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It Begins: "Central Banks Should Hand Consumers Cash Directly"
... A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money
- Ben Bernanke, Deflation: Making Sure "It" Doesn't Happen Here, November 21, 2002
A year ago, when it became abundantly clear that all of the Fed's attempts to boost the economy have failed, leading instead to a record divergence between the "1%" who were benefiting from the Fed's aritficial inflation of financial assets, and everyone else (a topic that would become one of the most discussed issues of 2014) and with no help coming from a hopelessly broken Congress (who can forget the infamous plea by a desperate Wall Street lobby-funding recipient "Get to work Mr. Chariman"), we wrote that "Bernanke's Helicopter Is Warming Up."
The reasoning was very simple: in a country (and world) drowning with debt, there are only two options to extinguish said debt: inflate it away or default. Anything else is kicking the can while making the problem even worse. Because while the Fed has been successful at recreating the world's biggest asset bubble (in history), it has failed to stimulate broad, "benign" demand-pull inflation as the trickle down effects of its "wealth effect" have failed to materialize 6 years after the launch of the Fed's unconventional monetary policies.
In other words, a world stuck in the last phase before complete Keynesian collapse, had no choice but to gamble "all in" with the last and only bluff it had left before admitting the economic system it had labored under, one which has borrowed so extensively from the future to fund the present that there is no future left, has failed.
The only question left was when would the trial balloons for such monetary paradrops start to emerge.
We now know the answer, and it is today.
Moments ago a stunning article appearing in the "Foreign Affairs" publication of the influential and policy-setting Council of Foreign Relations, titled "Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People."
In it we read the now conventional admission of failure by Keynesians, who however, unwilling to actually admit they have been wrong, urge the even more conventional solution: do more of the same that has lead to the current financial cataclysm, only in this case the authors advocate no longer pretending that the traditional monetary channels work but to, literally, paradrop money. To wit:
To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.
Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
A third, and most important outcome, would be the one we have forecast from the beginning of this ridiculous central bank experiment: "hyperinflation" (which is not simply runaway inflation as it is often incorrectly designated - it is outright evisceration of the prevailing monetary system), which has been avoided for now, but which is inevitable in a world in which only the wholesale destruction of the fiat reserve currency is the one option left to inflate away the debt overhang.
So without further ado, here is the first official trial balloon - the article that one day soon will be seen as the canary in the paradropmine, and the piece that will finally get the rotor of Bernanke's, now Yellen's infamous helicopter finally spinning. Highlights ours:
Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People
From Foreign Affairs, by Mark Blyth and Eric Lonergan
In the decades following World War II, Japan’s economy grew so quickly and for so long that experts came to describe it as nothing short of miraculous. During the country’s last big boom, between 1986 and 1991, its economy expanded by nearly $1 trillion. But then, in a story with clear parallels for today, Japan’s asset bubble burst, and its markets went into a deep dive. Government debt ballooned, and annual growth slowed to less than one percent. By 1998, the economy was shrinking.
That December, a Princeton economics professor named Ben Bernanke argued that central bankers could still turn the country around. Japan was essentially suffering from a deficiency of demand: interest rates were already low, but consumers were not buying, firms were not borrowing, and investors were not betting. It was a self-fulfilling prophesy: pessimism about the economy was preventing a recovery. Bernanke argued that the Bank of Japan needed to act more aggressively and suggested it consider an unconventional approach: give Japanese households cash directly. Consumers could use the new windfalls to spend their way out of the recession, driving up demand and raising prices.
As Bernanke made clear, the concept was not new: in the 1930s, the British economist John Maynard Keynes proposed burying bottles of bank notes in old coal mines; once unearthed (like gold), the cash would create new wealth and spur spending. The conservative economist Milton Friedman also saw the appeal of direct money transfers, which he likened to dropping cash out of a helicopter. Japan never tried using them, however, and the country’s economy has never fully recovered. Between 1993 and 2003, Japan’s annual growth rates averaged less than one percent.
Today, most economists agree that like Japan in the late 1990s, the global economy is suffering from insufficient spending, a problem that stems from a larger failure of governance. Central banks, including the U.S. Federal Reserve, have taken aggressive action, consistently lowering interest rates such that today they hover near zero. They have also pumped trillions of dollars’ worth of new money into the financial system. Yet such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse. It’s well past time, then, for U.S. policymakers -- as well as their counterparts in other developed countries -- to consider a version of Friedman’s helicopter drops. In the short term, such cash transfers could jump-start the economy. Over the long term, they could reduce dependence on the banking system for growth and reverse the trend of rising inequality. The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them.
EASY MONEY
In theory, governments can boost spending in two ways: through fiscal policies (such as lowering taxes or increasing government spending) or through monetary policies (such as reducing interest rates or increasing the money supply). But over the past few decades, policymakers in many countries have come to rely almost exclusively on the latter. The shift has occurred for a number of reasons. Particularly in the United States, partisan divides over fiscal policy have grown too wide to bridge, as the left and the right have waged bitter fights over whether to increase government spending or cut tax rates. More generally, tax rebates and stimulus packages tend to face greater political hurdles than monetary policy shifts. Presidents and prime ministers need approval from their legislatures to pass a budget; that takes time, and the resulting tax breaks and government investments often benefit powerful constituencies rather than the economy as a whole. Many central banks, by contrast, are politically independent and can cut interest rates with a single conference call. Moreover, there is simply no real consensus about how to use taxes or spending to efficiently stimulate the economy.
Steady growth from the late 1980s to the early years of this century seemed to vindicate this emphasis on monetary policy. The approach presented major drawbacks, however. Unlike fiscal policy, which directly affects spending, monetary policy operates in an indirect fashion. Low interest rates reduce the cost of borrowing and drive up the prices of stocks, bonds, and homes. But stimulating the economy in this way is expensive and inefficient, and can create dangerous bubbles -- in real estate, for example -- and encourage companies and households to take on dangerous levels of debt.
That is precisely what happened during Alan Greenspan’s tenure as Fed chair, from 1997 to 2006: Washington relied too heavily on monetary policy to increase spending. Commentators often blame Greenspan for sowing the seeds of the 2008 financial crisis by keeping interest rates too low during the early years of this century. But Greenspan’s approach was merely a reaction to Congress’ unwillingness to use its fiscal tools. Moreover, Greenspan was completely honest about what he was doing. In testimony to Congress in 2002, he explained how Fed policy was affecting ordinary Americans:
"Particularly important in buoying spending [are] the very low levels of mortgage interest rates, which [encourage] households to purchase homes, refinance debt and lower debt service burdens, and extract equity from homes to finance expenditures. Fixed mortgage rates remain at historically low levels and thus should continue to fuel reasonably strong housing demand and, through equity extraction, to support consumer spending as well."
Of course, Greenspan’s model crashed and burned spectacularly when the housing market imploded in 2008. Yet nothing has really changed since then. The United States merely patched its financial sector back together and resumed the same policies that created 30 years of financial bubbles. Consider what Bernanke, who came out of the academy to serve as Greenspan’s successor, did with his policy of “quantitative easing,” through which the Fed increased the money supply by purchasing billions of dollars’ worth of mortgage-backed securities and government bonds. Bernanke aimed to boost stock and bond prices in the same way that Greenspan had lifted home values. Their ends were ultimately the same: to increase consumer spending.
