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From the end of the article: "The helicopter money policy ... distributes resources directly to citizens, with no limits on how they can spend it" If the purp

by jawns 13y ago

From the end of the article: "The helicopter money policy ... distributes resources directly to citizens, with no limits on how they can spend it" If the purpose is to jump-start spending, then perhaps there should be one modest restriction on how you spend a stimulus check: an expiration date. Instead of issuing checks, the government could issue prepaid debit cards with a relatively short expiration date. (I believe some of the 2008 stimulus money was distributed via debit card, but the bulk was direct-deposited.) For the vast majority of people, a debit card with a short expiration date would lead to their spending the money within that span; a small minority might go through the trouble of converting the debit card amount to cash and saving it, but probably not nearly as high a percentage as if it came as a check or a direct deposit.

toomuchtodo 13y ago
Perhaps its just personality, but if I were to receive a stimulus debit card, I would use it to pay for one of my existing monthly expenses (T-mobile, gas, etc) and take my own funds I would've spent and save it.
- deleted 13y ago
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- dredmorbius 13y ago
  Look up Steve Keen. His suggestion for a debt jubilee / universal money distribution scheme more-or-less follows on this basis, though he puts the first cut at debt. The point is: if you spend the money, whether on retiring debt, on recurring expenses, or on new purchases, what you've received is a net increase in income. For people who are living hand to mouth (they have no surplus income, or worse, negative surplus), the money will be spent. If you're able to squirrel some away, that's a consideration, but it's 1) built into the model and 2) it's a relatively small fraction of the total distribution (likely less than 20%).
kybernetikos 13y ago
Household debt in the UK averages around 8k excluding mortgages. The UK government has purchased £375 billion of assets as part of its Quantative Easing (sometimes known as 'printing') scheme, which is around 14k per household. I have a lot of confidence that QE would have been much more effective in the UK if it had started by allowing every adult the ability to claim say 5k against existing debts (e.g. credit card, bank loan, mortgage). If the claiming individual had no debt or less debt than the amount offered, the remainder could be claimed as income. This would make a massive difference to indebted people, and by allowing people who weren't in debt to claim it as income, it avoids the moral hazard of people saying 'well I should have borrowed money'. This is of course a separate matter to basic income, but I just find it interesting how comparable those numbers are - the personal debt and the amount created by quantitative easing and poured into assets mainly held by wealthy people.
dragonwriter 13y ago
> If the purpose is to jump-start spending, then perhaps there should be one modest restriction on how you spend a stimulus check: an expiration date. Sure, but that's added complication with limited additional benefits. If you distribute it as a reverse capitation, its going to be spent with a ratio roughly equal to the average marginal propensity to consume across the whole population, which is a lot better than you'd get with most other stimulus measures, and with a lot lower organizational overhead (and incentive for potential beneficiaries to attempt to game the system) than for any system targetted to try to beat that ratio. > For the vast majority of people, a debit card with a short expiration date would lead to their spending the money within that span Sure, but in many case it would in part displace other spending which would instead be saved. If people were rational, it would have little difference in effect to just giving out cash. In reality, it might have some small difference in how much net increase in spending it led to, but probably not a big benefit that would make this worth the additional complication.

by jawns 13y ago

toomuchtodo 13y ago

Perhaps its just personality, but if I were to receive a stimulus debit card, I would use it to pay for one of my existing monthly expenses (T-mobile, gas, etc) and take my own funds I would've spent and save it.

deleted 13y ago
[deleted]
dredmorbius 13y ago
Look up Steve Keen. His suggestion for a debt jubilee / universal money distribution scheme more-or-less follows on this basis, though he puts the first cut at debt. The point is: if you spend the money, whether on retiring debt, on recurring expenses, or on new purchases, what you've received is a net increase in income. For people who are living hand to mouth (they have no surplus income, or worse, negative surplus), the money will be spent. If you're able to squirrel some away, that's a consideration, but it's 1) built into the model and 2) it's a relatively small fraction of the total distribution (likely less than 20%).

kybernetikos 13y ago

Household debt in the UK averages around 8k excluding mortgages. The UK government has purchased £375 billion of assets as part of its Quantative Easing (sometimes known as 'printing') scheme, which is around 14k per household. I have a lot of confidence that QE would have been much more effective in the UK if it had started by allowing every adult the ability to claim say 5k against existing debts (e.g. credit card, bank loan, mortgage). If the claiming individual had no debt or less debt than the amount offered, the remainder could be claimed as income. This would make a massive difference to indebted people, and by allowing people who weren't in debt to claim it as income, it avoids the moral hazard of people saying 'well I should have borrowed money'. This is of course a separate matter to basic income, but I just find it interesting how comparable those numbers are - the personal debt and the amount created by quantitative easing and poured into assets mainly held by wealthy people.

dragonwriter 13y ago

> If the purpose is to jump-start spending, then perhaps there should be one modest restriction on how you spend a stimulus check: an expiration date. Sure, but that's added complication with limited additional benefits. If you distribute it as a reverse capitation, its going to be spent with a ratio roughly equal to the average marginal propensity to consume across the whole population, which is a lot better than you'd get with most other stimulus measures, and with a lot lower organizational overhead (and incentive for potential beneficiaries to attempt to game the system) than for any system targetted to try to beat that ratio. > For the vast majority of people, a debit card with a short expiration date would lead to their spending the money within that span Sure, but in many case it would in part displace other spending which would instead be saved. If people were rational, it would have little difference in effect to just giving out cash. In reality, it might have some small difference in how much net increase in spending it led to, but probably not a big benefit that would make this worth the additional complication.