# Is the economy set up in a way which doesn't support mass saving? **URL:** \ **Category:** Financial Chat\ **Created:** [6 July 2020 10:36 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803 "2020-07-06T10:36:54Z")\ **Posts on this page:** 17\ **Page:** 2
**Author:** ![StuartL](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/stuartl/32/95229_2.png) [@StuartL](https://community.monzo.com/u/StuartL)\ **Post date:** [6 July 2020 15:48 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/28 "2020-07-06T15:48:11Z")
> [@HoldenCarver](#): > > It’s the millionaires and billionaires who are hoovering up money and not redistributing it. That’s why they should pay more taxes - in order to get their money back into the system. > [@Eden](#): > > That doesn’t make any sense? Paying their employees more gets money back into the system as they can spend and save it. Paying more tax just leaves the government -not the people or the economy- with the money. > > Surely the answer isn’t more tax but better wages? Can’t it be a little of both? ---
**Author:** ![desu](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/desu/32/57996_2.png) [@desu](https://community.monzo.com/u/desu)\ **Post date:** [6 July 2020 15:49 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/29 "2020-07-06T15:49:12Z")
I worked for a sole trader when those increases where coming in, I got pay rises above the min wage as in the pub business reliable staff are worth that little bit more. They would also have a fit over tax rises and start laying off staff to save money or cutting corners. It’s a very hard balance. ---
**Author:** ![Cameron](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/cameron/32/66723_2.png) [@Cameron](https://community.monzo.com/u/Cameron)\ **Post date:** [6 July 2020 15:54 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/30 "2020-07-06T15:54:25Z")
What do you guys think will happen if you suddenly up the tax on the rich? Most of them will just take their money and leave. The best approach is always wealth creation, get people educated into highly desirable skills, get people into business, invest into better mass transport so people can travel further and faster for work ext. ---
**Author:** ![StuartL](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/stuartl/32/95229_2.png) [@StuartL](https://community.monzo.com/u/StuartL)\ **Post date:** [6 July 2020 16:12 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/32 "2020-07-06T16:12:42Z")
> [@Eden](#): > > The governments job isn’t to take all the money and parent you, it’s to function to the extent that it needs to and no more. Just taxing everyone doesn’t run an economy. To an extent I agree but government jobs and spending is not an insignificant factor when it comes to the economy too. If companies can help the economy by being taxed less and using that money to pay their employees more then surely the same can be said for the government, if they have more money to pay out they that also will help the economy. The governments job isn’t to be my parent their job is to be the country’s caretaker/architect/builder/mechanic/technician/engineer. The governments job is to create the best version of society as possible and that job needs funding; by the people/companies who have benefited the most from said society. ---
**Author:** ![jwd2017](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/jwd2017/32/31956_2.png) [@jwd2017](https://community.monzo.com/u/jwd2017)\ **Post date:** [6 July 2020 16:21 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/33 "2020-07-06T16:21:45Z")
I’d agree that mostly people with enormous wealth seem to re-invest one way or another but I think there are a lot of exceptions. I seem to remember reading something about Apple having huge stockpiles of cash years ago, so much so they were struggling to move it around the globe without incurring massive tax bills. (I might be misremembering that). I definitely get there is a difference between savings and investments, investments being the ones which are ultimately put back into the economy (apart from cash funds). I guess it makes my original question all the more confusing to me, that the economy seems to rely on us spending a lot AND using our/business cash for investments on top of that. Given the sheer amount of money trading hands during the day (our spending), AND investments being made from business/ISAs/Pensions, that people saving 8% of their remaining salary would hardly be worth mentioning yet there seem to be hints that it’s not good for the economy to do that. Edit: I guess the workplace pension was an example of people suddenly investing a lot more of their salary each month but it didn’t come in with a big economic shock. ---
