Comment by chromacity
4 days ago
That kind of money, even if it goes to a single person, doesn't get taken out of the economy. No one puts it under the mattress. It's invested, so it's basically given to other people in exchange for a promise of equity / future returns.
It might not be the allocation of capital we like, but it doesn't disappear.
Well, there is a financial 'sink' - stockpiles and ammunition or other non-reusable military gear are basically the definition of money 'destroyed'. Their political value is almost non-existent actual money. If any, at all.
> stockpiles and ammunition or other non-reusable military gear are basically the definition of money 'destroyed'
Goods like longer-lasting food, medical supplies or a strategic oil reserve are not wasted. The money that went into supplying them has gone back into the economy, and they serve a more strategic purpose than the market participants could have borne (i.e. societal insurance policies). The same could also be said of military stockpiles, and continuing to buy them sustains a capability that is hard to get back once lost.
Those stockpiles weren’t created by putting money into a shredder and getting ammunition out. They were created by paying for the materials and labor. At that point the government’s money is frozen and stockpiled, but the economy still has the money that was spent.
> No one puts it under the mattress. It's invested, so it's basically given to other people in exchange for a promise of equity / future returns.
You make wealth concentration sound like a good thing somehow. This was publicly collected tax money, that will go on to enrich some already rich douchebag.
How will it go on to enrich someone else?
Invest in a company, collect dividends or capital gains.