We're All In This Together .....

[Beef Oven!]

http://www.ft.com/cms/s/0/51990d4c-7...#axzz3NMz8zqa4

interesting take on various economic matters.

the answer would seem to be to give more spending power for those with modest means, instead of QE to shore up banks balance sheets and asset prices. Now who would have thought.......

The answer is to give spending power to all people who are actually going to spend the money in the economy, rather than the groups and organisations that will use QE to 'finesse' their accounts.

[teamsaint]

The answer is to give spending power to all people who are actually going to spend the money in the economy, rather than the groups and organisations that will use QE to 'finesse' their accounts.

fair enough, I suppose,but pretty much what I was saying?

I am less clear about whether there really is a technical need for QE at this point, although the banks clearly love it in any case.
The major problem currently seems to be stopping deflation.

(I don't think they had invented QE when I did A level economics !!)

[Beef Oven!]

fair enough, I suppose,but pretty much what I was saying?

I am less clear about whether there really is a technical need for QE at this point, although the banks clearly love it in any case.
The major problem currently seems to be stopping deflation.

(I don't think they had invented QE when I did A level economics !!)

Yes, pretty much what you said, except it seemed like the salient issue for you appeared to be modest earners, rather than all the people out there who are willing/able to spend.

[teamsaint]

Yes, pretty much what you said, except it seemed like the salient issue for you appeared to be modest earners, rather than all the people out there who are willing to spend.

" Modest earners" was meant as a bit of a catch all, really, ( ie those with a low savings ratio).

what would you see as the most effective ways of putting this money into the pockets of the group that we broadly agree on?
Might include...higher minimum wage ( which might be one way of reducing the effects of the decreasing contribution of the corporation tax)... increased cash benefits......reduced VAT......but tax cuts are a problem with current tax flows into the treasury......

Perhaps there are ways of allowing excess demand to use up excess capacity.....an example might be free/ more highly subsidised off peak public transport for all, allowing cash to be spent on other goods and services.

[MrGongGong]

I'm not an economist
BUT surely the way to "stimulate" an economy by giving away money is NOT to give it to the banks at all but rather give it to random people IN CASH, giving random people £500 (or something like it) would mean that they would actually DO something with it, buy stuff, go out and eat, travel and so on.

The lack of awareness of the whole psychology of these things amazes me at times.

[Flosshilde]

I can't remember the figures, but I think that if, instead of giving it to the banks, the money used had been divided up between the whole population each would have had a substantial sum. Yes, the rich would have benefitted, but not, proportionately, as much as the poor. Yes, some would have gone straight into savings (which would have helped the banks), but much of it would have been spent, helping the economy.

[Beef Oven!]

" Modest earners" was meant as a bit of a catch all, really, ( ie those with a low savings ratio).

what would you see as the most effective ways of putting this money into the pockets of the group that we broadly agree on?
Might include...higher minimum wage ( which might be one way of reducing the effects of the decreasing contribution of the corporation tax)... increased cash benefits......reduced VAT......but tax cuts are a problem with current tax flows into the treasury......

Perhaps there are ways of allowing excess demand to use up excess capacity.....an example might be free/ more highly subsidised off peak public transport for all, allowing cash to be spent on other goods and services.

I've always been in favour of enabling people, rather than giving it on a plate, so I agree with cheap state-subsidised public transport, subsidised child-care, VAT down to 10%, Minimum wage of £8.70 per hour (£10 in London), take the lowest paid people out of tax altogether with a £16k universal free-pay. Paid for by collecting all taxes due, eliminating waste from the public sector (including welfare), trimming foreign aid and leaving the EU political union!

[Beef Oven!]

I can't remember the figures, but I think that if, instead of giving it to the banks, the money used had been divided up between the whole population each would have had a substantial sum. Yes, the rich would have benefitted, but not, proportionately, as much as the poor. Yes, some would have gone straight into savings (which would have helped the banks), but much of it would have been spent, helping the economy.

That's what's supposed to happen!

(perhaps not literally!)

[Flosshilde]

I think the idea is that if people were literally given the money, rather than it being given to the banks, it would have provided a far greater boost to the economy. The banks have done nothing with it - not increased lending, which they were supposed to do, which would have put the money into the economy.

[ahinton]

I've always been in favour of enabling people, rather than giving it on a plate, so I agree with cheap state-subsidised public transport, subsidised child-care, VAT down to 10%, Minimum wage of £8.70 per hour (£10 in London), take the lowest paid people out of tax altogether with a £16k universal free-pay. Paid for by collecting all taxes due, eliminating waste from the public sector (including welfare), trimming foreign aid and leaving the EU political union!

Much of this makes good sense at first glance. The only issue that immediately occurs to me is that, were these things to be funded (or indeed even fundable) in part by "collecting all taxes due", there would likely be a simultaneous thrust to ensure that all overpaid taxes were reclaimed and refunded, which would almost certainly take a fair amount of the wind out of the sails of such a project; likewise, if "eliminating waste from the public sector (including welfare)" were to include (as I presume you would expect it to do) a successful clampdown of welfare fraud and administrative errors that result on benefit overpayments, I would anticipate a similar thrust to ensure that all benefits to which people are entitled be applied for and paid out in full, which would have a similar effect. I do not, however, share your view on UK leaving EU and, mopre importantly, I do not see this as saving any money at all; indeed, its net economic effect might well be negative and what would happen if other EU nations did the same?

[Beef Oven!]

I'm not an economist
BUT surely the way to "stimulate" an economy by giving away money is NOT to give it to the banks at all but rather give it to random people IN CASH, giving random people £500 (or something like it) would mean that they would actually DO something with it, buy stuff, go out and eat, travel and so on.

The lack of awareness of the whole psychology of these things amazes me at times.

Seems people agree with you.

[P. G. Tipps]

I'm not an economist
BUT surely the way to "stimulate" an economy by giving away money is NOT to give it to the banks at all but rather give it to random people IN CASH, giving random people £500 (or something like it) would mean that they would actually DO something with it, buy stuff, go out and eat, travel and so on.

The lack of awareness of the whole psychology of these things amazes me at times.

Sorry to be a party-pooper amidst the farewell-party consensus but what happens after all the money has been spent on foreign holidays, cars, fancy smartfones etc and all the banks have gone bust ... ?

[teamsaint]

Sorry to be a party-pooper amidst the farewell-party consensus but what happens after all the money has been spent on foreign holidays, cars, fancy smartfones etc and all the banks have gone bust ... ?

consumption ( and keeping money circulating) is the whole point of the exercise......

here you go...

https://www.youtube.com/watch?v=9GorqroigqM

The banks won't go bust..too big to fail.....

Next.......

[P. G. Tipps]

consumption is the whole point of the exercise......

The banks won't go bust..too big to fail.....

Next.......

But the banks DID go bust and had to be rescued with either public or private money in 2008 ... don't you remember?

[teamsaint]

But the banks DID go bust and had to be rescued with either public or private money in 2008 ... don't you remember?

well they ( the UK ones) all seem to still be operating and paying ******* great big bonuses to their massively pampered staff in the investment divisions .....

as I said, too big to fail...remember?