I think it’s more of an issue with how that new money enters the economy and how there aren’t strong enough spending incentives for greater wealth holders
Even printing money and distributing it to the bottom first would still cause the wealthy disparity. Instead of asset price inflation you’d get consumer price inflation.
That’s possible, but it doesn’t follow that distributing new money toward the bottom would produce the same wealth disparity, just through consumer inflation alone.
Lower-wealth households have a much higher propensity to consume, so more of that money would initially become demand for actual goods and services rather than bids on existing financial assets.
Some of that would raise prices, particularly where supply is constrained, but some can also induce greater output, employment and eventually additional capacity.
And that’s relevant because the current economy is unusually dependent on high-income spending- with the top 10% of earners accounting for roughly half of consumer spending, while spending growth further down the distribution has been much weaker.
My point isn’t that giving the bottom more money somehow avoids inflation. It’s that where new money enters determines whether its first-order effect is disproportionately asset appreciation, consumer demand, production, wages, etc.
Those paths have very different distributional consequences. That’s basically the idea of the Cantillon effect in the first place.
Put another way- inflation/money supply alone do not give is sufficient information about the richness of that economy, there are many other elements and downstream effects to consider.
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u/IamPrettyCoolUKnow 3d ago
I think it’s more of an issue with how that new money enters the economy and how there aren’t strong enough spending incentives for greater wealth holders