Quote:
Originally Posted by woj
Consider the following 2 scenarios, which show the difference between "investing" and "spending":
some sophisticated person gets a $100k tax refund... figures: "oh cool, lets build a nice house with it".... takes $100k, borrows $400k... spends $500k to build a house... so with a $100k tax refund.... $500k is getting injected into the US economy + 100s of jobs get created along with it... US now has a nice house built, which will be enjoyed by someone in the US for generations...
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yes absolutely, he would be spending 500K on building material and services etc...this is a scenario where he actually builds something, this is great you will get no dispute from me...
on the other hand when he buys something already built, and new houses are a small fraction of total house buys, the situation is completely different...he will borrow 500K from the bank and return 500K to the bank...
also rich people have only a small fraction of their wealth in houses and most in stocks and these are "protected" either offshore in tax havens or by means of loop holes in the law because they can afford lawyers and advisors etc...
even if the money was not protected, and taxed, very little would trickle down...bill gates money will trickle down but the vast majority will keep their cash working for them, offshore...
you would do the same...so would I...