Reply To: Space Fountain

[KeithPickering]

Which is why, if you want to increase the money supply, you don’t give it to banks, rich people, or anyone else who won’t spend it. You give it to poor people, who will spend every dime.

Increasing GDP doesn’t require increasing the money supply. It requires increasing spending. In fact, GDP is spending in the real world for real things, from three sources: consumers, government, and businesses. To increase GDP, you need to increase spending in the real economy (i.e., the economy of real things, as opposed to the paper economy, which is where bank accounts, loans, and the stock market live). Basically, anything that moves money from the paper economy into the real economy increases GDP (consumer loans are a good example). And anything that moves money from the real economy into the paper economy will decrease GDP. (Paying back a loan is a good example.)

That’s also why taxing the poor is bad for GDP (the government will spend less of that money in the real economy that the poor person would), while taxing the rich is good for the GDP (the government will spend more of that money in the real economy than the rich person would.)