The overall effects of Bernanke’s policies have also been similar to those of Greenspan’s. Higher asset prices have encouraged a modest recovery in spending, but at great risk to the financial system and at a huge cost to taxpayers. Yet other governments have still followed Bernanke’s lead. Japan’s central bank, for example, has tried to use its own policy of quantitative easing to lift its stock market. So far, however, Tokyo’s efforts have failed to counteract the country’s chronic underconsumption. In the eurozone, the European Central Bank has attempted to increase incentives for spending by making its interest rates negative, charging commercial banks 0.1 percent to deposit cash. But there is little evidence that this policy has increased spending.
China is already struggling to cope with the consequences of similar policies, which it adopted in the wake of the 2008 financial crisis. To keep the country’s economy afloat, Beijing aggressively cut interest rates and gave banks the green light to hand out an unprecedented number of loans. The results were a dramatic rise in asset prices and substantial new borrowing by individuals and financial firms, which led to dangerous instability. Chinese policymakers are now trying to sustain overall spending while reducing debt and making prices more stable. Like other governments, Beijing seems short on ideas about just how to do this. It doesn’t want to keep loosening monetary policy. But it hasn’t yet found a different way forward.
The broader global economy, meanwhile, may have already entered a bond bubble and could soon witness a stock bubble. Housing markets around the world, from Tel Aviv to Toronto, have overheated. Many in the private sector don’t want to take out any more loans; they believe their debt levels are already too high. That’s especially bad news for central bankers: when households and businesses refuse to rapidly increase their borrowing, monetary policy can’t do much to increase their spending. Over the past 15 years, the world’s major central banks have expanded their balance sheets by around $6 trillion, primarily through quantitative easing and other so-called liquidity operations. Yet in much of the developed world, inflation has barely budged.
To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.
MAKE IT RAIN
Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
Such an approach would represent the first significant innovation in monetary policy since the inception of central banking, yet it would not be a radical departure from the status quo. Most citizens already trust their central banks to manipulate interest rates. And rate changes are just as redistributive as cash transfers. When interest rates go down, for example, those borrowing at adjustable rates end up benefiting, whereas those who save -- and thus depend more on interest income -- lose out.
Most economists agree that cash transfers from a central bank would stimulate demand. But policymakers nonetheless continue to resist the notion. In a 2012 speech, Mervyn King, then governor of the Bank of England, argued that transfers technically counted as fiscal policy, which falls outside the purview of central bankers, a view that his Japanese counterpart, Haruhiko Kuroda, echoed this past March. Such arguments, however, are merely semantic. Distinctions between monetary and fiscal policies are a function of what governments ask their central banks to do. In other words, cash transfers would become a tool of monetary policy as soon as the banks began using them.
Other critics warn that such helicopter drops could cause inflation. The transfers, however, would be a flexible tool. Central bankers could ramp them up whenever they saw fit and raise interest rates to offset any inflationary effects, although they probably wouldn’t have to do the latter: in recent years, low inflation rates have proved remarkably resilient, even following round after round of quantitative easing. Three trends explain why. First, technological innovation has driven down consumer prices and globalization has kept wages from rising. Second, the recurring financial panics of the past few decades have encouraged many lower-income economies to increase savings -- in the form of currency reserves -- as a form of insurance. That means they have been spending far less than they could, starving their economies of investments in such areas as infrastructure and defense, which would provide employment and drive up prices. Finally, throughout the developed world, increased life expectancies have led some private citizens to focus on saving for the longer term (think Japan). As a result, middle-aged adults and the elderly have started spending less on goods and services. These structural roots of today’s low inflation will only strengthen in the coming years, as global competition intensifies, fears of financial crises persist, and populations in Europe and the United States continue to age. If anything, policymakers should be more worried about deflation, which is already troubling the eurozone.
There is no need, then, for central banks to abandon their traditional focus on keeping demand high and inflation on target. Cash transfers stand a better chance of achieving those goals than do interest-rate shifts and quantitative easing, and at a much lower cost. Because they are more efficient, helicopter drops would require the banks to print much less money. By depositing the funds directly into millions of individual accounts -- spurring spending immediately -- central bankers wouldn’t need to print quantities of money equivalent to 20 percent of GDP.
The transfers’ overall impact would depend on their so-called fiscal multiplier, which measures how much GDP would rise for every $100 transferred. In the United States, the tax rebates provided by the Economic Stimulus Act of 2008, which amounted to roughly one percent of GDP, can serve as a useful guide: they are estimated to have had a multiplier of around 1.3. That means that an infusion of cash equivalent to two percent of GDP would likely grow the economy by about 2.6 percent. Transfers on that scale -- less than five percent of GDP -- would probably suffice to generate economic growth.
LET THEM HAVE CASH
Using cash transfers, central banks could boost spending without assuming the risks of keeping interest rates low. But transfers would only marginally address growing income inequality, another major threat to economic growth over the long term. In the past three decades, the wages of the bottom 40 percent of earners in developed countries have stagnated, while the very top earners have seen their incomes soar. The Bank of England estimates that the richest five percent of British households now own 40 percent of the total wealth of the United Kingdom -- a phenomenon now common across the developed world.
To reduce the gap between rich and poor, the French economist Thomas Piketty and others have proposed a global tax on wealth. But such a policy would be impractical. For one thing, the wealthy would probably use their political influence and financial resources to oppose the tax or avoid paying it. Around $29 trillion in offshore assets already lies beyond the reach of state treasuries, and the new tax would only add to that pile. In addition, the majority of the people who would likely have to pay -- the top ten percent of earners -- are not all that rich. Typically, the majority of households in the highest income tax brackets are upper-middle class, not superwealthy. Further burdening this group would be a hard sell politically and, as France’s recent budget problems demonstrate, would yield little financial benefit. Finally, taxes on capital would discourage private investment and innovation.
There is another way: instead of trying to drag down the top, governments could boost the bottom. Central banks could issue debt and use the proceeds to invest in a global equity index, a bundle of diverse investments with a value that rises and falls with the market, which they could hold in sovereign wealth funds. The Bank of England, the European Central Bank, and the Federal Reserve already own assets in excess of 20 percent of their countries’ GDPs, so there is no reason why they could not invest those assets in global equities on behalf of their citizens. After around 15 years, the funds could distribute their equity holdings to the lowest-earning 80 percent of taxpayers. The payments could be made to tax-exempt individual savings accounts, and governments could place simple constraints on how the capital could be used.
For example, beneficiaries could be required to retain the funds as savings or to use them to finance their education, pay off debts, start a business, or invest in a home. Such restrictions would encourage the recipients to think of the transfers as investments in the future rather than as lottery winnings. The goal, moreover, would be to increase wealth at the bottom end of the income distribution over the long run, which would do much to lower inequality.
