Transferring spending power....
This post by Caroline Baum got me going. She views that people not paying their mortgage and then having more money to spend in the economy a net zero because someone else is not getting paid.
I disagree about how that works, or at least shows up in the economy. Money that is spent versus invested shows up very differently. If you don't have enough resources to make ends meet and then you stop paying your mortgage, much of what you are not spending on the mortgage can show up in consumer spending.
If you have money to invest, you investment money is sitting there basically trying to extract resources from others. Right now there is too much money sitting there trying to extract resources from those that don't have much and each other. It seems to me that money that is going into the hand of people who do not have the resources to save circulates in the economy far more then for people who do have the resources to save. Further, those that have the resources to save are far more likely to spending money on travel to other countries, which simply takes the money out of the country.