When people spend money, someone is affected. Whether 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 money is a commodity, when credit is too expensive in the form of higher rates and fees, consumer spending is constrained, especially for larger purchases. The current credit crisis is an example of this. When consumer options are limited because credit is not available for larger purchases, it can have a devastating effect on all types of businesses related to those products. When the business is successful, we all benefit. A particular business may need a supplier or carrier, a printing company, or any other type of business services. All those businesses benefit, as well as their employees and the local economy where that business is located. An example of this is a company with 250 or 500 or any number of employees in Anytown USA. When those employees go to lunch, they buy gas for their car, shop at local stores near work, etc. It has a positive impact on the local economy. Spending money is extremely important to boosting the economy, which is why every news station in the country reports year-end Christmas sales figures. Because it affects every business that makes, ships, sells, repairs, cleans, installs, or advertises those products. If companies don’t make enough profits, they lay off workers, fewer workers means less money being spent, and in turn, more jobs are lost. Many different types of businesses depend on each other to survive. Let’s say a very large company does business with several hundred other companies, such as Wal-Mart or General Motors. Now think about all those employees and all the various products and services they spend their money on. It can only do good things for the economy, however if a large part of the money flow stops, well, big problems can happen, just like the problems our economy is facing now.
Now let’s take a look at riches and their effect on filtration. If one person, rich or poor or anyone else spends money, someone benefits, but let’s look at it from the top down. Some wealthy person owns her own business or several businesses and employees xnumber of people. Those employees pay taxes and spend money on all the necessary living expenses and someone else gets their income from that money. Also, this rich guy might own a house or two or three, and when he buys a house or a car, money changes hands, more taxes are paid and income is earned, etc. What about the maintenance of your house and cars? Painting, roofing, carpet cleaning and floor care, house and car maintenance, auto mechanics, 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’re more likely to spend more and have a positive financial impact. All businesses that help maintain their assets and those people who work for them receive a profit and in turn employ others who also spend money and pay taxes. So a rich person automatically redistributes wealth every time he spends money. Wealth creation is the reason most people have jobs in the first place. Businesses don’t start from nothing, they are started and run by people, and if they are successful businesses, someone could have gotten rich from it. That wealth gets spent and maybe that rich guy decides to start another company or allow someone else to start their own business and the trickle-down cycle starts all over again, so thank some rich guy for the fact that you even have a job. Everywhere you spend your money, someone is making money and you are keeping a job and a business. The economy works well when we spend money, the more we spend, the more everyone benefits. TRICKLE DOWN DOES TRICKLE DOWN. It is an economic fact, even if the rich get richer and the poor get 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 think about the benefits of large companies improving the revenue of many other smaller companies nearby. Many companies do business with each other and this improves everyone’s financial situation, so go spend some money.