Best of all, the system would be self-financing. Most governments can now issue debt at a real interest rate of close to zero. If they raised capital that way or liquidated the assets they currently possess, they could enjoy a five percent real rate of return -- a conservative estimate, given historical returns and current valuations. Thanks to the effect of compound interest, the profits from these funds could amount to around a 100 percent capital gain after just 15 years. Say a government issued debt equivalent to 20 percent of GDP at a real interest rate of zero and then invested the capital in an index of global equities. After 15 years, it could repay the debt generated and also transfer the excess capital to households. This is not alchemy. It’s a policy that would make the so-called equity risk premium -- the excess return that investors receive in exchange for putting their capital at risk -- work for everyone.
MO' MONEY, FEWER PROBLEMS
As things currently stand, the prevailing monetary policies have gone almost completely unchallenged, with the exception of proposals by Keynesian economists such as Lawrence Summers and Paul Krugman, who have called for government-financed spending on infrastructure and research. Such investments, the reasoning goes, would create jobs while making the United States more competitive. And now seems like the perfect time to raise the funds to pay for such work: governments can borrow for ten years at real interest rates of close to zero.
The problem with these proposals is that infrastructure spending takes too long to revive an ailing economy. In the United Kingdom, for example, policymakers have taken years to reach an agreement on building the high-speed rail project known as HS2 and an equally long time to settle on a plan to add a third runway at London’s Heathrow Airport. Such large, long-term investments are needed. But they shouldn’t be rushed. Just ask Berliners about the unnecessary new airport that the German government is building for over $5 billion, and which is now some five years behind schedule. Governments should thus continue to invest in infrastructure and research, but when facing insufficient demand, they should tackle the spending problem quickly and directly.
If cash transfers represent such a sure thing, then why has no one tried them? The answer, in part, comes down to an accident of history: central banks were not designed to manage spending. The first central banks, many of which were founded in the late nineteenth century, were designed to carry out a few basic functions: issue currency, provide liquidity to the government bond market, and mitigate banking panics. They mainly engaged in so-called open-market operations -- essentially, the purchase and sale of government bonds -- which provided banks with liquidity and determined the rate of interest in money markets. Quantitative easing, the latest variant of that bond-buying function, proved capable of stabilizing money markets in 2009, but at too high a cost considering what little growth it achieved.
A second factor explaining the persistence of the old way of doing business involves central banks’ balance sheets. Conventional accounting treats money -- bank notes and reserves -- as a liability. So if one of these banks were to issue cash transfers in excess of its assets, it could technically have a negative net worth. Yet it makes no sense to worry about the solvency of central banks: after all, they can always print more money.
The most powerful sources of resistance to cash transfers are political and ideological. In the United States, for example, the Fed is extremely resistant to legislative changes affecting monetary policy for fear of congressional actions that would limit its freedom of action in a future crisis (such as preventing it from bailing out foreign banks). Moreover, many American conservatives consider cash transfers to be socialist handouts. In Europe, which one might think would provide more fertile ground for such transfers, the German fear of inflation that led the European Central Bank to hike rates in 2011, in the middle of the greatest recession since the 1930s, suggests that ideological resistance can be found there, too.
Those who don’t like the idea of cash giveaways, however, should imagine that poor households received an unanticipated inheritance or tax rebate. An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s control. Although the gift may come from a family member, in financial terms, it’s the same as a direct money transfer from the government. Poor people, of course, rarely have rich relatives and so rarely get inheritances -- but under the plan being proposed here, they would, every time it looked as though their country was at risk of entering a recession.
Unless one subscribes to the view that recessions are either therapeutic or deserved, there is no reason governments should not try to end them if they can, and cash transfers are a uniquely effective way of doing so. For one thing, they would quickly increase spending, and central banks could implement them instantaneously, unlike infrastructure spending or changes to the tax code, which typically require legislation. And in contrast to interest-rate cuts, cash transfers would affect demand directly, without the side effects of distorting financial markets and asset prices. They would also would help address inequality -- without skinning the rich.
Ideology aside, the main barriers to implementing this policy are surmountable. And the time is long past for this kind of innovation. Central banks are now trying to run twenty-first-century economies with a set of policy tools invented over a century ago. By relying too heavily on those tactics, they have ended up embracing policies with perverse consequences and poor payoffs. All it will take to change course is the courage, brains, and leadership to try something new.
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Like I said, 'Absurd.'
It's just another cycle to keep societies calm now that almost have eliminated middle class, prepare for the next Financial Crisis:
"When money start to spread in the society 'above acceptable limits', we create financial crises to take them back. We dictate governments to take measures and apply austerity policies directing money back to us. We keep money valuable to everyone and secure our profits."
http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between...
As soon as hyper-automatization will be fully completed, the poor will be left alone:
"... the nation-state should be destroyed as the elementary mechanism required to protect the rights of the majority. Until then, the state will be used to distribute a minimum subvention to the armies of unemployed, so that the big banks and corporations not to be threatened by sudden and massive uncontrolled riots of totally desperate people."
http://failedevolution.blogspot.gr/2014/08/the-dominant-elite-ready-to-b...
CFR just serves the elites
attn peoples in da ghetto.... re-balance your portfolios ... less ripple and more colt 40 oz , smack to cocaine, saturday night special to fully auto uzi.... 4 baby momas to 9 baby momas.. drop top benz to Masserati Ghilbi fuck yeah...
SHOWS WHAT A BUNCH OF IVORY TOWER RETARDS THEY REALLY ARE....
hey rashid.. here come da $$$ choppa.... get the manpad... we be rich
LOL! Very creative, funny!
If your willing to pay $10.00 for that banana, I will give $11.00, and so on and so forth...
Free cash straight to the consumer? I gotta admit, this author had me at hello...
A fractional reserve system REQUIRES an expanding money supply for two reasons:
1) To reflate failing loans and thereby prevent debt contagion.
2) So that it is physically possible to pay the compounding interest.
Because the monetary inflation creates its own compounding rate at inception, to which is later added the compounding interest of bank inflation, the monetary base has to grow geometrically to keep pace, and inevitably fails when a new currency unit can no longer create an equivalent amount of economic activity.
This is all foreseeable at the outset of such a system.
When national currencies were the norm there were well-established ways to use the 'sovereign' power of government to default and dissipate debts so that the spiral could begin again.
Apparently it is harder to do in a global monetary regime.
Or at least they are not yet ready to press the monetary reset button.
I think we are well past the traditional definition of negative marginal utility of debt. This might be a teaser of what's to come, TPTB will for sure continue kicking the can in hopes of continuing business-as-usual.
Monetary off-sets (helicopter drops, global currency resets or whatever) will not force the hand of energy availability in the long run. Easter Island, here we come!
The 'new monetary re-set button' is the 'shit-storm' button. Flying turds splatter indiscriminately.
The Bernank did not allow for debt repayment with the extra cash, which would be prudent.
In my view, the way to handle this is for the Fed to pay "interest" to saver's on their money market accounts
in the form of crediting the saver's account with the IRS with a tax credit.
Program available to natural persons only.
Maximum savings principal applicable = $1.0 million per person
interest to be credited = 5%
less withholding tax (say 30%)
Retroactive for 10 years - 2004 to 2014 and beyond
Example: $100,000 in money market for past 10 years.
