Hordini wrote:
Super simplistic explanation, but I believe the root of the idea (whether you believe it or not) is that it's because the rich create businesses which in turn create jobs.
The explanation that I've always seen was basically the super rich are supposed to spend that money on things. These "things" are made by people. And since the people making things need to get paid, they are; And they spend that money.
The problem with the line of reasoning, aside from the fact that we can see repeatedly that the rich simply tend to invest more of their newly acquired wealth into things to get MORE wealth, is that when they do buy things, it tends to be of a nature where not too many people benefit.
The Wealthiest 1% are generally above the standards of a Mercedes-Benz, they need a Morgan, or a Rolls Royce. Their boat/yachts are the uber-expensive hand made cottage industry companies.
This is why a strong middle class is so damn important. The middle class tend to spend more money on stuff, with a tiny fraction going to investments (compared to the wealthy), it's the middle class that buys the boats at Cabela's, the multitudes of TVs, gaming/theater systems, multiple "cheap" or mid range cars. It's the middle class that tend to populate the nation's bars and restaurants on nights when sporting events are going on. In short, the middle class is the one who actually creates the jobs and economy because it tends to spend, not invest.
