Thomas Piketty thinks a Bernie Sanders’ Presidency would be good for the U.S. economy. That shouldn’t be surprising to anyone who spends any time actually thinking about it. Because of inequality in this country, a lot of wealth is tied up in stocks and bonds, where it does nothing to stimulate the economy. Now consider if some of that wealth was instead in the hands of the poor and middle class, who have plenty of unmet needs and pent-up willingness to spend. Which scenario would be more beneficial to your business?
This is an excellent point about wealth redistribution and economic stimulus. The argument that concentrated wealth in financial assets doesn’t generate the same multiplier effect as direct spending by those with higher propensity to consume is well-established in economic theory. I’d be curious to see more detailed analysis on the velocity of money differences between these two scenarios.