&gt; if it&#x27;s being invested by a bank or a wealth manager it&#x27;s going to be invested in existing companies, whose operations will be squeezed and distorted to provide the maximum possible return as fast as possible.<p>What do you mean by that? Existing companies raise capital to fund things like R&amp;D, Capex, and entrances into new markets. All of these promote economic and technological growth and generally result in the creation of jobs.<p>&gt; This is more likely to kill jobs and prosperity than it is to produce them. It&#x27;s also one of the prime causes of market bubbles.<p>I&#x27;m not sure why you think investment causes job destruction. It&#x27;s quite likely that there is less capital (for production) currently than would exist at the so called &quot;golden level of capital&quot;. Increased investment would actually help rectify this (at the cost of current consumption). See a model like the Solow growth model for more information on this.<p>&gt; If it&#x27;s being actively invested, the investor has the opportunity to build new companies.<p>Unfortunately, many people have neither the desire nor the capability to successfully build companies and are able to enjoy returns on their money precisely because financial markets exist to invest in.<p>&gt; If it&#x27;s redistributed by the government, the government can spend it on improving critical infrastructure, which is an easy way to create jobs and improve economic activity of all kinds. It can also invest it in new tech and R&amp;D, which eventually trickles down to new opportunities for innovation.<p>What makes the government better at job creation and R&amp;D (with the exclusion of basic research) than the private sector? Greece has shown that governments can, in fact, allocate resources rather poorly [1].<p>[1] <a href="http:&#x2F;&#x2F;www.businessinsider.com&#x2F;kyle-bass-chief-bank-economist-harry-potter-can-fix-greece-2011-2" rel="nofollow">http:&#x2F;&#x2F;www.businessinsider.com&#x2F;kyle-bass-chief-bank-economis...</a>