Donald Trump, “Helicopter Money” and that problem of Debt
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What do folks here think of this? What might be the repercussions if Trump's "wild idea" was implemented?
If more US dollars are printed than the US economy grows then I would want to sell any dollars I have for a currency not printed in excess of its national economic growth. Many people with many more dollars would feel the same.
They won't do it, though something similar was tried on a mini-scale in Taiwan in the early years of the Great Recession after the Crash of 2008:http://www.worldsocialism.org/spgb/socialist-standard/2000s/2009/no-1254-february-2009/cooking-books-1-free-money-everyoneThe result would obviously be massive inflation. Interesting, though, that 8 years later they still thinking of ways of trying to get capital accumulation going again at its previous rate. From the article:
Quote:Central bank-issued money could be used to fund tax cuts or infrastructure spending in an attempt to boost growth.The British Labour government under James Callaghan tried this to get out of the slump of the 1970s. Here's his verdict on it, at the 1976 Labour Party conference:
Quote:We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists and that in so far as it ever did exist, it only worked on each occasion since the war by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment.A two part article on helicoptering and UBIhttp://dissidentvoice.org/2016/05/basic-income-helicopter-money/http://dissidentvoice.org/2016/05/basic-income-international-experience/
How naive can you get? Hand out free money to everyone and expect this to have no effect on either wages or prices. And this is just plain wrong:
Quote:The bankers haven’t raised much interest here but they are the elephant in the room. One which British Labour Party leader Jeremy Corbyn recognized with his proposal of a “People’s Quantitative Easing” in which the Bank of England would channel new money directly to citizens, not leave it up to the banks to do with as they please. In other words: take the control of money away from the banks, and in doing so, alleviate poverty and create a multiplier effect on job creation.I don't think Corbyn promised that the Bank of England should "channel new money directly to citizens", did he, only directly to the government. He may be an old-fashioned leftwing Keynesian reformist, but he's not a currency crank.
Are there shades of Major Douglas' social credit idea?https://en.wikipedia.org/wiki/Social_creditIf it was pursued as a policy, it would be wise to move investments out of cash.
Nearly all currency cranks (except for those who want to go back to the gold standard) are underconsumptionists, on the basis of varying theories, and so propose the state printing more money (claims on wealth) to overcome the chronic shortage of purchasing power they believe is built-in to the existing economic system. It's not just Major Douglas and Social Credit.Here's John Keracher on the "money bugs" (the US word for currency crank) of his day (mid-1930s) in his Economics for Beginners:
Quote:In some parts of Michigan and Indiana, the “Direct Credits” movement has kindled a new flame in the old bimetal lamp and is attracting quite a few money bugs. Direct Credit for Everybody is the title of a small book, chock-full of economic errors, the author of which is one Alfred Lawson, who modestly tells his readers that his book “is as close to the truth as it is possible for the human mind to make it.”This Lawson is the pole star of the “Direct Credits” movement which aims to abolish interest and leave rent and direct profits. This is to be achieved by the government printing unlimited quantities of currency and providing without interest “direct credits for everybody.” Lawson conceives of money as being nothing but a government stamp, anyway. In some of the western states a similar movement calls itself “Social Credits.” The “Liberal Party” is another small group, led by “Coin” Harvey, which aims to remedy all social ills by reforming the monetary system.I'm not sure if helicopters existed in those days but the idea of money from heaven did..
ALB wrote:Nearly all currency cranks (except for those who want to go back to the gold standard) are underconsumptionists, on the basis of varying theories, and so propose the state printing more money (claims on wealth) to overcome the chronic shortage of purchasing power they believe is built-in to the existing economic system. It's not just Major Douglas and Social Credit.Here's John Keracher on the "money bugs" (the US word for currency crank) of his day (mid-1930s) in his Economics for Beginners:Quote:In some parts of Michigan and Indiana, the “Direct Credits” movement has kindled a new flame in the old bimetal lamp and is attracting quite a few money bugs. Direct Credit for Everybody is the title of a small book, chock-full of economic errors, the author of which is one Alfred Lawson, who modestly tells his readers that his book “is as close to the truth as it is possible for the human mind to make it.”This Lawson is the pole star of the “Direct Credits” movement which aims to abolish interest and leave rent and direct profits. This is to be achieved by the government printing unlimited quantities of currency and providing without interest “direct credits for everybody.” Lawson conceives of money as being nothing but a government stamp, anyway. In some of the western states a similar movement calls itself “Social Credits.” The “Liberal Party” is another small group, led by “Coin” Harvey, which aims to remedy all social ills by reforming the monetary system.I'm not sure if helicopters existed in those days but the idea of money from heaven did..
During the government of George Bush JR, the Federal Reserve Bank mailed rebate checks to most of the workers and it did not reactivate the economy, on the contrary, it continued its slope down toward a financial crisis. Alban is right when he says that all the money cranks are underconsumptionists.The Venezuelan government repatriated all its gold from different banks, and they printed more paper money and it did not work either, the crisis continued and a super inflationary situation has been placed on the back of the working class
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