Wealthy people aren't spending as much, causing economy to slow - Business Insider

NPR's Scott Horsley reports thatas much money, and it's having serious repercussions for the outlook of economic recovery.

Wealthy people typically spend their discretionary income on high-end restaurants and luxury vacations, or cultural activities like the theater and music festivals. Because the pandemic brought these industries to a virtual standstill, the rich haven't had access to their typical outlets for dropping cash.

According to NPR, the highest-earning 25% of Americans have been responsible for two-thirds of the total drop in national spending since January. Spending by lower-income households did increase after stimulus checks were released, but the spending of Americans in the top income brackets is still "far off" from pre-COVID levels, Horsley reports.

"From the perspective of people who are not living paycheck to paycheck, the main concern here is really fighting the virus," Hendren told NPR. "Unless we remove the threat of getting sick or getting your family members sick, it's hard to imagine that spending will recover to the pre-COVID levels." The ultrawealthy's drop in spending may have a major ripple effect, but some businesses are pivoting to stay afloat, Business Insider's Allana Akhtar previously reported. Hendren's team found that the biggest drop in employment from the coronavirus pandemic in the US was among low-wage workers in rich neighborhoods.But other businesses that cater to the wealthy are adapting their services — or even their service areas — to retain clients and customers.

Weirdly this same phenomenon is making the stock market go up (in addition to crazy Fed liquidity). As the upper 40% (who haven’t yet started losing their jobs) keep getting their paychecks, they have nowhere else to put their new free cash flow than into the markets.

stop fucking trolling us business insider

Spending by the rich doesn't help the economy. It is a drain on everyone else.

If they were taxed in the first place like everyone else then the money would be more accessible right? taxtherich taxchurches

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