Investing Money Doesn't Take It "Out of Circulation"

Michael Medved

3/8/2011 2:57:14 PM - Michael Medved

Michael Moore won an Oscar for documentary filmmaking but he won’t earn a Nobel Prize in Economics. Addressing union protesters in Madison, Wisconsin he blamed the “uber-rich” for seizing assets from ordinary Americans and taking those funds “out of circulation."

Actually, wealthy people don’t stuff dollars into mattresses—if they want to increase or just maintain their wealth, or hope to live on interest and dividends, they will invest their funds. Money placed in banks, real-estate, companies or the market is hardly “out of circulation” and plays a dynamic role in the economy. Even a filmmaker only gets money for movies when individuals or institutions choose to invest.

Meanwhile, government statistics show the percentage of national income earned by the top 5 percent of taxpayers has remained virtually unchanged for some 20 years, since the beginning of the Clinton era.