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Rent/interest are payments for nothing. There is no service or goods exchange behind it, no labour involved. If this money is instead used for public consumption (as taxes) this money then circulates in the hands of wealth creators, labour and capital, not rentier. And when the interest of labour and capital grows, there will be more wealth and more exchange and more consumption. Both (real) investment demand and wage purchase power and equal income distribution.

(And there is also multiplier effect).

by kjr63 on Mon Jun 6th, 2011 at 03:47:58 AM EST
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