4 ms·

I'm sort of surprised they didn't try to push the issue from the bottom. give every tax filer some amount of money say, $200. A bonus for each dependent, say, $

by jfoutz 7y ago

I'm sort of surprised they didn't try to push the issue from the bottom. give every tax filer some amount of money say, $200. A bonus for each dependent, say, $100. pulled numbers absolutely out of thin air. I thought the issue was money sloshing around at the bottom, a couple hundred bucks can be a big deal when you're out of work. Ah well, I'm sure the experts have it well in hand.

miohtama 7y ago
It's called helicopter money. Australia and Hong Kong already announced going down this route. https://en.m.wikipedia.org/wiki/Helicopter_money https://en.m.wikipedia.org/wiki/Helicopter_money It is very last measure as in that point you are basically admitting that capitalism has failed.
- snidane 7y ago
  > It is very last measure as in that point you are basically admitting that capitalism has failed. 1. it might be better to prevent a situation of people unable to pay rents and mortgages and have the entire banking system collapse on this enormous liquidity trap. That could mean end of capitalism for sure 2. from capitalist point of ciew, you can look at helicopter money as a dividend. Companies 'give out' money to shareholders and Alaska and Saudi Arabia give out oil money to citizens too.
- chrispeel 7y ago
  Maybe in some sense this would be admitting that capitalism failed, but not in some bad sense. Any monetary policy at all is acknowledging that we want a closed-loop to keep the economy stable; this closed loop is an acknowledgement that anarcho-capitalism (without any feedback loop) is not stable. Helicopter money seems reasonable to me. Depending on how it's delivered, it could act like a temporary UBI.
- gentleman11 7y ago
  Alberta did this with a surplus once. It was great. It doesn’t need to be a last resort at all
  - amiga_500 7y ago
    Do it every month. Call it UBI. And fund it from land tax not taxing labour, to encourage people to do actual useful things. Like manufacturing ventilators instead of playing the stock market or the land market.
- sjwright 7y ago
  Assuming that tax isn’t a failure of capitalism, how is a negative tax a failure of capitalism?
- tiawav 7y ago
  Quantitative easing is NOT helicopter money. HK is the first country that actually tried something like Helicopter money. 1500 US$ for each citizen. All the quantitative easing has just brought us a giant bubble via asset price inflation. All I know, the bigger the bubble, the louder the blob. If central banks should do something, than finance entrepreneurship and start-ups, bring money to the people. "It is very last measure as in that point you are basically admitting that capitalism has failed." No, it has not. The boom-bust cycle is a feature of capitalism. Capitalism, call it a ponzi driven debt scheme, will only fail, if no further economic growth is possible anymore. This may be caused by energy limitations (wealth and growth are linked to Energy available) or other limiting things. Trust me, you don't want to go there. Some people call it seneca cliff.
- jfoutz 7y ago
  > It is very last measure as in that point you are basically admitting that capitalism has failed. Capitalism fails all the time. I use the market for lemons as my default example [1]. It's ok. It the market works pretty well, and it's a good starting point for lots of situations. The problem is sometimes it doesn't. We know about a bunch of situations where it doesn't work so well, so we have regulations and such. It's an extraordinary situation. I find it odd they're not implementing extraordinary responses. I guess, locally, we are taking extraordinary action with closing non-essential events and locations. I guess I don't see much value in interest free loans for most people. I guess maybe personal loans? I don't quite see how I can get my hands on 10k interest free. We'll see. [1] https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons
- spir 7y ago
  Citizens that are given Helicopter Money or UBI will then spend it at their discretion. This kind of free money is a complement to, not a failure of, capitalism.
- hnick 7y ago
  It was done to great effect in Australia during the GFC, and the fact it was done early is a contributing factor to its success allowing us to ride it out with minimal downside. So hardly a last resort. The current government is considering doing it again too as you say. Though of course, since they were in opposition last time they've spent the last decade saying how it was such a terrible idea last time. https://www.theguardian.com/business/commentisfree/2020/mar/12/rudd-mark-ii-what-experts-say-about-australian-governments-176bn-stimulus-package https://www.theguardian.com/business/commentisfree/2020/mar/...
kasey_junk 7y ago
The fed can’t do that. The legislative would need to.
- jfoutz 7y ago
  Sure, not unilaterally. But last time the fed chair testified before congress that emergency action was required [1]. The fed can do lots of things besides futz with interest rates. But again, this is just Sunday afternoon armchair quarterbacking. [1] https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008#Rationale https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008#...
amiga_500 7y ago
> I'm sort of surprised they didn't try to push the issue from the bottom. I think American finance would rather we end the world right now than give money directly to those who need it without Wall Street getting a cut.
ummonk 7y ago
Temporary UBI has been proposed by legislators. Doesn't seem to be catching on with the mainstream republican or democratic wings though: https://www.newsweek.com/tulsi-gabbard-alexandria-ocasio-cortez-back-universal-basic-income-response-coronavirus-1492293 https://www.newsweek.com/tulsi-gabbard-alexandria-ocasio-cor...
jpster 7y ago
Yes. I hope Powell (who seems bad at his job) has Bernanke on speed dial. Ben understood helicopter money. https://www.investopedia.com/articles/personal-finance/082216/what-difference-between-helicopter-money-and-qe.asp https://www.investopedia.com/articles/personal-finance/08221...

