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To Jack from eyeflare,

I can see where Matt's coming from in terms of paper investments. If you buy a stock that's already in circulation (as opposed to at the IPO), the company doesn't actually get any of that money. The only way the company can benefit from higher share prices is by issuing new shares at the new price. They don't get any money off of the trading of their stock in the public market.

To further Matt's point (horribly oversimplified, mind you):
- A poor person gets a tax cut and hires a roofing company to fix his leaky roof. The company gets revenue.
- A rich person gets a tax cut and invests funds in the roofing company's stock, which is already listed on a public exchange. The company gets no revenue.

Whether buying paper assets indirectly stimulates production, I can't say, but it doesn't stimulate production the same way buying the company's product or service does.

Oh, and a definition check: what's BNP? Did you mean GNP (gross national product)?

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