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The 2000 and 2008 blowups were pretty bad but back then there were still things that could be done like running deficits or lowering interest rates. We now have

The 2000 and 2008 blowups were pretty bad but back then there were still things that could be done like running deficits or lowering interest rates. We now have huge deficits and almost zero interest already during the boom. What can the Fed or government do during the next downturn? I don’t see them having any tools left to reinflate the bubble.

Kye 5y ago
UBI Really. Just give people money. It generates more benefit than it costs. Look how well billionaires did when unemployment benefits were buffed up. Now imagine if they were taxed reasonably to capture some of that toward covering the cost. People still looked for work, but they could afford to hold out for better jobs.
- jbay808 5y ago
  I agree, and when governments are worried about deflation, UBI / helicopter money, which goes to people who need it and will rapidly spend it, seems much better than lowering interest rates, which mainly inflates asset prices and benefits the top 1%. I'm not sure why it's not more commonly employed. Of course, we're in an inflation scenario right now, but part of the reason for that appears to be that central banks are so terrified of deflation that they're way more comfortable erring in the other direction.
  - corpMaverick 5y ago
    My only worry is that a lot of that money goes to housing. Rents go up immediately and also house prices. So we need policies to increase housing supply/density in most cities to counter this effect.
    - jbay808 5y ago
      I think the trick would be to increase interest rates (deflationary, mostly for assets) and implement UBI simultaneously (inflationary, mostly for consumables). The increasing cost of debt will sink asset prices, houses most of all, while the UBI cancels out the systemic deflationary forces that result from that. I think the net effect of this would drive investment into more productive and less rent-seeking areas, incentivize a lot more innovation, and also significantly reduce the wealth gap. But that's just me.
- kortilla 5y ago
  That’s an absolute disaster. It wasn’t even UBI levels and it caused all kinds of inflation and a ballon of government debt. > People still looked for work, but they could afford to hold out for better jobs. A.k.a. weren’t really looking for work. It’s like uncle Eddie holding out for a management position for years of being unemployed.

Kye 5y ago

UBI Really. Just give people money. It generates more benefit than it costs. Look how well billionaires did when unemployment benefits were buffed up. Now imagine if they were taxed reasonably to capture some of that toward covering the cost. People still looked for work, but they could afford to hold out for better jobs.

jbay808 5y ago
I agree, and when governments are worried about deflation, UBI / helicopter money, which goes to people who need it and will rapidly spend it, seems much better than lowering interest rates, which mainly inflates asset prices and benefits the top 1%. I'm not sure why it's not more commonly employed. Of course, we're in an inflation scenario right now, but part of the reason for that appears to be that central banks are so terrified of deflation that they're way more comfortable erring in the other direction.
- corpMaverick 5y ago
  My only worry is that a lot of that money goes to housing. Rents go up immediately and also house prices. So we need policies to increase housing supply/density in most cities to counter this effect.
  - jbay808 5y ago
    I think the trick would be to increase interest rates (deflationary, mostly for assets) and implement UBI simultaneously (inflationary, mostly for consumables). The increasing cost of debt will sink asset prices, houses most of all, while the UBI cancels out the systemic deflationary forces that result from that. I think the net effect of this would drive investment into more productive and less rent-seeking areas, incentivize a lot more innovation, and also significantly reduce the wealth gap. But that's just me.
kortilla 5y ago
That’s an absolute disaster. It wasn’t even UBI levels and it caused all kinds of inflation and a ballon of government debt. > People still looked for work, but they could afford to hold out for better jobs. A.k.a. weren’t really looking for work. It’s like uncle Eddie holding out for a management position for years of being unemployed.