by jfoutz 7y ago

miohtama 7y ago

It's called helicopter money. Australia and Hong Kong already announced going down this route. https://en.m.wikipedia.org/wiki/Helicopter_money https://en.m.wikipedia.org/wiki/Helicopter_money It is very last measure as in that point you are basically admitting that capitalism has failed.

snidane 7y ago
> It is very last measure as in that point you are basically admitting that capitalism has failed. 1. it might be better to prevent a situation of people unable to pay rents and mortgages and have the entire banking system collapse on this enormous liquidity trap. That could mean end of capitalism for sure 2. from capitalist point of ciew, you can look at helicopter money as a dividend. Companies 'give out' money to shareholders and Alaska and Saudi Arabia give out oil money to citizens too.
chrispeel 7y ago
Maybe in some sense this would be admitting that capitalism failed, but not in some bad sense. Any monetary policy at all is acknowledging that we want a closed-loop to keep the economy stable; this closed loop is an acknowledgement that anarcho-capitalism (without any feedback loop) is not stable. Helicopter money seems reasonable to me. Depending on how it's delivered, it could act like a temporary UBI.
gentleman11 7y ago
Alberta did this with a surplus once. It was great. It doesn’t need to be a last resort at all
- amiga_500 7y ago
  Do it every month. Call it UBI. And fund it from land tax not taxing labour, to encourage people to do actual useful things. Like manufacturing ventilators instead of playing the stock market or the land market.
sjwright 7y ago
Assuming that tax isn’t a failure of capitalism, how is a negative tax a failure of capitalism?
tiawav 7y ago
Quantitative easing is NOT helicopter money. HK is the first country that actually tried something like Helicopter money. 1500 US$ for each citizen. All the quantitative easing has just brought us a giant bubble via asset price inflation. All I know, the bigger the bubble, the louder the blob. If central banks should do something, than finance entrepreneurship and start-ups, bring money to the people. "It is very last measure as in that point you are basically admitting that capitalism has failed." No, it has not. The boom-bust cycle is a feature of capitalism. Capitalism, call it a ponzi driven debt scheme, will only fail, if no further economic growth is possible anymore. This may be caused by energy limitations (wealth and growth are linked to Energy available) or other limiting things. Trust me, you don't want to go there. Some people call it seneca cliff.
jfoutz 7y ago
> It is very last measure as in that point you are basically admitting that capitalism has failed. Capitalism fails all the time. I use the market for lemons as my default example [1]. It's ok. It the market works pretty well, and it's a good starting point for lots of situations. The problem is sometimes it doesn't. We know about a bunch of situations where it doesn't work so well, so we have regulations and such. It's an extraordinary situation. I find it odd they're not implementing extraordinary responses. I guess, locally, we are taking extraordinary action with closing non-essential events and locations. I guess I don't see much value in interest free loans for most people. I guess maybe personal loans? I don't quite see how I can get my hands on 10k interest free. We'll see. [1] https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons
spir 7y ago
Citizens that are given Helicopter Money or UBI will then spend it at their discretion. This kind of free money is a complement to, not a failure of, capitalism.
hnick 7y ago
It was done to great effect in Australia during the GFC, and the fact it was done early is a contributing factor to its success allowing us to ride it out with minimal downside. So hardly a last resort. The current government is considering doing it again too as you say. Though of course, since they were in opposition last time they've spent the last decade saying how it was such a terrible idea last time. https://www.theguardian.com/business/commentisfree/2020/mar/12/rudd-mark-ii-what-experts-say-about-australian-governments-176bn-stimulus-package https://www.theguardian.com/business/commentisfree/2020/mar/...

kasey_junk 7y ago

The fed can’t do that. The legislative would need to.

jfoutz 7y ago
Sure, not unilaterally. But last time the fed chair testified before congress that emergency action was required [1]. The fed can do lots of things besides futz with interest rates. But again, this is just Sunday afternoon armchair quarterbacking. [1] https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008#Rationale https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008#...

amiga_500 7y ago

> I'm sort of surprised they didn't try to push the issue from the bottom. I think American finance would rather we end the world right now than give money directly to those who need it without Wall Street getting a cut.

ummonk 7y ago

Temporary UBI has been proposed by legislators. Doesn't seem to be catching on with the mainstream republican or democratic wings though: https://www.newsweek.com/tulsi-gabbard-alexandria-ocasio-cortez-back-universal-basic-income-response-coronavirus-1492293 https://www.newsweek.com/tulsi-gabbard-alexandria-ocasio-cor...

jpster 7y ago

Yes. I hope Powell (who seems bad at his job) has Bernanke on speed dial. Ben understood helicopter money. https://www.investopedia.com/articles/personal-finance/082216/what-difference-between-helicopter-money-and-qe.asp https://www.investopedia.com/articles/personal-finance/08221...