**Author:** ![MalaiseForever](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/malaiseforever/32/123325_2.png) [@MalaiseForever](https://community.monzo.com/u/MalaiseForever)\ **Post date:** [6 July 2020 16:28 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/34 "2020-07-06T16:28:29Z")
> [@Cameron](#): > > Sadly this almost always has the opposite effect in the economy, companies will just hire less or even let people go. > > Less hired people equals less tax revenue and less cash flow through the economy. This is demonstrably untrue. There is absolutely reams and reams of economics papers which disprove this notion. I’ve not got time to pull up the references but they’re easy to find on Google Scholar or JSTOR. ---
**Author:** ![HoldenCarver](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/holdencarver/32/32425_2.png) [@HoldenCarver](https://community.monzo.com/u/HoldenCarver)\ **Post date:** [6 July 2020 17:06 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/35 "2020-07-06T17:06:49Z")
> [@Cameron](#): > > Majority of them would be reinvested into their companies they founded that made them wealthy or investing into other companies and places. Meaning their money will be doing just as much for the economy Nope. If they’re investing, it will be in the stock market. And the stock market != the economy. If they were genuinely investing cash in their companies, this would lower their personal wealth and raise the wealth of their employees, decreasing the wage gap. But this isn’t happening. So in effect, they absolutely are sitting on their money. To bang the Bezos drum again, he could’ve paid for his employee fund himself without it hurting his wealth at all, yet he still didn’t and tried to crowdfund it instead. ---
**Author:** ![HoldenCarver](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/holdencarver/32/32425_2.png) [@HoldenCarver](https://community.monzo.com/u/HoldenCarver)\ **Post date:** [6 July 2020 17:08 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/36 "2020-07-06T17:08:37Z")
> [@Cameron](#): > > What do you guys think will happen if you suddenly up the tax on the rich? > **[If you tax the rich, they won't leave: US data contradicts millionaires' threats](https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats)** > > Does raising taxes on the rich really trigger their migration to more obliging states or countries? This study of every million-dollar earner in the US shows otherwise ---
**Author:** ![HoldenCarver](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/holdencarver/32/32425_2.png) [@HoldenCarver](https://community.monzo.com/u/HoldenCarver)\ **Post date:** [6 July 2020 17:10 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/37 "2020-07-06T17:10:19Z")
> [@jwd2017](#): > > I seem to remember reading something about Apple having huge stockpiles of cash years ago, so much so they were struggling to move it around the globe without incurring massive tax bills. (I might be misremembering that). Quick Google threw this up: > **[Apple's burden: a mountain of money it can't really use](https://www.theguardian.com/technology/2014/sep/07/apple-iphone-6-cash-pile-tax-avoidance-us)** > > US companies can end up sitting on vast piles of untappable cash, held overseas for tax purposes. Success for the iPhone 6 would make things worse ---
**Author:** ![anon95680666](https://avatars.discourse-cdn.com/v4/letter/a/e9a140/32.png) [@anon95680666](https://community.monzo.com/u/anon95680666)\ **Post date:** [6 July 2020 17:14 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/38 "2020-07-06T17:14:10Z")
its Ironic that these reports are from the Guardian Media Group 🙂 ---
**Author:** ![HoldenCarver](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/holdencarver/32/32425_2.png) [@HoldenCarver](https://community.monzo.com/u/HoldenCarver)\ **Post date:** [6 July 2020 17:38 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/40 "2020-07-06T17:38:43Z")
> [@Eden](#): > > The stock market also does help the economy. > **[The stock market is not the economy - Marketplace](https://www.marketplace.org/2019/09/30/the-stock-market-is-not-the-economy/)** > > But, yes, the two are related. And that relationship can get pretty interesting. You can’t say that the stock market supports the economy when not so long ago back in this thread you were saying taxes (leading to public sector spending) don’t. Further, the disconnect between the economy and the stock market is plain to see in the fact that the stock market has recovered rapidly while the economy hasn’t. > [@Eden](#): > > He would have to liquidate assets but sure. In any case so what? Your for handouts? E.g taxing and redistributing? He’s sold Amazon stock for lesser reasons before. So sure, he can sell some more (and still have more than enough left). I’m all for taxing and redistributing, yes, but I object to this being characterised as ‘handouts’. ---