Annual interest = $5,000 x 10 = $50,000
less $1,500 x 10 = -$15,000
Tax credit = $35,000
==============
Program to be funded by cutting the skim of broker-dealers for Treasuries and other goodies for banks
===============
A lot of ways to criticize this thinking, but at a most basic level, people who conjure up these stupid ideas fail to realize that money is not wealth. Rather, it is a claim on wealth. If you create more claims on wealth out of thin air and distribute them, you have not increased wealth. Instead, you've created inflation. Which I guess is what central bankers want, so ...
Its a tax on those holding dollars.
Those holding assets and bullion are not as affected. The idea is to make people sitting on piles of cash spend it. Failing that, you give piles of cash to new, large groups of people, who will invariably spend it. A random distribution is much better than distributing only to lackeys, cronies, and the 1%, which is why it either won't happen, or will be highly restricted (handing out debit cards that can only be used in specific stores, or types of purchase?) IMO
Yes, keeping the medium of exchange circulating is the idea.
In Europe they confiscate funds in bank accounts (shoulda spent that) and make you pay to keep cash in the bank (NIRP).
If you want to save use gold, that's the way central banks do it (oh they use treasuries now but when those are shown to be useless and worthless they'll still have gold).
The medium of exchange is not the way to save. It screws up the flow of goods and services. Use a medium that was make just for that purpose...gold. Hoarding gold hurts no one.
Wow, this is so *ucked up. The bottom 80% will sure spend it, and that money will end up as extra profits on corp balance sheets. So, in other words, it will again go directly to 1%. Could as well just hand it to them directly. What we need is freaking employment for those 80% and we do not have it anywhere in sight because automation and outsourcing. We’re *ucked.
True. But this little ant will plow it into something of value as fast as she can, take a nice outing in her rickety boat and wait for the Big Caboooom.
Miffed;-)
I'm officially frightened. Soon, a roll of Charmin toilet paper will be worth more than a $100 bill.
Any economist with even half a frontal lobe would view the idea of handing out money en mass to be a sign of clinical insanity. Only a banker could conceive of such a thing.
The ensuing move by other countries to dump the U.S. Dollar would be vicious and fast. None of them would want to be the only one without a chair when the music stops.
I know which I'd be wiping my arse with. The Charmin will have value in barter....
Am I the only one here on ZH old enough to remember that scene in the original, 1968 version of Plant of the Apes, where Taylor yells out, "madhouse! It's a madhouse!"
Yeah, well...
No, you're not alone. I remember it well.
I actually liked that movie..
https://www.youtube.com/watch?v=VFCM6TZgTMI
Pump up the volume...of the ponzi...
https://www.youtube.com/watch?v=eGPhUr-T6UM
An American, not US subject.
Seriously. How many here knew that when QE didn't work, the next step was dropping cash?
It will trigger price inflation like the world has never seen. Take the money, buy gold, silver, goats, chickens, agricultural real estate.....
Then watch the world destroy itself. It already has a pretty good start. The pump is primed, as it were.
"That ain't workin' that's the way you do it
Money for nothin' and chicks for free
Now that ain't workin' that's the way you do it
Lemme tell ya them guys ain't dumb
Maybe get a blister on your little finger
Maybe get a blister on your thumb"
And if you're workin, that money came from you...
If they can get the velocity of money moving again, it will ignite the powder keg of inflation. Hard to finesse such things.
This would be great...right up until Peak Resources (especially fossil fuels, water, & soil) really takes hold and then all hell would break loose. Infinite growth on a finite planet; what could possibly go wrong?
http://olduvai.ca
Just make everything 'free.' Those who work get 'credits' for their work (we used to call those credits, money, or dollars). If you don't work you get fewer credits, but you still get enough to live on.
When robotics reach a certain point, and that could be sooner than we think - say 10-20 years - nearly all of us are going to be out of work anyway. So, everyone gets 'credits' based on some system or other. Otherwise, there's no one to 'buy' what the robots produce. Or, make it all free.
The next asinine step...take it motherfuckers...
LET THE FUCKING GAMES BEGIN!
Just another BS effort to move that bond money into commodities and equities. They will not destroy their precious dollar.
The irony is, you can't move money out or in. Old financial wisdom says, for every buyer is a seller. When bonds are sold due to high inflation expectations, somebody needs to buy them. Helicopter money will not create wealth, it will just redistribute wealth. Another old financial wisdom says, for every dollar of debt there is a dollar of savings. Those who are deep in debt will essentially rip off the savers, who are not only mainly Chinese, but US government workers. It's just another bull shit idea.
"It was Friedman who first suggested that a monetary authority can escape or minimize the effects of poor monetary liquidity by bypassing financial intermediaries (banks) and giving money directly to consumers or businesses. He called it “helicopter money,” creating the image of a central banker dropping money directly onto businesses and consumers in times of economic stress. Bernanke, in a famous 2002 speech, (in which he also claimed deflation couldn’t happen in America) referred positively to Friedman’s concept as a viable one for fighting deflation. That speech is where he got the nickname “Helicopter Ben”.
But when the time came that the Fed’s helicopters were actually deployed, the Federal Reserve and the U.S. Treasury, instead of “bypassing the financial intermediaries,” gave the money directly to the banks and financial institutions leading to accusations of bailing out their friends instead of the consumers."
http://www.globaldeflationnews.com/the-keynesians-and-helicopter-ben-ber...
Let's have a show of hands of all the OldFarts who used to have "Conservative" economic orgasms when thinking about Freeman's "THERE AIN'T NO SUCH THING AS A FREE LUNCH" book.
Who the fuck is this Freeman fella you speak of?
Because that's when he remembered he is Jewish.....just sayin
CFR = Council of Fucking Retards
Sounds good to me!
If anyone believes any of this they are truly fucktards, it's not what you make, it's what (the government) allows you to keep.
Damn, the power of words
George W Bush sent checks to everyone and we were out of the Great Recession lickety split.
This reads like a piece from the Onion.
Following this to its logical conclusion, why bother having anyone work or create anything of value at all? We can just have a central bank hand out cash to people to spend. No more unrest or recessions to deal with, evah!
Didn't Marx say something about capitalism destroying itself and the end stage being when nobody actually works or produces anything any more and TPTB try to run a completely financialized economy that essentially doesn't do anything but shift money around?
ding ding ding! we have a winner!
who on ZH isn't all for bringing the reset forward that much faster?
https://www.youtube.com/watch?v=9jK-NcRmVcw
Welcome to full retard. Bravo to our central banking overlords, at least you've finally discovered the courage to stand up and admit:
"Yes, we are moronic, worthless cunts. Please accept our apologies by letting us destroy the world with one final death blow."
If changing up for bullion, as you absolutely should, do it with the first helicopter drop. Odds are that the price of everything everywhere will be inflating well out of fucking reach after a month or two.
"There is another way: instead of trying to drag down the top, governments could boost the bottom. Central banks could issue debt and use the proceeds to invest in a global equity index, a bundle of diverse investments with a value that rises and falls with the market, which they could hold in sovereign wealth funds. The Bank of England, the European Central Bank, and the Federal Reserve already own assets in excess of 20 percent of their countries’ GDPs, so there is no reason why they could not invest those assets in global equities on behalf of their citizens."
After hitting the above "agenda" statement, I stopped reading. Another gift to the Wall St. scum sucking filth. Just like our 401k's. Fuck the money changers and their .gov puppets. Anytime they appear to be doing "God's work" by helping out the common man..........bend over.
