How to Address the Great Western Revenue Crisis

It is a basic fact of arithmetic that the poorer the individual, the greater the percentage of every dollar they hold that is spent. This is one facet of the basic economic principle known as the "marginal propensity to consume". Despite the intimidating label it is nothing but an expression of a simple, unequivocal fact: by definition the poor have no excess wealth -- and thus each dollar they obtain is spent.

For this reason, we would not want to structure our economies to cause all of those consumption dollars to flow into the hands of the poor. While such policies would be extremely stimulative, they would literally be "too much of a good thing." Of course, if the poor had all the money they would no longer be "poor."

At the opposite extreme we have the wealthy. If the "problem" with the poor is that they spend too much, then you don't need to have the gift of prophesy to be able to predict the problem with the wealthy: they spend too little. As people become wealthier and wealthier, even though their total consumption may continue to increase in absolute terms, the percentage of each new dollar of wealth that they spend steadily declines. They inevitably begin hoarding wealth.

Only those who inhabit the economic middle provide an economy with the optimal blend of savings and consumption. "Not too hot" as when the poor have all the wealth, and "not too cold" like when the wealthy are hoarding all of a society's riches: a true "Goldilocks economy." Again, this conclusion has absolutely nothing to do with ideology. It is merely the other half of the principle of the marginal propensity to consume, and is an accepted part of economic theory in any/every economics textbook ever written. The rich hoard -- it is all simply a function of arithmetic.