Quote:
Originally Posted by Greedy,Greedy,Greedy
Part of why the tax cuts have such a modest economic impact is that they went to the affluent, who spend them in ways with minimal multipliers.
If the money goes to the minimum wage worker, they buy food and rent housing with it. If it goes to union labor, they buy houses, cars, and education. If it goes to the wealthy, it's pretty much going to some variation on hookers and blow.
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Hookers and blow have a multiplier too. Probably a relatively high one as they're probably spending their money (at least the hookers and low level dealers).
The typical low multiplier issue is someone who already has enough to consume what they want will save/invest instead of consume. That can be good for the stock market and stimulative in a high rate environment or to the extent the issue is a lack of funds to borrow for investment, but it does nothing for a demand problem.