*Nervously continues stacking*
I am for anything that puts some extra money in the little guy's pocket IF IT IS TIED TO TAX RELIEF FOR THOSE WHO ACTUALLY WORK FOR A LIVING. Cutting tax rates and giving tax credits are the only 2 things that are fair to working people who want more money in their pockets. Welfare, 90% of all other social benefits and corporate tax breaks for the big boys do not help the little guy who works for a living. Let's help the little guy for once. Democrats would never support this concept because they are captives of the FSA and a big portion of the FSA does not work, hence they don't like tax cuts. But smart Republicans could run on that platform because there are a hell of a lot more little guys than rich people who vote. The problem is they would first have to be smart enough to understand they need to abandon Big Business and start helping the little guy if they want to survive the shift in demographics in this country that is being compounded by illegal immigration/amnesty.
Which political team is supported by the FSA getting loot from: Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-Ed, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState?.
Democrats lead by Soros and Buffett
I understand your point but you are missing something. The ONLY thing that counts is votes. Do something big for the little guy who works and you have a winning formula irregardless of which party they prefer now. Of course cutting taxes would make the deficit worse, assuming spending will never be cut, but the BENEFICIARIES of this tax-cutting largesse would be the little guy who works and frankly that's the only person left in this country I care about. The political war would be between the little guy who works and the FSA. There are about the same number of people working that are on the dole. But cater to the working class with some serious tax cuts and they will fuck over the FSA every chance they get.
Yeah but, the "working class" doesn't exist (anymore) as a single entity as the current political teams already have "the working class" carved-up into their fiefdoms. You are right that the Red Team would have the best shot at this BUT they'd need to abandon (as you said) their existing political sponsors. That would be a really risky move on their part, and I doubt they could actually succeed in capturing "the working class". Reagan was the most successful at creating the bullshit about being for "the working class"; but most of the bullshit was directed at the White Trash trying to "get even" with "those people" so it was really a divide and conquer technique.
The "working class" have always been easily manipulated by sociopaths creating bullshit. That's the problem that all "working class" parties have: the other parties can quickly create new bullshit for the dumbasses too.
richsob - I hear you, and while I don't disagree, I do think you are fanatasizing. Taxation is a source of power, and power will not be relinquished between our corp/gov masters. The FSA will continue with bread and circuses, and you, my dear tax slave, will continue your plight unless you prefer jail, joining the EBT masses, or choose to live like Robinson Caruso.
You could be right. But I have a hunch we are going to see a Populist presidential candidate sometime in the future who is going to see the light and will tap into the resentment working people have in this country toward the parasites who are steadily increasing the ranks of the FSA. It may be too late by the time that happens (hope it isn't!) but at some point the bitterness and fatigue will give a smart politician enough tender to ignite a groundswell of passion for a policy of "cut the damn taxes...NOW!" By that time there will be God only knows how many free loaders sucking the life out of this nation's existence but that kind of political movement is bound to come at some point. My Dad frequently said "If enough people would just not file their tax return on April 15th it would scare the shit out of the politicians.....especially if on April 16th the people took to the streets demanding lower taxes. They can't throw all of us in jail". Not filing tens of millions of tax returns would be a hell of a wakeup call for the politicians....especially in an election year! I know lowering taxes would play hell with the deficit but I'm past even caring about that anymore. Nobody is going to stop spending so why not let the little guy who works at least get something while the getting is good, or put another way, until this thing blows sky high?
TPTB have chosen to simply print our fiat currency at will to continue business as usual, while many work their lives away for the same currency to barely scrape by. Collapse is all that will loosen that grip.
I pay taxes only because I'm under duress - current taxation is pure extortion. I do not want to be robbed, kidnapped or murdered - all of which is possible if you don't pay (fines, sent to jail, or shot if not willing to be jailed).
And unfortunately voting is simply exercising your rights at this point, less effective than exercise in general. Who counts the votes? Have you looked at your precinct vote tally? And if you write someone in, do they count that vote?? The standard choices given are choices between dog shit and horse shit - and that is purposeful. Chose your own, and see if they count it.
Now who will really benefit here?
Note that they do not advocating taxing the top 10% as "this wouldn’t work".
How to fund? Buy stocks, and then distribute the proceeds!
Meaning - stocks will go up. Meaning, the 1% will get even wealthier. These guys make it sound like its for the little people, and yet the 10% will again make out inordinately. Talk about gaming the system, they are fucking evil geniuses.
Viola!
Wait a gosh darn minute. I thought we were in a booming recovery, at least that's what the teevee tells me. . Why do we need to be dropping money if that's the case?
It is 'almost' fixed...not completely fixed. The 'almost' allows them to brag about how they are fixing things. The not completely part allows them to continue to wreck things and enrich those close to the top....so get xome political friends, suck up and move up.
Japan has bowing machines. It teaches you just how low to bow.
Finally....
I can get some hookers and blo.
I lived in Australia when the crisis started 2007 and 2008. As soon as the Government learned about the coming crisis, a few days later everybody received something like 990 dollars into his bank account.
Australia avoided the worst of the crisis at that time.
If Bush wanted to avoid the crisis, he would have had to print and give 1000 times that amount and give it to each individual. How much has been given to banks for the non-performing MBSs and loans? How much QE? And (gasp) how much will come flowing back in as the dollar is no longer needed as a settlement currency?
My head hurts. These criminal asshats actually published this absolute insanity....and quite literally promote it as no big deal, no risks, good for the little guy, etc. Pick just about any sentence in this written puddle of blown-groceries, and you can easily take apart the supposed 'logic', or immediately see how this is geared entirely towards benefitting the same demonic hellspawn that run the show this very moment. Honestly, these supposed masters of the universe should just quit fucking around pretending to be our enlightened intellectual superiors and just declare Global Government So Fuck You Peasants. Seriously, word it just like that and be done with it, you vile slime-slurping corpulent masses of diseased fecal-matter parasites.
Well, don't forget, it will be repacked with MUCH better bullshit when sold to the dumbasses. The dumbasses will love it.
Polictics provides the forum which the smart-n-savvy people use to manipulate the dumbasses with bullshit.
Ace;
Why don't you stop these mealy-mouthed equivocal posts and just say what you mean?
You're right, of course. I was trying to be as polite as possible. :)
You succeeded quite well ;)
Can you imagine how convinced powerz are in their controls, "tools", ability to manipulate markets/people/nations when somebody can even say such a stupidity ... it's clear now, I am calling PEAK POWERZ. Wild rollercoaster years ahead
Great. Gimmie cash. Ill buy more of the 3 b's
If I was chair of the fed, I would suggest the idea of a national lottery with say around 1,000 needy or deserving individuals. The game is to drop a million dollars somewhere in the US, and give each contestant an unlimited credit card for expenses. Then everyone has say 5 days to locate the cash from clues given on the official lottery website. Then, it can also become a national reality TV show and generate income from advertising.
.
yeah, lets give the state complete control over our lives. Let it be the determinant of those who get money and those who just exist...wait..we already do...almost.
Running Man
I can't tell if you're joking and that's hilarious or you're being serious... how about instead we just reward them for something that's actually interesting like their singing talent and call it American Idol, and not get the government involved at all.
