Tuesday, June 16, 2015

To help any economy, help the poor


"The idea that increased income inequality makes economies more dynamic has been rejected by an International Monetary Fund study, which shows the widening income gap between rich and poor is bad for growth.
A report by five IMF economists dismissed “trickle-down” economics, and said that if governments wanted to increase the pace of growth they should concentrate on helping the poorest 20% of citizens.
The study – covering advanced, emerging and developing countries – said technological progress, weaker trade unions, globalisation and tax policies that favoured the wealthy had all played their part in making widening inequality 'the defining challenge of our time'."

Strangely, that's what a lot of religious leaders have taught.  it makes sense.  If the rich get all the money, you have a huge castle with all the wealth inside, and everybody else outside just struggling to survive.  If the lower income people get money, they spend it all over the place because they need to buy food, clothing, etc.  and hopefully have some left for a movie or book or something.

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