Quote:
Originally Posted by aceventura3
Investment has long lasting implications, spending does not. One reason job growth is slow is due to unwillingness of people to invest in the future. We are seeing an increase in merger and acquisition activity, which is not what we want. Corporations and "rich" people are sitting on cash, we need tax policy that is predictable so that people feel comfortable putting money to work. Buying TV's and cell phones, etc. does not make for a strong recovery.
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Spending and investing are connected. If people start spending money on consumer goods, inventories drop and they need to be replenished. If the spending grows to a level where demand outstrips supply, what happens? There's market growth and investors want a piece of it.
The trick is to figure out how to get the money moving. Is it easier to get consumers to spend money if you let them keep more of it in a down economy or is it easier to get capitalists to invest money if you let them keep more of it in a down economy?
If you ask me, it's seems easier to get people to spend. It's only when there are opportunities for growth will investors want to invest. It doesn't help to put the cart in front of the ox.