"But... But... We were just helping the poor people, it's not our fault they caused the global markets to dump their treasury bonds creating hyperinflation of paper money and forcing us to issue this NEW global currency"
Gold bitchez
Oh my, super-duper inflation!!!!! Just what the banksters ordered. End game.
Call me Zimbabwe Yellen.
Well, maybe if all the dough they have given to the Banksters up till now had gone directly to Mom and Pop Main Street, maybe things would have gone differently.
If I shoot down the money copter before they spread the money, do I get to keep it all ???
I guess the parasitic morons read ZH.
Maybe God accepts money drops in lieu of a Jubilee.
The air is nice and still above my house, a perfect spot for a money drop.
The effects of this have already been pondered.
https://www.youtube.com/watch?v=Fg6J1Skptbs
Presently about 50% of my "income" goes to one government entity or another, between state, Federal, and self employment taxes.
As a starting point to help our economy, how about we just stop all foreign aid, intervention, warfare and reduce taxes accordingly? That would benefit the U.S. as a whole, but it is not going to happen because DC is under the control of a few special interest groups who benefit from the current foreign policy. No one else here does, but then we are just average citizens.
"Taxation without representation" appears to very well describe the current situation.....we pay the taxes and our government is managed by a few special interest groups. Why else are we in the ME????
Go long on helicopters.
You want your hyperinflation you can have your hyperinflation.
These sociopaths will do anything to keep their game going.
-
When is their next full attendance meeting?
They can start the $ drops in Cali. where Gov. Moonbeam just fucked the state even deeper into the shitter with this.
Gov. Jerry Brown to Mexican Illegals: 'You're All Welcome in California'
Why the ef not? They've already printed so much of it that it's all but worthless now. Maybe they should try printing stocks and bonds and hand those out? Oh, right, that would dilute the financial assets of the 1%. Better to stick with cash so only the middle class pays this "tax."
Bush already pioneered mass mailing $300 donations for the cause. Oh... that was built on the citizenry financing with debt.
Maybe Treasury will bill the Fed $100B for the mail list. Recoup a little from previous Fed follies.
The main message is that our current monetary system is failing.
The new one is the main topic fofoa has been discussing for 6 years now. I think it is ready for action and just needs a failure of the current one to happen.
It will cause the medium of exchange to be different than stores of value (of which gold will be the best). Currency will be made un-tempting for long tem storage and therefore money velocity will not fall. Gold held by savers as they wish to make purchases can be bought by new savers and the currency keeps flowing.
It's a tad more complicated but it has been very rewarding and enjoyable to consider...and I trust profitable.
I guess now it's time to give a bit of cash to the peasants
We must be at the end of the cycle
Ummm....aren't we doing that already thorugh SNAP, EBT, and all of the other "assistance" programs at both the Federal and State levels?
still digesting the piece, but on the surface the idea makes sense. it's a step towards universal basic income, which would be a positive change for all society.
BBC Radio interview with Mark Blyth:
Foreign Affairs Article Discussed on BBC Radio this MorningBBC did a very nice 18 minute program with Timothy Spangler, Anat Admati and I this morning. The link is here:
http://www.bbc.co.uk/programmes/p002vsxs
background on the authors:
via Guardian circa 2010:
via Brown U.
more @ http://www.markblyth.com/
If every human on the planet were given $1 million each, within 5 years the 1% would have 90% of it all again - it's just the nature of things.
sounds like the thought process of a tired old SOB living a modest but good life ;-)
The people in the 1% may change, but the 1% will wind up with the money - they always have. So, I rest my case on what history has shown is the way it always ends up - regardless of whose in the political power seat. Even happened with the Greeks and Romans, Egyptians, Chinese - it's just the way things are. Yeah, 'modest, but good life' - if I have complaints, I now address them to myself from wence they came. Good luck, friend.
just because we always have breathed in oxygen and exhaled carbon dioxide, doesn't imply it will always be that way.
on a long enough timeline...
True. Nothing ever changes the same. But, using history as a model it appears fairly certain.
(That should be 'whence' not 'wence.' My spelling has always been poor.)
Usury should be banned, so the competition would become a little more fair
Educate yourself: http://ellenbrown.com/
THE PUBLIC OPTION IN BANKING
I agree and disagree. If you gave everyone making say under 100k 100k, however you sort of staggered it down or up... if things were business as usual, it is a complete horseshit idea, good for a temporary, superficilal jump in GDP and $ velocity and all that shit...
but ultimately you'd have the top owners of capital having the most owed to them, and the feds would simply tax more and spend even more.
HOWEVER - if something like this was done as some form of debt jubilee for the American middle and working class... look, I get the basic arguments about the downside, but there might be more upside there, IFF people stopped spending more than they have or can easily repay. "Credit" and the abuse of it lay at the heart of the matter every bit as much as greed, stupidity, and the basic maths of the compound interest function.
So in the real world, it may simply be a hopeless idea....
Even ideally, in the world where people stop buying iShit on their AMEX and tricking out their Dodge Neons - a world in which Anarchism works... until the issuing power is restored to the people, the government itself, it's all just another way for the large banks to rape productive labor and get their chicks for free...
That should get money velocity from zero to inferno in about 2.5 seconds.
LMAO. Authoritarian Banks cannot print productive work.
Money comes from banks like milk comes from cartons.
"Authoritarian Banks cannot print productive work"
Exactly the point. Like dropping a few bags of rice among starving people. It will last a while, what happens afterwards?
Moar drops. Until they're dropped-out!
the higher you go on the food chain the more inflation benefits you. i mean, how is the sandp going to get to 5000?
To think whatever they give the money will instantly be devalued by that amount.
The factories overseas in China, Korea, Vietnam will mainly be stimulated.
A sugar high. Once spent it's more debt. Non-productive for the US.
So the jews want to create more money out of thin air and give it to us "free"? Then we are further in debt and pay the "free" money back with interest. Did I miss anything?
this is what you will get, all debt will disappear
https://www.youtube.com/watch?v=WI1i5yhwOz8
Utopia! (Nowhere)
How about we take a more sensible approach:
1. Term limits for all elected officials.
2. Reduce the size of government by 75% at all levels.
3. Reduce taxes taxes to about a 8% flat rate.
Call it a day and watch the economy grow. No whining or crying or complaining or "but but but" crap. These three line items would solve the problems.
1. Term limits don't stop big money from buying elected officials and it does nothing to stop the Washington-Industry revolving door.
2. Reduce the size of government? I guess that depends on what part of government, right? And now that you have even more people with no jobs expect wages to drop even more thus lowering demand for goods and services even more.
Will we get rid of air, water, and food regulators as well? Awesome. Can't wait to see that hell on earth.
3. Get rid of the progrssive tax system and impose a flat tax? So you would instead of increasing taxes on dividend earnings and capital gains would reduce these taxes to 8%?? That will generate even more wealth inequality making the poor poorer and the handful of middleclass extinct. Great idea!