**Author:** ![Cameron](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/cameron/32/66723_2.png) [@Cameron](https://community.monzo.com/u/Cameron)\ **Post date:** [6 July 2020 17:50 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/42 "2020-07-06T17:50:14Z")
Quick question, out of curiosity, what do you all mean when you say “redistribute”? ---
**Author:** ![MalaiseForever](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/malaiseforever/32/123325_2.png) [@MalaiseForever](https://community.monzo.com/u/MalaiseForever)\ **Post date:** [6 July 2020 18:46 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/44 "2020-07-06T18:46:10Z")
Sorry but you are talking absolute nonsense ---
**Author:** ![BritishLibrary](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/britishlibrary/32/97251_2.png) [@BritishLibrary](https://community.monzo.com/u/BritishLibrary)\ **Post date:** [6 July 2020 19:02 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/45 "2020-07-06T19:02:31Z")
I may regret asking in this thread - but what are everyones thoughts on UBI? ---
**Author:** ![braddders](https://avatars.discourse-cdn.com/v4/letter/b/3ab097/32.png) [@braddders](https://community.monzo.com/u/braddders)\ **Post date:** [6 July 2020 19:21 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/47 "2020-07-06T19:21:12Z")
I think its a really good idea, currently its a mess for those people who cannot work to know what their entitled too, job seekers, disability allowance, universal income etc… there is like 10 different benefit schemes. UBI stops this, it also stops the unfairness, currently its just another human deciding if someone is ‘unfit for work’ and they have their own opinions, with UBI there is no unfairness as everyone gets the same, its a much cleaner system. I think everyone has a right to live, so UBI should provide just enough for food for 1 person, and 1 persons accommodation, I would say £500 a month for every adult is enough, with this amount you can rent a very small flat in most areas, and have enough for basic food. Those who decide to better themselves and earn luxuries which are not a human right should be able to go to work to earn additional income for this, regardless of how much other income you earn, the UBI should remain unaffected, also it should not be means tested. I think a simple implementation for this would be to remove the personal tax free allowance of 12.5k, so if you go work and earn £30k a year, you would be taxed on the whole £30k at 20% and Ni at 12%, so you would get £4k less per year than you already to, but will have the UBI income of £6k to fall back on should you loose your job or decide to spend time in education to better yourself for a more fulfilling career. Personally I think it would be a better system, and with the rise of automation it will probably be one that’s needed at some point in the near future. Would appreciate comments, do others agree? ---
**Author:** ![robulation](https://avatars.discourse-cdn.com/v4/letter/r/8e8cbc/32.png) [@robulation](https://community.monzo.com/u/robulation)\ **Post date:** [6 July 2020 21:09 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/48 "2020-07-06T21:09:11Z")
Absolutely correct. Banks in particular are so bad. Truth be told, it’s the old institutions that are clearly the worst. How on earth they got away with bank charges of £5 if you went overdrawn by 58p is some of the most criminal behaviour you can imagine!?! Having actually worked for a large bank… Officially, their most important customers weren’t the ones who had a LOAD of money in their banks. It was the ones who had the MOST money borrowed from the banks… the ones who had multiple products with the banks. The ones who are basically the MOST in debt, and not even the ones who are readily paying it back on time! They don’t want you to save. In fact, most banks need you to be bad with money so they can up-sell overdraft facilities, loans, credit cards, mortgages, insurance. That’s how economies grow, get greedy, invest badly, crash. Ad infinitum. ---
**Author:** ![Feathers](https://dub1.discourse-cdn.com/monzo/user_avatar/community.monzo.com/feathers/32/45868_2.png) [@Feathers](https://community.monzo.com/u/Feathers)\ **Post date:** [2 January 2021 21:09 UTC](https://community.monzo.com/t/is-the-economy-set-up-in-a-way-which-doesnt-support-mass-saving/100803/49 "2021-01-02T21:09:12Z")
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