[quote=Aecetia]I think it is going to be difficult to define speculative trading from trading and anything that decreases money invested should work as a brake on what I still consider a fragile recovery. If you can show otherwise, then I would like to see how more transaction tax will stimulate Wall Street.[/quote]
I think the mistake here is the assumption that any stock trading increases the output of the economy. Other than when corporations go to market to raise capital (IPO’s or secondary offerings), it doesn’t. To bring it closer to this blog’s topic, it’s like looking at increased resale activity in the residential real estate market and saying the economy is growing. Other than brokerage commissions, it’s not. When I sell my 1,000 shares of Ford and you buy it, the economy hasn’t gotten any better. If I pay a 1/4 of a point to sell and/or you pay 1/4 of a point to buy, it probably won’t dissuade us from making the trade.
Probably different for day traders. But I think you’d be hard pressed to come up with an argument that that industry improves the economy as a whole.