Did you hear about the effect wealth inequality has on GDP growth?:
http://www.nytimes.com/2014/08/06/upshot/alarm-on-income-inequality-from...
what about the 1000+ USA military bases around the world? Are you gonna close them? How about all those wars USA keeps on starting aroudn the world? Will they stop? How about all those military contracts? Them wars cost trillions of dollrs you know. It's alseways nce tot alk about flat tax rate but the real problems are all the wars USA is conducting and all the dark stuff CIA is doing around the world. What about all those money USA keeps on giving Irsael, Egypt, etc? Will they stop? I';d LOVE to see Israel trying to survive on its won, without USA's wealfare.
Simply put:
Step 1) Business does not pay consumers enough to keep the economy going= demand side weakness.
Step 2) Taxes on Business redirected into consumer pockets then corrects demand side weakness.
This won't work unless taxes are raised at the top and import Tariffs imposed to foster domestic job and wage growth. Europe needs to plan this out just like the Chinese are doing.
Can you ignore step 1, dear libertarian low-tax maniacs? How long can you hold your breath and why should you?
We have been paying only half measures to this problem and now wealth inequality is crushing economic growth. The few adults in the room see we either fix the system or we implode. So no, step 1 must be addressed.
Wealth Redistribution must happen at some point. The question is not "if" but "when".
And how?--> Taxation, Confiscation, Inflation or Revolution. Pick your poison.
I chose: 1) eliminate the tax code. 2) Implement consumption taxes. 3) Print money out of thin air if revenue dips in tough years.
If we are going to do Keynsianism, we should do it right, implementing his "red letter" instructions. The "black letter" occult "taxation only needed as a method of social control" stuff was only put in there because it pleased him and the elites. It is not required, niether are they.
Wise, we have a toxic level of wealth inequality. Year by year it is getting worse. The increased rate of this inequality traces back directly to tax cut policies starting in the 1970s-1980s.
Only the deus ex machina event of the Tech revolution under the Clinton administration kept us all afloat despite the rabid tax cutting. That phenomena could happen again but can we really plan on it? What miracle new industry do you see on the horizon that will unlock all the wealth in this system? I frankly cannot see it.
And when you choose consumption taxes it sounds so simple! But really, you have eliminated any possible mechanism to keep this monopoly game going. The poor and the rich will be all that we have left.
Regarding printing money out of the air, you are saying "reset" with rampant inflation when the moment warrants? Who will get this printed money if not the wealthiest?
Really, I think your plan inevitably ends with violent revolution or a police state. Keynes wept.
In paragraph #1 you say that we have vast wealth inequality, then in paragraph #3 you say consumption taxation will create only the poor and the wealthy. I admit to being a fool, i guess because I do not understand smart econ folks.
We already have federal, state, and local consumption taxes on all nessecities of life: food, shelter, energy, water. That is why the Fed excludes these things from all metrics.
Eliminating progressive income taxation takes away the massive incentives for the poor to stay "poor" while at the same time they stay over-medicated, over-sexed, over-educated and overfed (obesity) Implementing universal consumption taxes that affect the elite will curb vast overspending on things like wind farms, solyndra, tax inversions. It will also take the burden off of poor soles like John Kerry who needs to keep his 11% tax rate by doing things like mooring his yacht in Rhode Island instead of the state that paid his cradle to grave income and allows him to start wars all over the world. Which, to answer your question, should be the only reason the government prints money. To fight foreign wars. The people will accept war bonds or they will accept war inflation, or they will maybe provide a limit to violence.
Fool, yes but not wise.
Here you go:
The poor spend ALL there wealth so every penny they earn is then taxed under your scheme. How is it that you could not have considered this? How old are you that you have never taken a moment in your life to already have answered this for yourself?
SO you let the richest among us acrue untaxed wealth and think that this is a good thing? Where is your fair society that exists for creating a better future when such a system would come to be? Or is your generation the last one given a chance and so you pull up the ladder? Fuck...what an attitude some of you psychopaths have these days.
Incentives to stay poor or become poor? Is that serious? Are you twelve? Fools and idiots might actually buy that shit but I con't think of anyone who is a real person actually attempting to argue this to me. As a former Young Republican I say you are nuts.
We are so many miles apart in our understanding of the world I think that I cannot salvage you from yourself. You are on your own. Good luck.
Relax. You seem to be overdoing it a bit. I don't think you understand that an 80,000 page tax code is critical to implement crony capitolism. It is also the only thing that made the elite you hate so rich. For example, with todays news, do you understand how warren buffet became the richest man in america? He financed the Burger King tax inversion. He has been doing this for his entire life. His secretary pays a higher tax rate than he does. If this example does not help "salvage" my reputation with you, I am not too worried about getting your help.
Granted but that doesn't make your initial "tax solution" any more fair. This 80,000 page tax code problem is an example of the "Legislative Welfare" that the rich have manipulated out of the system using "legalized methods" that they have manipulated into the system. These "special interest" tactics of the wealthy is what has established the inequality in the system which serves to easily maintain their wealth rather than having to put it to real functional risk to gain further reward which means more ability/power to further game the system. Thus, the optimal solution is to destroy the hierachial system that has been recreated in the "Colonies" since the end of the Revolution and to do so will require not only require a strengthening of the middle class but necessarily squeezing the wealth gap. This is done by tax policies that bolster the middle class AND ones that reduce the ability of the uber wealthy to use the system (in this case the Tax Code) they've manipulated into being used as a way to exceed the wealth velocity of the average person with no additional effort. Thus, the best way to prevent this is a Progressive Tax AND an Estate Tax which still rewards income growth but limits the benefits of what compounding growth and beneficial gov't policies do to create uber powerful individuals/families. This tax code could be written in less than ten pages and the effects would certainly be more in line with what the original founders dreamed of when they escaped from the type of system that has been reengineered today.
Of course, today this country is in the death throes just as England was back then where the elite will stop at nothing to maintain their right to rule and maintain their wealth/power status at the expense of the common people. These narcissitic psychopaths have proven that there is no limit to how they will destort/destroy the system to maintain status quo to prevent removal of their special interest benefits that have permitted the growth of an 80k page tax code and a financial system that can never be allowed to work without the discrediting influence of the Fed puppet masters because of the systemic cancer of corruption constantly deforming it's bones. The most worrisome thing is that they usually do their most selfish evil right after they pacify the masses with a little bit of monetary sugar that is later stolen from the masses through inflation. Does this mean, they're about to go full out psycho now in completely killing the middle class to save their system?
Crony Crapitalism is a seperate issue that we will most likely find common ground on.
Fool, I see that you think in simple terms. You think of Jesus carrying the cross and want someone like Warren Buffet to do the same.
Frankly, you need to grow up. Buffet should and will take advantage of the system as it exists until YOU AND I change the system. Was that complicated?
WTF is this BS ,This Author is dreaming big
Are you kidding? That ain't no dream; that's an eff'n night-terror.
http://www.climatechangedispatch.com/images/pics5/cartoon-obama-your-mon...
I actually had to follow the link to the original article because I was so astounded at the stupidity of it, AND THERE IT WAS.
So, who are these guys?
Mark Blyth
Mark Blyth is Professor of International Political Economy and faculty fellow of the Watson Institute for International Studies at Brown University.
Mark Blyth | Watson Institute for International Studies
Eric Lonergan
Maybe this guy?
