Home Budget, Economy Who Benefits If The Rich Or The Poor Spend More Money?

Who Benefits If The Rich Or The Poor Spend More Money?

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Matt Yglesias presents this chart of what very high-income people and very low-income people tend to spend more of their money on compared to their fellow Americans. This seems a very good lens through which to view the comparative effects of GOP economic stimulus ideas versus Democratic economic stimulus ideas.

Think of how many people are employed in your community working for car & truck dealerships, destination hotels, working at high-end theaters & sporting events, and selling expensive rugs. Probably not a very large group. These are the people who’ll be helped by keeping the Bush tax cuts for the wealthy.

Now think of all the people in your community who work selling food, from grocery stores to farms to 7-Elevens to local diners. Those are the people who’ll see their jobs sustained by things like extending unemployment insurance and keeping our social safety net strong.

If you’re a Persian rug importer, I can understand where you’d be leaning towards tax cuts for the rich. But for the rest of our communities,  Democratic economic policies would deliver a much bigger boost.

  • Redjek

    ….would in turn spend the money they earned from selling to the top quintile.  And “The Big Three” auto manufacturers support more than 1 in 10 workers, according to the New York Times.  How many more, when the domestic manufacturing of Toyotas, Hondas, and VWs, and BMWs are factored in?

    The hotel industry supports many low-wage workers.  Would you put them out of work, so that you could give them unemployment benefits instead?

    Anyway, aren’t they the Obama tax cuts, now?  Obama extended them with Democratic majorities in both the House and the Senate.  The Democrats could have allowed them to expire, and chose not to.