What this Country Needs is a Helicopter Drop of Money

Your plan makes hella-sense. Why hasn't DC thunk it up and implemented it?

 

They tried to do it. The Republicans blocked any implementation of it. They've been talking about an infrastructure bill for a while now. But Republicans are dead set against any increase of spending. There's absolutely nothing Obama can do. It's just absolutely sickening. Unfortunately the only way Republicans will ever spend the amount of money we need is if we have WWIII. Very weird to think that's the only way they'll expand the money supply to help the country. Kind of demented to be honest.

 

Haha... I didn't expect you to be able to discuss the very personal information like a car make/model and what it cost to tap that tank. I knew you couldn't and just wanted to publicly exploit that.

 

You're acting very weird.

 

What legislation are you referring to?
Tell me anything about cashing a check.

 

http://www.thefiscaltimes.com/2015/03/25/478B-Infrastructure-Bill-Blocked-Senate-GOP
http://www.politicususa.com/2014/07...obs-blocking-bill-outsourcing-tax-breaks.html
http://www.washingtontimes.com/news...oots-down-obama-infrastructure-bill/?page=all
http://www.cnn.com/2012/07/19/politics/senate-bring-jobs-home-bill-blocked/

You're not making any sense. You sound drunk.

 

You're not answering my question at all. Is there such a thing as expanding the money supply too quickly, and what consequences will that have?

If not, why not go to the extremes I suggested? If it has no negative consequences.

 

Maybe we can get back some of those "bricks" of money that the Bush clowns dropped on Iraq.

 

It's not unlike what happened during the Depression. Roosevelt tried to spend us out of it and was largely successful. However conservatives kept fighting him and the Recovery then took a decade and wasn't complete until the MASSIVE spending of WWII.

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She always does. Probably why she was banned from numerous sites.

 

It is a special kind of pathetic, embarrassing sad this forum is bloated with. It's funny and sad. It's like a room full of fat senior girls trying to put on cheer gear and walk out on the track. Everyone wants to be us, but you can't fake it.
If DC was going to put a 20k stimulus contribution in every household, what would be the most sensible delivery method?

 

Money is simply a ruler. It is a token of value.

Producing money does not increase value in the same way producing rulers doesn't make you taller.

 

Expanding the money supply while their is either slack in the labor market or industrial overcapacity will not cause inflation. It is very important to note that QE (or other monetary operations) does not effectively increase the money supply - indeed, many economists argue that the net effect is deflationary.

If you want to effectively create demand, the government must either spend money in the private economy (contracting) or some version of the helicopter drop (like Nixon's proposed negative income tax).

In either case, the limiting factor will be inflation. The current environment, with slack in the labor market and industrial overcapacity, makes that a low probability (although it always needs to be watched). The current risk is more to the downside, as the Fed as recently acknowledged. None of the CB's in the West are meeting their inflation targets (undershooting).

 

Thank you, that is exactly the sort of thing I wanted. The author of the OP is not saying that we should expand the money supply with production to prevent deflation, he is proposing a credit card with no limit, and a kid who wants everything he sees in the catalog.

 

But, money is not a commodity we grow, and we are not short of money itself- we are short of action, we are paralyzed more and more by excess regulation and the cost of it produces no value, it just hinders process. Money is a representation of wealth or value, but it's got to move. When you spend a dollar, the guy you bought from takes in a dollar. He buys something with that, and the next guy has made a dollar. Then that guy spends it, and the next guy has made a dollar. Thus the same amount of money provides an income for many people provided is used- invested, spent, or someway keeps in circulation. When money stops flowing, as in everybody fears trouble and sits on it- the economy slows and things get worse. Make the economy stable, stop the incredible deluge of regulation from washington, stop telling people they are entitled to free money- in other words, tell government to get the hell out of the way- and the money will flow like water over Niagara Falls.

 

Because opposing hyperinflationary policies means you oppose all money?

 

Or the $20 trillion debt we have now because of Obama. And what do we have to show for it?

 

I strongly disagree with this concept that spending it is the important thing, rather than spending it on something that improves efficiency and productivity. Krugman spouted off such nonsense when he said what we really needed was to fear an extraterrestrial invasion and to mount a massive spending effort counter it. The money spent to counter the imagined pending intergalactic invasion would stimulate the economy in his system of thought and result in prosperity. But, what it really results in is a massive misdirection of resources which that economic view does differentiate between misdirection of resources and careful allocation of resources that improves efficiency.

I was kicking around the electronic deposits. The problem bailing out States it that it removes the incentive for them to abandon the policy that landed them on the rocks.

I think you have to return to the basic premise that the purpose of economy is to produce and exchange goods and services that WE desire. The State has other goals that may be incompatible with that, and where their goals and priorities are not service of their constituents, they have lost their way. So such stimulus, if resorted to, needs to be directly to the consumer.

I was reading the other day that for roughly the same money we spend on "poverty programs" we could simply deposit $10k a year to the accounts of every American household, not already on SSI and making less than $100k a year. No other qualification needed. That's it, send every American Household $10k a year and end every other social safety network program, except Social Security and shut down all the State, Federal and Local infrastructure dedicated to directing means tested benefits.

Great idea. In times of stimulus, such as you speak of, perhaps the amount could be increased for a season until demand returned to normal.

 

That's funny because I've used that same analogy in the past. We've spent the last 15 years trying to encourage spending. It's got us a financial collapse in 2008 that we still haven't recovered from. The economic illiterates such as our OP still cling to the belief that we can spend our way to prosperity and that saving is the most evil thing of all.

 

You guys like to make stuff up, it's fun to watch. When any educated person looks at the data of how the economy is functioning right now, they would come to the conclusion that we need more spending. That's just a mathematical fact. You guys arguing against that basic math is just what conservatives do. They literally have no clue what they are talking about but they are the most confident in their beliefs. It's absolute comedy gold!!

 

There's a lot of people outside of Krugman who understand this. Heck Martin Feldstein, Ronald Reagan's chief economic adviser even agrees we need a massive fiscal expansion. And if your proposal is $10k deposits that's fine. Anything to get money in the economy. The private sectors balance sheets are terrible. They need financial equity, not more debt. The government is literally crippling the economy by not giving it what it needs.

 

And yet the Fed keeps signalling a tightening cycle.

Good point.

 

Nice logical fallacy. Not spending money enough has just as bad of consequences as spending too much.

 

How many more trillions of dollars should the government spend?

 

Maybe this will help:

http://ace.mu.nu/archives/throwing-money.gif

 

Well over time spending is going to increase like it always has. In a 100 years, government will be spending $100 trillion a year. It's purely math. There is no limit to how much they can spend and there's no reason why they should not increase spending when the economy needs it. I'd say a good $2-3 trillion over the course of 1-2 years would be good. But I'm sure if they did these policies some high level economists with their statistics teams could come up with actual break down of how much is needed to close the output gap.

It's funny because people have had your same argument for the past century. In 1937 when the debt was $42 billion people got all in a hissy that the government couldn't afford that, it had to pay it back, OH THE GRANDCHILDREN!!, blah blah blah. They tried to cut government spending by 20%, it failed miserably, then we get lead up to the greatest fiscal expansion in the history of the United States... WWII. And surprisingly spending all that money didn't cause hyperinflation and the world didn't implode!! But, still 70 years later people have the same arguments, just with a new number. When the government is spending $100 trillion a year in 75-100 years, they will have the same argument, when the debt is $1 quadrillion they will have the same argument. It just never stops, lol.

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That's who Obama should be riding around with in the helicopter, just dumping that cash everywhere!! The economy would be booming.