Monday 20 February 2017

Drawing money among the people to foster consumption?

After many years, we still talk about the economical crisis. Unemployment is still high and getting a job is still a challenge. People don't really trust the future and there is much talk about the effects of automation in the job market, with its consequent loss of jobs, about the lack of consumption and the excess of people offering products and services, and the sentence "we will live worse than our parents" is very extended. 

To emerge from this crisis and recover the trust in the economy, countries and economical institutions have tried to adjust their budget and reduce their debts, the process that has been called "austerity", and they have tried to adquire big amounts of debt and decrease the interest rates in order to allow the countries to keep their debts and keep a certain degree of consumption. 




It looks like neither of them are giving good results. Austerity decreases the economical activity because big amounts of money goes to pay back the debt intead of the adquisition of goods and services, but a stimulus package, consisting in buying debt and easing the access to money to the banks, doesn't improve the trust in the economy too, as there are no expectations that this new debt could be payed back.   




If we can't get more debt, but we can't stop consuming too, what can we do?


Many people says that our main problems is the transfer from employment income to capital income, that drives us to the lack of consumption and the excess of products and services, as employment income goes mainly to consumption, meanwhile capital income goes mainly to investment. But without consumption, investments aren't worthy. 

Some have said that money must be thrown from a helicopter in the peasants must take it and use it to consume and impulse the economy. That would originate an awful human stampede, as it happened in China when someone thrown flyers that looked like money and some people was killed. We can easily imagine what it would happen if that flyers were real money. 




What about a worldwide draw, with money took from rich people, to foster consumption?


The idea is raising money from rich people, those who have enough money to live and who are no finding good investments because of lack of consumption. The ones who give more money to the draw could be specially ackwonledged by the organization of the draw, and that would be a good stimulus to give more money.

After the money is raised, it can be divided by 100-dolars checks, that would be drawn among the world population.




The more money is raised, the more checks can be shared. Those checks couldn't be exchanged for money, but for products and services. This money shouldn't be saved.

That would be a way to foster consumption, because many products would be bought that otherwise had'nt been bought, and it wouldn't drive to a strong raise of inflation, as the quantity of money would be quite limited.