Eric Lonergan | Washington Partners
Maybe?
Here's a comment from the article by Mr. Lonergan himself:
Eric Lonergan Donald T • 3 days ago
Hi Donald, We are not taking money away from anyone, or creating inflation. 1) we are increasing spending by allowing households make spending decisions. This is financed by central banks creating money. This is not inflationary when there is high unemployment and low inflation/deflation - a point Milton Friedman and JM Keynes agreed upon. 2) we are advocating broader equity ownership: Investors are willing to lend to governments at negative real interest rates. So we are suggesting governments issue debt and buy equities and distribute it to households. Combined, these policies should create wealth (if output is higher, so is it's present value (wealth)), and broaden the ownership of capital. All with NO change to taxes. We are also v critical of the "bubble-dependency" of current policies. By granting central banks the power to make transfers directly to households, interest rates would be less volatile and asset price distortions less likely.
Ever increasing centralization is the cfr's agenda.
" An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s"
BS,,,, The difference being it WAS EARNED by someone unlike their printed fiat. Stand by for mass inflation and will kill off any surviving savers if this shold become the mindset which seems to be their goal.
Comparing Apples to Oranges.... as usual.
R
Birthday and Christmas presents have not been earned by the recipient therefore .gov has the right (and the duty) to confiscate such unearned wealth. Tsk, tsk.
This article was a spoof. Right?
Hell no. Its the CFR. Let me make this real simple for everyone that seems to be missing the point.
1. The top 20% own 70% (whatever) of all stocks.
2. NO TAX ON WEALTH.
3. Government issues debt.
4. Uses proceeds to buy stocks.
5. Stocks go up. Way up.
6. Wealthy benefit BIG TIME. see # 1.
7. Peons get table scraps.
8. Make is sound like its all for the little guy - priceless.
Side note - stock volume is down 70% since 2008. Market is essentially DEAD (no normal market goes up 50 - 70 points every morning and just sits there. all day. day after day.) This strategy gets the volume flowing again.
Someone tell me how this works without real demand?
A stock market financed by debt and collateralized by paper gains?
Sounds like more QE spending to me.
please drop off some cash in my back yard ill use it to spur the economy by buying gold, silver and paying off my student debt. Thank you.
My favorite, the cash register game. If you have ever bought your kid a toy cash register and played with them, it is a fun game for 1 cycle.
You have money, kid has cash register and goods to sell.
You buy goods, kid takes money and makes change.
You have no money and kid has no goods, game ends.
Use some real groceries with that game and don't neglect to charge for the meals prepared.
You will be amazed at the economic wisdom of a five year old!
If they could drop jobs from that helecopter that would fix the problem.
They expect the money to be used in the following manner?
"For example, beneficiaries could be required to retain the funds as savings or to use them to finance their education, pay off debts, start a business, or invest in a home."
The unemployed may be hard pressed to participate in the plan.
This is simply Agenda 21 being implemented.
It's Feudalism.
I trust those Nigerian scam emails more than these chimps
Currently this program is only available to certain people.
Like I needed another reason to keep the engine in my boat tuned and idling.
https://www.youtube.com/watch?v=7BDBzgHXf64
Hand people money or legalize looting or both.
Decision is made: Both (but only for a few)
Where is Jon Corzine ?
We could in theory turn this into a reality TV show called "The Yellen Games" and lowly serfs have to battle over the helicopter full of cash.
tax the shit out of everyone and then give them a bit back
this is how the socialists do it - training the masses into believing they are getting something
The New Jersey property tax model !!!
6 years ago, before the MSM even admitted a problem was brewing (much less already very much in progress), I said the US Elites weren't serious about dealing with what was happening. This is an existential crisis for finance capitalism. When money is abstract, money is a commodity in and of itself, money is debt and debt is money, and every transaction is based on lending at interest, you have to have infinite supplies of money, energy, resources, and markets. Everything has to always expand forever. If not, who would take on debt at interest? You have to be certain you will more money in the future to take on debt at interest. If you're not certain of that, you won't do it, and the whole system collapses. Likewise, if we run out of continents to extract resources from, or everyone with enough money and a place to plug it in alread has a refrigerator, or if energy stops being so cheap as to be basically negligable in cost calculations, the whole system collapses.
For a while, you can keep up the illusion by exploiting the fact that money, being abstract, can be made infinite. But eventually everyone catches on and that doesn't work anymore. Real growth ends, but the accumulation of debt continues and is compounded by interest, while incomes stagnate and decline for work. The only profitable enterprise becomes ownership of debt, and anything that actually does anything fails.
The reason I said 6 years ago that they weren't serious, was because if they had been, they would have spent the $15 Trillion or so they've spent since then (if you count QE, ZIRP, various buy-backs, etc) to give every man, woman and child of the 310,000,000 in America roughly $50,000 USD. Not one penny to the banks. Straight to people, regardless of tax status or wealth. People would have used that to pay off debt, and the whole mortgage/debt crisis would have been ended right there. Of course there are other consequences to doing that, obviously.
But if they were really serious about rebooting the system, they had to get rid of the accumulated bad debt at interest. Then we have to come up with a system that doesn't rely on infinite growth. But clearly, they were not serious about fixing the problems inherent to our system. They may not have even perceived them, and are only now slowly realizing what is going on and why half-measures haven't worked. Pumping money through the banks in exchange for worthless mortgage-backed derivatives is like running plasma through a corpse. As we have all seen for the past 6 years. Without organic demand, from the bottom up, none of this really works, despite what the supply-side snake-oil salesmen say in their own short-term interest.
This won't work either, because they won't really do it, or they'll do it in such a way that actually transfers wealth from the bottom to the top, while functionally transferring all existing debt from the private sector to the public sector. The debt has to be expunged, not exchanged.
Too little, too late.
- Ben Bernanke, Deflation: Making Sure "It" Doesn't Happen Here, November 21, 2002
Something from nothing.
This is the geratest idea since ????
No more work ... we all become rich bankers.
No more poverty ... we all become rentiers.
No more deflation ... we can all go to university
No more begging for money for a cup of coffee ... just begging for a cup of coffee.
Hurry ... make it happen.
"Something from nothing.
This is the geratest idea since ????"
Plato's theory of Forms is where this anti-concept originated.
Just as Plato's Forms are the imitation of reality, so too is banker's counterfeit the imitation of productive work. Both are false since something cannot come from nothing; something can only come from something.
swnguy - Very succinctly written. Well done. And the conclusion is ... domestic violence and foreign wars... outlawing the ownership of PMs ... does America go the course of Rome or.. does the Constitution stand? Lotsa people perish if it does.
put cash in my fuckin bank please...i will turn around and pay down some debt with it.
guess what homies, inflation is GOOD for the market and real estate...all real assets will go up in nominal value...savers and lenders are screwed...but then what's new
Free money for everyone.
How will this read on the double entry accounting system?
Will I be a debtor or a creditor?
I used to be called a customer at my bank, but if the financial pages are correct, I'm now a creditor not a customer.
A creditor who could get bailed in at a moments notice.
It's not inflationary as long as they keep lying about the increase in the rate of inflation.
You were always a creditor of your bank.
Double entry accounting is based on the erroneous idea that money has a fixed value.