> > By giving people money to spend, it unlocks the economy's potential to produce wealth for the people.

> This is a corollary to the myth that wealthy people hoard cash. They do not.

It depends on your definition of "hoard." I agree with you that they don't literally stuff it into mattresses... usually.

> 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it).

I agree. But a question we might ask ourselves is how much of that money is invested productively. In other words, how much of it flows back into the hands of the consumers for the purchase of useful wealth that benefits them? The answer is: not all of it.

Then we can ask ourselves how much of that money flows into the financial sector and accumulates there without fueling the productive economy. The answer is: some of it.

From the perspective of the productive economy, the result is the same as if rich people were stuffing their money into mattresses.

So that money needs to be replaced. Historically, to the extent that we've replaced that money, we've tried to do it through the labor market and we've been moderately successful.

One of the things we do is monetary stimulus that increases the amount of lending in the private financial sector. Some of that lending goes to the creation of jobs that we probably don't need. It also destabilizes the economy by fueling credit bubbles like the one we saw collapse in 2008.

Basic income is an alternative. If you prefer, you can think of it as a form of fiscal stimulus that would allow the Fed to normalize interest rates.