Dublin financier says ECB should give every Ez household €1000 for free. good idea?

willyboy14

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It seems the idea is to hand them out in the form of vouchers
outside your local pub. Remember now, drink responsibly.....
 


cobalt

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I suppose the idea is that it'll make its way round the local economy in a manner similar to this (fictitious) story:
Several years ago, during the pilot dispute, there were no domestic flights in Australia.
Remote places like Darwin, Cairns and Port Douglas went into crisis. They were tough times, everybody was in debt, and everybody lived on credit.

Fortunately, one day a rich American tourist stepped out of a taxi and walked into the lobby of a Port Douglas hotel.
He laid a 100 dollar note on the reception counter, and went to inspect the rooms upstairs in order to choose one.
The hotel owner immediately took the 100 dollar note and ran to pay his debt to the butcher.
The butcher took the 100 dollar note, and ran to pay his debt to the pig farmer.
The pig farmer took the 100 dollar note, and ran to pay his debt to the supplier of his feed and fuel.
The supplier of feed and fuel took the 100 dollar note and ran to pay his debt to his regular hooker who in these hard times, gave her "services" on credit.
The hooker ran to the hotel, and paid off her debt with the 100 dollar note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
And just as the 100 dollar note was back on the counter of the hotel, the tourist came down after inspecting the rooms, and saying that he did not like any of the rooms took his 100 dollar note back and left the hotel lobby.
The whole town was now without debt, and looked to the future with a lot of optimism.
 

galteeman

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So say if this was distributed via the tax/social welfare systems.
'Give families €1,000 each to kickstart economies'

Would people spend it ?
Is it a good economics idea to print money for such ?
What if all countries did it?

cYp
Yes I reckon that is exactly the way quantitative easing should be carried out as it will close the inequality gap. Those who have all the wealth already will have that diluted and the masses will have their wealth increased a little.
It probably should be done every so often as a matter of course to rebalance things.
 
E

Elbereth

I'll take the €1,000 - happily. There's a load of cheap sh*t on the interwoodgie that I could buy from china. :)
 

Paddy Sarkozy

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He obviously thinks the rules that apply to Dublin financiers, Irish pillar banks and dodgy Irish accountancy firms should apply to the ordinary punter. Free money for all.
But why stop at a grand? Surely we all deserve at least a million ?
 

WTTR

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"The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer/Software it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part ." - Marc Faber
Bull************************ter supreme! He lives in Thailand.
 

constitutionus

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i suppose its no more nuts than giving two trillion to the banks in cheap loans .

and hey it might actually get spent.

:D
 

viper999

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1 k would be nice i would go out and spend the lot,a few nice meals, a weekend away in ireland and maybe a new mobile phone. It wont happen austerity and debt repayments are for the serfs, the free money goes to banks and other bailed out organisations.
 

gaiusc

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"The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer/Software it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part ." - Marc Faber
In Ireland, it'll just get put in a bank so it can be spent on houses.
 

SPN

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So say if this was distributed via the tax/social welfare systems.
'Give families €1,000 each to kickstart economies'

Would people spend it ?
Is it a good economics idea to print money for such ?
What if all countries did it?

cYp
Yes it's a good idea, but the two questions that need to be answered are, who should get it, and how much should they get.

Ideally it would be at least a couple hundred yoyos a month, paid every month for at least two years. There would be a problem at the end of the period whenever the flow of money would be stopped, as we saw with the end of the flow of bubble lending in 2008, or as the Murkans/BRICs are experiencing whenever the Fed tries tapering.








Mmmn, we could have a kind of Lannigan's Ball cycle of lodgement, withdrawal and lodgement again. :)

Seriously though, while any measure however temporary cannot be turned down, it would be far better to to wipe out a percentage of mortgage debt for struggling families with little or no savings, they are the ones who need it. How about giving people a sense of hope again?

Unfortunately for them, the word 'Ethics' is understood by our Government as something only to be found on a balance sheet.

Those who have debt can use it to pay down the debt, thus freeing up other money to spend into the economy.

Those without debt can use the money to spend in the economy straight away.
 

Radix

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Those who have debt can use it to pay down the debt, thus freeing up other money to spend into the economy.

Those without debt can use the money to spend in the economy straight away.


It's very hard to take you seriously with an idea like that, which proposes to poor Mr. Smith that 'we'll reduce your debts by a miniscule €1,000' and we'll give your rich neighbour Mr. Jones €1,000 to spend or save as he likes.
 

SPN

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It's very hard to take you seriously with an idea like that, which proposes to poor Mr. Smith that 'we'll reduce your debts by a miniscule €1,000' and we'll give your rich neighbour Mr. Jones €1,000 to spend or save as he likes.
The idea proposes to give Mr Smith €1,000 and Mr Jones €1,000.

They can spend it as they see fit.

If Mr Smith uses it to pay down debt (repay money borrowed to purchase goods/services in the past) and Mr Jones uses it to purchase goods/services in the present it makes no real difference. They both get €1,000 to spend into the economy, creating jobs, paying taxes, and repairing the ecnomic infrastructure.
 

recedite

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The idea proposes to give Mr Smith 1,000 and Mr Jones 1,000.

They can spend it as they see fit.

If Mr Smith uses it to pay down debt (repay money borrowed to purchase goods/services in the past) and Mr Jones uses it to purchase goods/services in the present it makes no real difference. They both get 1,000 to spend into the economy, creating jobs, paying taxes, and repairing the ecnomic infrastructure.
You're right.
The same principle could also be applied to national debts owed to the ECB.
So Mr. Smith here is Greece, and Mr. Jones is Germany. I'd go further though and give the Germans credit that can only be spent in debtor countries. Tourism vouchers of some sort, or the equivalent.
 

recedite

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So a 1,000 euros gets credited to every personal bank account in the Eurozone. Where does this genius suggest the accompanying debit gets housed?
With the ECB, in Frankfurt, the same as usual.
The only difference from normal QE is that instead of allocating the newly conjured-up credit to the banksters, the ECB would be allocating it directly to citizens.
Normally the banks get it for free, and then they lend it out to the citizens at unjustified interest rates.
 

McTell

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No
Our 10-year went negative the other week

 


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