Comment on How the Rich Got RichparentComments−justinmk14y> returning wealth into the economy as something other than capital. This would reduce the oversupply of capitalHow does one return capital as something other than capital? And how would that decrease the aggregate supply of capital?−eli_gottlieb14yYou convert capital into ordinary purchasing power by using the money to buy something. This shifts the money from the column labeled "aggregate capital stock" to "aggregate demand for goods and services."−justinmk14yGiving money to consumers doesn't lower the aggregate supply of real capital, it just sends false signals to producers (and consumers).
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> returning wealth into the economy as something other than capital. This would reduce the oversupply of capital
How does one return capital as something other than capital? And how would that decrease the aggregate supply of capital?
You convert capital into ordinary purchasing power by using the money to buy something. This shifts the money from the column labeled "aggregate capital stock" to "aggregate demand for goods and services."
Giving money to consumers doesn't lower the aggregate supply of real capital, it just sends false signals to producers (and consumers).