> For the sake of argument, let's assume that the super-rich spend the same or a similar proportion of their income on necessities as everyone else (meaning that they buy more food, more clothing, more housing, etc.). What does this do?
Like it or not, changes in wealth for the super-rich seem to have effects on the non-super-rich too. As the richest gain more wealth, the less rich feel even less rich. As they see bigger and nicer houses going up, more expensive cars driving around, etc., the relative quality of theirs is going down. In an attempt to keep up, they spend more, and so on down the socioeconomic ladder. This effect has been called "trickle-down consumption" in a recent study detailed here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/t....
The result is is exactly what you acknowledge later, which is a bit contradictory to your opening assumption: "[T]he super-rich don't actually spend their money in the same way poor people do. They invest a good chunk of their money and they don't spend in the same proportion of their income on necessities..."
People in lower income brackets are spending more money while saving less, and this is in part due to the rising displays of opulence from the upper income earners.
Like it or not, changes in wealth for the super-rich seem to have effects on the non-super-rich too. As the richest gain more wealth, the less rich feel even less rich. As they see bigger and nicer houses going up, more expensive cars driving around, etc., the relative quality of theirs is going down. In an attempt to keep up, they spend more, and so on down the socioeconomic ladder. This effect has been called "trickle-down consumption" in a recent study detailed here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/t....
The result is is exactly what you acknowledge later, which is a bit contradictory to your opening assumption: "[T]he super-rich don't actually spend their money in the same way poor people do. They invest a good chunk of their money and they don't spend in the same proportion of their income on necessities..."
People in lower income brackets are spending more money while saving less, and this is in part due to the rising displays of opulence from the upper income earners.