The economy, credit and trickle-down economics (The Ripple Effect)

The economy, credit and trickle-down economics (The Ripple Effect)

When people spend money, someone is affected. If you spend a dollar or a million, spending money creates cash flow, cash flow creates jobs. The economy is driven by the exchange of goods and services and the movement of money. Even if money is a product, when credit is too expensive in the form of higher rates and fees, consumer spending is limited, especially for larger purchases. The current credit crisis is an example of this. When consumer choice is limited because credit is not available for larger purchases, this can have a detrimental effect on all types of businesses associated with these products. When business succeeds, we all win. A particular business may need a supplier or freight forwarder, a printing company, or any number of other business services. All of these businesses benefit, as do their employees and the local economy where those businesses are located. An example of this is a company with 250 or 500 or any number of employees in Anytown USA. When these employees go to lunch, buy gas for their car, shop at local stores near work, etc., it has a positive impact on the local economy. Spending money is critical to stimulating the economy, which is why every news station in the country reports holiday sales figures at the end of the year. Because it affects any business that manufactures, ships, sells, repairs, cleans, installs or advertises these products. If businesses don’t make enough profits they lay off workers, fewer workers means less money spent and in turn more jobs lost. Many different types of businesses rely on each other for survival. Let’s say a very large company does business with several hundred other businesses, such as Wal-Mart or General Motors. Now think about all those employees and all the different products and services they spend their money on. This can only do good things for the economy, but if any large part of the cash flow stops, big problems can arise, just like the problems our economy is facing now.

Now let’s look at the rich and their effect on trickle down. If a person, rich or poor, or anyone in between, spends money, someone benefits, but let’s look at it from the top down. Some wealthy people own their own business or multiple businesses and employ employees xnumber of people. These employees pay taxes and spend money on all the necessary living expenses and someone else earns their income from that money. Also, this rich person may own a home or two or three, and when he buys a home or a car, he exchanges money, pays more taxes and earns income and so on. What about the maintenance of his house and cars? Painting, roofing, cleaning carpets and floors, housekeeping and auto mechanic, car wash, tires. The list goes on and on, so I really don’t think anyone should be upset when the rich get richer because they are most likely spending more than that and having a positive financial impact. All the companies that help maintain their holdings and those people who work for them receive benefits and in turn employ others who also spend money and pay taxes. So the rich person automatically redistributes wealth every time he spends money. Creating wealth is why most people have jobs in the first place. Companies don’t start from nothing, they are created and run by people, and if they are successful companies, someone may have become rich because of it. That wealth gets spent and maybe that rich person decides to start another company or let someone else start their own business and the trickle down cycle starts all over again, so thank some rich person that you even have a job. All the places where you spend your money, someone makes money and you keep a job and a business. The economy works well when we spend money, the more we spend the more everyone earns. A TRICKLE DOWN TRICKS DOWN. It is an economic fact that even as the rich get richer and the poor poorer, money continues to flow from the top down. If an area has businesses, it has employees who spend money on food, housing, transportation, entertainment, and many other things. So consider the benefits of having a big business improve the income for many other smaller businesses nearby. Many businesses do business with each other and this improves the economic situation for everyone, so spend some money.

#economy #credit #trickledown #economics #Ripple #Effect

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