http://www.lrb.co.uk/v37/n04/simon-wren-lewis/the-austerity-con
An interesting read based mostly on the situation in the UK.
An interesting read based mostly on the situation in the UK.
I don't know why they don't do that either axulus. Maybe because that would actually help strapped people out instead of banks. QE is basically that but for banks.
It cannot be that hard to access accounts. I can see the problem that people with multiple accounts (especially among different financial institutions) would get more money. But giving everyone a fixed amount regardless of income is progress because that set amount is a higher proportion of lower incomes.I don't know why they don't do that either axulus. Maybe because that would actually help strapped people out instead of banks. QE is basically that but for banks.
Too hard to access everyone's account, and not progressive.
I think it's a failing of the term 'progressive'. It isn't geometric, logarithmic, or any such accelerating model inverse to the income of the person, but it is definitely progressive in that it is, egalitarian, perfectly fair, and trivially easy. I would like to also see some kind of leakyness introduced in assets as well, to provide a sink and reduce the inflation this would create, but maybe we can just use this as the method for deploying all new money and have what is essentially the same effect, coupled with a mildly negative bond rate.It cannot be that hard to access accounts. I can see the problem that people with multiple accounts (especially among different financial institutions) would get more money. But giving everyone a fixed amount regardless of income is progress because that set amount is a higher proportion of lower incomes.Too hard to access everyone's account, and not progressive.
I don't know why they don't do that either axulus. Maybe because that would actually help strapped people out instead of banks. QE is basically that but for banks.
Too hard to access everyone's account, and not progressive. Much easier to treat it as government spending, reducing taxes or increasing spending as appropriate.
Now, why giving it to the banks was a good idea is another matter. In early stages in the UK, some banks were, in effect, nationalised, having to surrender shareholdings in return for assets, but this scared the markets too much, so we went back to giving them free money.
I don't know why they don't do that either axulus. Maybe because that would actually help strapped people out instead of banks. QE is basically that but for banks.
It cannot be that hard to access accounts. I can see the problem that people with multiple accounts (especially among different financial institutions) would get more money. But giving everyone a fixed amount regardless of income is progress because that set amount is a higher proportion of lower incomes.Too hard to access everyone's account, and not progressive.
Poorest people don't have bank accounts at all. Also, you'd have those who would set up multiple accounts just for the purpose of receiving the money.It cannot be that hard to access accounts. I can see the problem that people with multiple accounts (especially among different financial institutions) would get more money. But giving everyone a fixed amount regardless of income is progress because that set amount is a higher proportion of lower incomes.Too hard to access everyone's account, and not progressive.
I suspect it is the belief that direct cash handouts are non-starters in the political arena.It cannot be that hard to access accounts. I can see the problem that people with multiple accounts (especially among different financial institutions) would get more money. But giving everyone a fixed amount regardless of income is progress because that set amount is a higher proportion of lower incomes.
Yeah, I don't really see the problem. We already have a large scale cash distribution system in place in the form of social security. Shouldn't be too much more difficult to have a universal system in place, with the same verification procedures and payment methods used for social security. People with multiple accounts shouldn't get extra, just like they don't with social security.
In your point of view, why is such a stimulus option rarely discussed or advocated for by economists? It seems to fix the dual problems of lack of demand and danger of deflation occurring in a recession like the one we had.
I suspect it is the belief that direct cash handouts are non-starters in the political arena.Yeah, I don't really see the problem. We already have a large scale cash distribution system in place in the form of social security. Shouldn't be too much more difficult to have a universal system in place, with the same verification procedures and payment methods used for social security. People with multiple accounts shouldn't get extra, just like they don't with social security.
In your point of view, why is such a stimulus option rarely discussed or advocated for by economists? It seems to fix the dual problems of lack of demand and danger of deflation occurring in a recession like the one we had.
Those handouts when to tax filers. Which excludes all those who do not file taxes. But, I suspect in the last bailout, there appeared to be much more concern about the stability and viability of the financial system and little to none about the stability and/or viability of households. For some odd reason,directly bailing out lenders who knowingly made bad loans (or bought bad loans) seemed more morally upright than directly bailing out borrowers, even though the latter would have solved more than one problem.I suspect it is the belief that direct cash handouts are non-starters in the political arena.
But such handouts have precedent - remember the Bush stimulus payment?
Those handouts when to tax filers. Which excludes all those who do not file taxes. But, I suspect in the last bailout, there appeared to be much more concern about the stability and viability of the financial system and little to none about the stability and/or viability of households. For some odd reason,directly bailing out lenders who knowingly made bad loans (or bought bad loans) seemed more morally upright than directly bailing out borrowers, even though the latter would have solved more than one problem.But such handouts have precedent - remember the Bush stimulus payment?
Actually, that'd be $2300, not $2.3 million.Let us look at the recent bank bailout....$700 B., if not given to only a few banks would have been $2.3 million per person in the whole country.
Actually, that'd be $2300, not $2.3 million.Let us look at the recent bank bailout....$700 B., if not given to only a few banks would have been $2.3 million per person in the whole country.
OUTFLOWS: $614 billion This includes money that has actually been spent, invested, or loaned.
INFLOWS: $667 billion Money returned and paid to Treasury as interest, dividends, fees or to repurchase their stock warrants.
Actually, that'd be $2300, not $2.3 million.Let us look at the recent bank bailout....$700 B., if not given to only a few banks would have been $2.3 million per person in the whole country.
The problem seems to be purely ideological; The GFC provided a convenient excuse, but the media and the right-wing of politics in Australia are banging the same 'deficit must be eliminated' drum - despite our having been left practically unscathed by the GFC, and despite our Debt to GDP ratios being incredibly small by world standards. (Australian Government debt was 29.9% of GDP in 2012, according to the CIA World Factbook; cf 72.5% for the USA, and 90% for the UK, from the same source).
It seems that the voting public find it easy to understand 'debt is bad, mmkay'; and that they are easily frightened by large numbers (anything expressed in millions is an unthinkably large sum; and millions, billions or trillions are interchangeable psychologically, because it all just screams "HUGE DEBT!!!"). On the other hand accepting that 'shitloadsillions' of dollars of debt might not be all bad is hard; and understanding why debt is good at times, and bad at other times is even harder; so selling the opposite message is really difficult.
It is irrelevant whether a policy is in the best interests of the voters; what matters is whether they can be readily scared by headlines into thinking that it is.
I wish I had a dollar for every Australian on Facebook, or in news article and blog comments who has parroted the 'Labor left us with a huge debt' meme. The facts show that this is rubbish; the facts also show that under right-wing governments in Australia, deficits have actually been far higher than under Labor; but like 'The earth is flat, and at the centre of the universe', everybody knows that 'Labor governments created a mountain of debt, and only the LNP can fix this problem'. That not one word is true is, sadly, irrelevant - it is what people 'know' when they cast their votes.
Labor did not create most of the current debt; even now, there isn't what any sane person would call a 'mountain' of debt; the LNP can't 'fix' this, their policies make things worse, not better; and there isn't an actual problem - which is a key reason why trying to fix it makes things worse. Apart from 'a', 'of' and 'the', pretty much every word of this thing that 'everybody knows' is wrong. But everybody 'knows' it.
How much easier it must be to sell the line that 'our debt is killing us', when you actually have a noticeable debt. If right-wing politicians can sell this lie when Debt to GDP is less then 30%, it is hardly impressive that they manage to sell it in a country which has a Debt to GDP in the 90% range.