studies that try to track it (using sampled processes).

Here’s a simplistic comparison. Assume two classes, P(oor) and R(ich). Assume P saves zero, and when he spends 100% goes to R. Assume R saves (S) 50%, 25% goes to P, 25% goes to R. We’re giving $1,000 (available, we’ll call this A) and what we want to measure is total money movement (M).
First version, R gets 1000. A becomes 500, 250 to R, 250 to P. M is 500.
Second iteration, A becomes 375. R sends 125 to S, 62.5 to R, 62.5 to P. P sends 250 to R. 375 is added to M which is now 875. Two iterations is enough.

Second version, P gets 1000. A remains 1000, and 1000 goes to R. M is now 1000.
Second iteration looks like the first iteration of the first version leaving us with an M of 1500.

Reality vs the model includes the facts that there are more than two groups, and that a portion of P’s expenditures would go back to the P. These complexities do not change what the model demonstrates: give it to the poor and more money moves through the system over any given time segment.

The model incidentally shows that a mechanism to strip money from S and send it back to P increases money circulation.

Money in savings stagnates. It must move to generate a healthy economy. (balance point: too much movement is bad in its own way. However it’s a far less common problem)