According to Shuman, most poor societies have significant aggregate revenues to consume. Their earnings are heavily concentrated in financial institutions in the form of savings, bonds, shares, stocks, and life insurance, with only a small portion available for reinvestment. The ratio of money spent to reinvestment is large, causing the economy to stagnate (106).
Researchers have investigated different methods of returning money to local economies. Equity-based crowd funding, according to McGloughlin's "Listen to the Crowd," is where investors solicit for money from a crowd to kick off investment initiatives. People with low incomes might therefore own a portion of the investment enterprise. However, it faces regulation challenges, the government is on the watch on the industry developments to create regulations that scrap off some of the investor’s funds (66-69).
Fuller and Jonas. “Alternative Economic Spaces.” explains community credit unions as an alternative financing option to poor communities. He notes that this is an institution that pools the savings and offer credit facilities at low cost to members in a specified geographical area. They argued that the main challenge is the distinctive socio-economical practices that contrast rational economic values (56-57).
In conclusion, most poor communities in the United States usually have enough incomes and resources that can be channeled through reinvestments to boost the economy. The strategy is to increase the ratio allocation for investment and utilize financing alternatives to create future wealth and a locally sustaining economy.
Works Cited
Fuller, Duncan, and Andrew EG Jonas. "Alternative economic spaces." Alternative economic spaces (2003): 55-73. Date Accessed: 9TH March 2017
McLoughlin. “Listen To The Crowd.” Director Publications, April 2016, pp. 1-7. Web. Date Accessed: 8TH March 2017
Shuman, Michael. Going local: Creating self-reliant communities in a global age. Routledge, 2013.
