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> Why not do the obvious, which is to give every adult some free money each month? Since the supply of goods and services is fixed in the sort term, pouring mo
by lottin 8y ago
> Why not do the obvious, which is to give every adult some free money each month?
Since the supply of goods and services is fixed in the sort term, pouring more money into the economy doesn't change anything in terms of consumption. Only, prices go up, because there's more money competing for the same amount of goods and services. These idea is called "neutrality of money".
- RidingPegasus 8y agoGiven that it's cash payments "each month", how can that be short term? If all recipients simultaneously wanted to spend the money on burritos, by month 2 there's going to be a lot more restaurants selling burritos. A better use of the money is infrastructure spending. It provides employment across multiple sectors and targeted correctly is one of the best investments a government can make.
- gbacon 8y agoIf money were neutral, prices would rise uniformly, but this is in fact not what happens.