Okay. There's a great movie, though, called "Money as Debt" which is definitely biased, definitely simplistic, definitely anti-establishment and a pretty good watch:

So money doesn't do anything unless it's moving. Money in the bank? Useless to the economy. DEAD. Money under your mattress, money in your wallet, money in your sock drawer, might as well not be money. The only time money is useful is when it's being used in transactions.

Money is so useful, in fact, that banks don't need to have it to lend it out. Well, it's not quite that simple, but fractional reserve banking basically means that if I've got a nickel, I can loan up to a dollar. If I loan that dollar to another bank, they can loan 20 dollars. if another bank borrows that 20 dollars, they can loan 400 dollars. And the only thing that's real is the fuckin' nickel. Head hurt yet? Start to see why "runs on banks" are uber-bad things? And why the whole system is predicated on trust?

I"m in the process of building a birth center. I'm not a pauper but I sure can't field six figures of biomedical build-out. Confidence is high it will be a money maker, and will pay taxes, and hire employees, and take in fees from expectant mothers, and before that pay the wages of a dozen contractors, architects, designers and all the rest, but there needs to be a loan to make it happen. And that loan needs to come from a bank that's solvent and is willing to risk its precious, precious deposits on my has-every-chance-of-failing unsecured birth center.

It's in the government's best interests to have that birth center built. It'll provide jobs. It'll pay taxes. It's a part of the durable goods economy. Yadda yadda yadda. But it's not in the bank's best interest to have that birth center built unless it knows for sure we'll pay back the loan with interest. If that interest rate is too high, we won't build the birth center 'cuz we can't afford to. So it needs to be cheap for the bank to loan money to us and when the government has literally made it free to borrow money from the government (the prime rate) they run out of options other than quantitative easing.

Now say that instead of giving that money to a bank, the government gives it directly to me. I'm going to get a piece, but not a piece big enough to build a birth center with. The contractors will get a piece, but not enough to grow their businesses (and nobody can afford to build anything anyway, unless they have cash). The banks will get a piece, but their fraction won't be nearly what it is if the government floats them by buying their previous obligations (like, other people's birth centers, for example). Everyone gets money, but no one gets any incentive to spend it.

This is why the "Bush tax cut" was so resoundingly panned by everyone - what the fuck are average americans going to do with $296? how's that going to help the economy? Lost in the subterfuge was the fact that the Walton siblings split $38 billion in tax cuts and the Waltons spent like mad. Think of what Walmart did between 2002 and 2008.

So. Wealth inequality yes, market liquidity yes. Wealth equality yes, market frigidity yes.

Make sense?