4 ms·

>don't realize how much $6T is This would be more relevant is we tallied how much actual credit "money" is getting into the hands of average people. Divide 6 t

by PKop 7y ago

>don't realize how much $6T is This would be more relevant is we tallied how much actual credit "money" is getting into the hands of average people. Divide 6 trillion per every person and if that was the extent of the calculation and legislation, we'd be better off. But it's not, the same financial beneficiaries in good times are the ones getting the bailout money in bad times. >being injected into the economy Except the crux of the problem is this money, arguably, doesn't "get into the economy", certainly not in any uniform sense. Big chunks go to bail out large corporate stockholders, bonds, financial assets. Some are funneled through the banks via loans that are hard to come by for some. What is sorta kinda direct payments to people amount to 1 time events, and too small at that. And given no commerce & fixed obligations for many small businesses, what good does debt & "loans" do for them? The biggest lie in all of this is that the money is actually getting to people that need it. It's not, yet.. and calling it helicopter money doesn't change the fact that many aren't anywhere near the helicopters to get it.

snovv_crash 7y ago
Of course, if it was actually distributed to people who needed it to spend, it would cause massive inflation. This way most of the money never gets spent, and demand never goes up. Not that it's a good thing, just saying.
- lkrubner 7y ago
  it would cause massive inflation You seem to be saying that excess money would lead to demand-driven inflation. That is clearly impossible at a time when 16 million people lost their jobs in 3 weeks, and the downturn is global, so there is no growth area, somewhere else in the world, to use up resources. One could make an argument that the withdrawal of labor from the market (last month, this month, and for several months) is a supply-side shock (slightly similar to the OPEC oil crisis in 1973) and therefore can generate some inflation via the supply-side losses. But that kind of supply-side shock is likely to be highly transient, considering how much labor is eager to get back to work, as soon as they are allowed to do so.
- TheOtherHobbes 7y ago
  It did cause massive inflation - in asset prices. But when property prices, rents, and stocks go up, that's labelled a good thing, even though it's just as much inflation as a hike in the price of bread. 2008 was basically a hand-out to the 1% who caused the crisis in the first place. [1] There was a bit of political nudging and winking about how it would trickle down to ordinary workers, but what it actually did was keep wages low and create an even bigger shitpile of unserviceable debt at virtually all economic levels - which was just starting to fall over before CV-19 happened. Our economic system is perfectly capable of imploding and destroying trillions in value on its own, and does so regularly. CV-19 showed that it's also fundamentally unable to deal with any kind of significant external shock. With any luck this may raise questions about whether the system really is fit for purpose. It may finally become clear that you can't solve a problem that requires cooperation and solid support for key front line staff with economic dogma based on cut-throat piratical competition and contempt for "disposable and low-value" front line workers. CV-19 may not be enough to make the point, but there are other threats coming down the road - expected and not - and the choice is rapidly going to become evolve-or-die, in very stark terms. [1] And some economic commentators had the gall to call the bail-out Keynesian, when in fact it was plain old corporate welfare which did nothing to repair crumbling infrastructure or provide key services or any form of social investment.
- PKop 7y ago
  The current problem, right now, is massive deflation. And the fixed costs such as rent, debt, mortgages, utilities that need to be paid while many incomes go to 0. The need is to get people and businesses over the hump, survive this crisis and get to the other side of it in tact. Now we can can legislate half-measures like rent and mortgage "moratoriums" and such, but that is gumming up the entire financial flow. Much easier to subsidize these payments and let the money flow than adjudicate millions of little friction points, and have tenants and landlords battling each other through no fault of their own, creating bad credit records for missed payments etc. Unemployment benefits can help but even this solution is slow and messy. A big problem in this whole situation, though, is bailout money is getting handed out. Just not in a uniform manner. And check out who gets "bailouts" and who gets small checks or "loans" (as if more debt is anything but trouble right now). The discrepancy between how different factions are helped, given the huge overall stimulus quantities, is a problem.

by PKop 7y ago

snovv_crash 7y ago

Of course, if it was actually distributed to people who needed it to spend, it would cause massive inflation. This way most of the money never gets spent, and demand never goes up. Not that it's a good thing, just saying.

lkrubner 7y ago
it would cause massive inflation You seem to be saying that excess money would lead to demand-driven inflation. That is clearly impossible at a time when 16 million people lost their jobs in 3 weeks, and the downturn is global, so there is no growth area, somewhere else in the world, to use up resources. One could make an argument that the withdrawal of labor from the market (last month, this month, and for several months) is a supply-side shock (slightly similar to the OPEC oil crisis in 1973) and therefore can generate some inflation via the supply-side losses. But that kind of supply-side shock is likely to be highly transient, considering how much labor is eager to get back to work, as soon as they are allowed to do so.
TheOtherHobbes 7y ago
It did cause massive inflation - in asset prices. But when property prices, rents, and stocks go up, that's labelled a good thing, even though it's just as much inflation as a hike in the price of bread. 2008 was basically a hand-out to the 1% who caused the crisis in the first place. [1] There was a bit of political nudging and winking about how it would trickle down to ordinary workers, but what it actually did was keep wages low and create an even bigger shitpile of unserviceable debt at virtually all economic levels - which was just starting to fall over before CV-19 happened. Our economic system is perfectly capable of imploding and destroying trillions in value on its own, and does so regularly. CV-19 showed that it's also fundamentally unable to deal with any kind of significant external shock. With any luck this may raise questions about whether the system really is fit for purpose. It may finally become clear that you can't solve a problem that requires cooperation and solid support for key front line staff with economic dogma based on cut-throat piratical competition and contempt for "disposable and low-value" front line workers. CV-19 may not be enough to make the point, but there are other threats coming down the road - expected and not - and the choice is rapidly going to become evolve-or-die, in very stark terms. [1] And some economic commentators had the gall to call the bail-out Keynesian, when in fact it was plain old corporate welfare which did nothing to repair crumbling infrastructure or provide key services or any form of social investment.
PKop 7y ago
The current problem, right now, is massive deflation. And the fixed costs such as rent, debt, mortgages, utilities that need to be paid while many incomes go to 0. The need is to get people and businesses over the hump, survive this crisis and get to the other side of it in tact. Now we can can legislate half-measures like rent and mortgage "moratoriums" and such, but that is gumming up the entire financial flow. Much easier to subsidize these payments and let the money flow than adjudicate millions of little friction points, and have tenants and landlords battling each other through no fault of their own, creating bad credit records for missed payments etc. Unemployment benefits can help but even this solution is slow and messy. A big problem in this whole situation, though, is bailout money is getting handed out. Just not in a uniform manner. And check out who gets "bailouts" and who gets small checks or "loans" (as if more debt is anything but trouble right now). The discrepancy between how different factions are helped, given the huge overall stimulus quantities, is a problem.