Velocity of money

Why am I not hearing more about this?

I know very little about economics, so I feel qualified to come up with the Big Issues that those better informed have long since grown beyond. My Big Issue is, what’s happened to velocity of money? I used to hear the term often, now seldom.

I thought it was a truism that the greater the velocity of money, the richer everyone felt. If y0u and I have $100 between us, well, actually I have it, and I buy something from you for $100, then you buy something from me for $100, and…. In no time at all we’ve everything we want, to a value of many $100s, that the other has or can produce, in an economy of only $100.

Shouldn’t the various sectors of the economy, the 1%, the 10%, the 60%, be assessed for how rapidly their money circulates? And then, those whose money circulates less rapidly would be taxed extra and that tax money redistributed to those whose money flows faster, to get that money back in circulation.

One nice result of that would be to get the money sitting in banks and under mattresses back into circulation. The economy would be “healthier,” making more people happy, for the existing wealth.

Another consequence of rewarding money with a higher velocity would be, we’d become ingenious in creating new commodities we could buy and sell. Suppose massage didn’t exist. Everyone’s sitting around, without a job, nothing to buy from each other, then someone invents massage and we can all give each other massages. We’ve created wealth. Wait, that doesn’t seem to work. Well, suppose we each invent some new commodity, that others would want if they had cash. How’s that?

The ultimate commodity is human nature. Most of what money is for lies in human nature. Buy a yacht—isn’t that for the company of other rich people far from land? Now, why not explore human nature for new commodities? And sell those. For example, in middle age I learned to draw. My line drawings are a new commodity. Of course no one will buy them because they haven’t yet developed a commodity of their own that I want that we can barter for. Or buy.

I imagine rows of stores on a main street that used to be for clothes and fishing tackle taken over for creative services. One might offer conversation, another might offer stories of imaginary travels, others… well, you make them up.

Is it just me, or are economists forgetting the fundamentals?