Helicopter money

[Temujin]

yeah so I thought this could be an interesting subject, Peter Praet one of the top economists from the ECB gave an interview in an Italian newspaper where he talked about "helicopter money" and the fact that it's possible, and not illegal.

The principle would be that the ECB to stimulate the Economy would give every European say 1.000 € and that said Europeans would start spending this money and thus the economy could be jumpstarted. Apparently the current system of quantitative easing where the ECB has thus far pumped 700 billion € into the banks is proving to be faulty since banks are reluctant to lend out this money, and in fact are  even whining that they want permission to lower interest rates for savings accounts or even introduce negative interest, or (at least in Belgium) are considering to charge people to withdraw their own money because they are suffering oh so badly.

So why not? Why not give this money to real people instead of to the ****ers who got us all into trouble in the first place

Some economists have spoken out that it would be a good idea, others call it madness, and some are warning for a chance that this could become politicised in a discussion of who deserves the money more? And some wonder out loud if you should give people money? Or cheques with an expiration date that can only be used to purchase green eco friendly products etc...

Personally I think they should just give everyone who has less than a million € in assets a sum of 2.000 €

I mean the mobsters calling themselves bankers have thus far received 700.000.000.000 €!

700.000.000.000 €


******** insane! they could have given that money to Greece and thus relieve the suffering Greek people of their misery!

 

[Úlfheðinn]

one of the top economists from the ECB

Well, there's your first problem.

 

[Temujin]

one of the top economists from the ECB

Well, there's your first problem.

very witty, what's your real reply? instead of resorting to a cheap shot to discredit the idea

 

[Úlfheðinn]

Please consider the full implications of my statement before calling it a cheap shot.

 

[pentagathus]

Bloody continentals, stop using a decimal place where you should be using a comma.

 

[Temujin]

Please consider the full implications of my statement before calling it a cheap shot.

He's an economist, from the ECB, stating that the ECB could give money to the people instead of the banks.

The implication is that he might actually have a soul which is rare in a number cruncher in a high paying job

 

[Szentgyörgyi]

they could have given that money to Greece and thus relieve the suffering Greek people of their misery!

...in the short run, then watch them and everyone else who didn't learn from their mistakes fall to the same misery. Well worth the investment

On a more serious note there was a lengthy debate on the subject that went unnoticed (compared to other less meaningful debates).

 

[Untitled.]

Please consider the full implications of my statement before calling it a cheap shot.

He's an economist, from the ECB, stating that the ECB could give money to the people instead of the banks.

The implication is that he might actually have a soul which is rare in a number cruncher in a high paying job

Because anything else than theater and bread to the people always ends well.

But really, I don't think all bank activity is corrupt and evil because the people running the show just happen to be evil. Evil exists because evil? Sure, but sounds like a fallacy.

 

[kurczak]

Because the only thing it would accomplish would be a couple of days of a spike in booze and food sales and that would be it.

Which means it would be about as effective as QE, har har.

 

[Temujin]

Because the only thing it would accomplish would be a couple of days of a spike in booze and food sales and that would be it.

Which means it would be about as effective as QE, har har.

Or in luxury. who's to say people won't buy, games, samsung phones, better tv's etc... with their money? Or bills. We have a new record in overdue bills in this country, and people in debt mediation, or people forced to install a budget meter on their electricity  etc...

Why do you come to the conclusion it would all go to booze and food?

 

[kurczak]

It was a hyperbole Although I still think you would be surprised how many people would actually blow it on...blow, so to speak. People tend to be pretty irrational about spending "unexpected" or "random" money. But it doesn't really matter what exactly it would be spend on. It would still be a single spike that the producers wouldn't be able to adjust to. There would be no real increase in production, employment etc. People would just buy whatever is left in stock. 1 or 2k isn't really that much to keep it under your pillow for months or years, waiting for some sweet deal.Sure, the lucky producers would eventually got their hands on the money, but they would have no real signal from the consumers as to what they are going to buy next week, month, year. Because the extra money is already spent and people go back to their previous spending habits.

"Classic" quantitative easing should in theory redistribute the money to those producers that have some viable plans for expansions. With helicopter money, the money ends up with relatiely random producers, not necessarily those have any plans to put the money to further productive use. So best case scenario, they put it in banks and so the money ends up where it would have ended up anyway. The upside is that an ordinary Joe got to spend some extra money this one time.

If you really believe, in a truly Keynesian fashion, that the overall problem is weak aggregate demand, then one time helicopter money won't change that. You need a continous fiscal expansion (direct govt spending and/or increased welfare and/or lower taxes to increase disposible income). But, even if your assumption is right how are you going to do any, let alone all three of those, when everbody's ears in debt.

