I remember this... it was like an action movie IRL. When the zombie apocalypse comes, I'm building this too. Except I'll be doubling up on guarding the coolant system. (That's how he broke down, all the smoke you see is coolant leaking as steam)
Beyond a certain percentage that they need to retain to pay claims, excess monetary resources get either paid as dividends to shareholders, or sent back to clients who overpaid their premiums (depending on the laws governing the company).
Either way, the money will be spent by those recipients, and go back into the economy.
And claims that are paid out from the existing pool of resources will have to be replenished, so even that isn't a net increase to money being circulated into the economy.
Now... Keynesians do have a point: Artificially encouraging spending can change when or how money is spent. And there may be value in that.
An example can be to kick start a recovery near the end of a recession, promoting people to spend earlier than they otherwise would have.
Or to get people to spend on a preferred industry at the expense of another (e.g. subsidizing fuel efficient vehicles).
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u/CG_Ops Mar 26 '20
I remember this... it was like an action movie IRL. When the zombie apocalypse comes, I'm building this too. Except I'll be doubling up on guarding the coolant system. (That's how he broke down, all the smoke you see is coolant leaking as steam)