So the Keynesian solution is impossible and the Monetarist solution doesn't really seem to be working that great, if at all.

This is where we are and have been the past ten-ish years. There are several ways out of this -
A) embrace a heterodox school of economic thought and become irrelevant until things crash really, really bad.
B) proclaim your incredibly specific and untried subset of (neo)Keynesianism or Monetarism to be the only way to go and become irrelevant until things crash really, really bad.
C) just close your eyes and keep quantiatively easing, because hey, maybe this time it will be different
D) Quit economics and start meditating. After all, this too shall pass.

 

[Pharaoh Llandy]

Bloody continentals, stop using a decimal place where you should be using a comma.

I know, right?

 

[Krik]

Finally something that Americans and Brits can agree on.

 

[Temujin]

It was a hyperbole Although I still think you would be surprised how many people would actually blow it on...blow, so to speak. People tend to be pretty irrational about spending "unexpected" or "random" money. But it doesn't really matter what exactly it would be spend on. It would still be a single spike that the producers wouldn't be able to adjust to. There would be no real increase in production, employment etc. People would just buy whatever is left in stock. 1 or 2k isn't really that much to keep it under your pillow for months or years, waiting for some sweet deal.Sure, the lucky producers would eventually got their hands on the money, but they would have no real signal from the consumers as to what they are going to buy next week, month, year. Because the extra money is already spent and people go back to their previous spending habits.

"Classic" quantitative easing should in theory redistribute the money to those producers that have some viable plans for expansions. With helicopter money, the money ends up with relatiely random producers, not necessarily those have any plans to put the money to further productive use. So best case scenario, they put it in banks and so the money ends up where it would have ended up anyway. The upside is that an ordinary Joe got to spend some extra money this one time.

If you really believe, in a truly Keynesian fashion, that the overall problem is weak aggregate demand, then one time helicopter money won't change that. You need a continous fiscal expansion (direct govt spending and/or increased welfare and/or lower taxes to increase disposible income). But, even if your assumption is right how are you going to do any, let alone all three of those, when everbody's ears in debt.

So the Keynesian solution is impossible and the Monetarist solution doesn't really seem to be working that great, if at all.

This is where we are and have been the past ten-ish years. There are several ways out of this -
A) embrace a heterodox school of economic thought and become irrelevant until things crash really, really bad.
B) proclaim your incredibly specific and untried subset of (neo)Keynesianism or Monetarism to be the only way to go and become irrelevant until things crash really, really bad.
C) just close your eyes and keep quantiatively easing, because hey, maybe this time it will be different
D) Quit economics and start meditating. After all, this too shall pass.

At least with the helicopter solution ordinary people will be helped at least once.

Right now the Banks are getting free money, with the understanding that they should lend people this money to grease the wheels of the economy, but they have proven to be extremely reluctant to lend this money out, add to that the strict rules about lending and a huge part of the population isn't even allowed to take a loan because they don't have enough left every month after paying their monthly premiums, even for social loans where your interest rate is lower and your payback time longer, you still need to be able to have a certain amount left every month.

Maybe just maybe, europe could do something for the disenfranchised, heck use it! do it and boast about it! convince the ordinary people who otherwise vote UKIP, Wilders, the BNP etc... that Europe in fact can be a good thing, and does care about them!

Right now the ECB has given Banks 700.000.000.000 € (that would be 700,000,000,000 € for Pharaoh and pentagathus  ) to bank to no effect. Banks are sitting on that money and complaining they aren't making enough money and need to be allowed to screw over the people a little bit harder they are asking for the right to forego on the lube when they are bending us over the table and ploughing into our asses because they believe we can take the pain

 

[pentagathus]

Your bank sounds pretty ****, maybe you should try switching.

 

[Temujin]

Your bank sounds pretty ****, maybe you should try switching.

Banks in Belgium have asked permission to charge people negative interest on their savings accounts (A Dutch bank in Belgium was the first and is the biggest advocate of asking for this) and now banks are considering charging people for withdrawing money! it's crazy

 

[Age of Empires ¶ Densetsu]

Temujin, we are not going to buy you a helicopter! Get the money yourself.

 

[Temujin]

Lol, I wouldn't even want a helicopter, if I'd ask you guys to collectively buy me something, I'd ask you guys to buy me this baby I'll take care of the extra modifications, I'l also casually mention that my birthday is July 10th  That would be the 10th day of the 7th month in the year of our lord 2016

 

[Age of Empires ¶ Densetsu]

That's one powerful hairdryer.

 

[Horcerer]

Just get an autoblow instead. That's what its intended for.