Why not give the liquidity to The People instead of the Banks?

[anaconda]

Why not give stimulus money to taxpayers and simply let them spend it?

I'm no economist, but it seems this would solve a number of problems....

1) It would result in a massive amount of private consumption spending and savings, which would forestall an economic turndown.

2) Through the money multiplier, it would make the existing healthy banks flush with cash and credit. I suspect this could be done with far less than $700 billion. More like $200 billion.

3) It would provide no assistance to the troubled banks and they would be allowed to fail, as Dr. Paul suggests.

4) The People would be a lot happier spending the money than giving it to Goldman Sachs.

 

[Dieseler]

What I have been wondering is why don't they make them, the banks, sell off enough of those devalued properties to maintain liquidity through auctions on the courthouse steps of the county in which the property resides. If the Government is going to bail them out by buying those properties for pennies on the dollar, why can't we the people get a shot at them?

 

[FunkBuddha]

Why not give stimulus money to taxpayers and simply let them spend it?

I'm no economist, but it seems this would solve a number of problems....

1) It would result in a massive amount of private consumption spending and savings, which would forestall and economic turndown.

2) Through the money multiplier, it would make the existing healthy banks flush with cash and credit. I suspect this could be done with far less than $700 billion. More like $200 billion.

3) It would provide no assistance to the troubled banks and they would be allowed to fail, as Dr. Paul suggests.

4) The People would be a lot happier spending the money than giving it to Goldman Sachs.

Fool! Peasants don't know how to spend money properly! Only the noble bankers understand the nuances of the monetary system!

j/k, obviously.

 

[anaconda]

What I have been wondering is why don't they make them, the banks, sell off enough of those devalued properties to maintain liquidity through auctions on the courthouse steps of the county in which the property resides. If the Government is going to bail them out by buying those properties for pennies on the dollar, why can't we the people get a shot at them?
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Great question. I wonder if it's an efficiency issue? Maybe a bunch of sharks sitting at computer terminals will do all of the auctioning and buying electronically in just a few hours.

 

[anaconda]

Fool! Peasants don't know how to spend money properly! Only the noble bankers understand the nuances of the monetary system!

Bernanke fully understands that money creation results in increased consumption spending and increased private savings, and stimulates the economy. I would like RP to ask him this question to his face? I would pay the price of admission to hear his answer. This seems like such a plausible and theoretically reasonable strategy. I mean, why, exactly, does the infusion of liquidity have to start with the failing banks? Put it in the healthy banks or give it directly to the people. It gets spent and works its way through the banking system either way, I believe.

 

[HOLLYWOOD]

It's what we all have been saying and stating!


When you put the money back in the People's Pockets... the Economy Flourishes!

But the EMPIRE of Banks and Government WANT COMPLETE CONTROL, While, STEALING from the masses.

Government + Banks = EVIL

 

[anaconda]

It's what we all have been saying and stating!

Agreed. BUT NO ONE in Congress has proposed it as a solution for the current crisis. Not even RP. It would be a great counter plan and I think the media and the People would jump on it.

 

[Chase]

We can't just print hundreds of billions of dollars. You have to remember that just a few weeks ago the Fed took the unprecedented step of asking the Treasury to sell a bunch of T-bills to raise the *Fed* some money! My guess is that Bernanke knew he was reaching the limits of what he could sensibly print without causing *immediate* hyperinflation.

But now that the economic situation looks worse, they're talking bailouts and printing again.

The BEST stimulus package the government could come up with right now would be to eliminate the personal income tax and start making massive spending cuts. That could be done with no printing and would result in more legitimate economic activity.

 

[HOLLYWOOD]

SPENDING ALWAYS CAUSES INFLATION...

look at Meidcaid/Care

Dept of Ed

The more money they throw at it, the higher prices go!

I love the Medcare $50 charge for a couple of aspirins

Take the money away... prices drop!

i.e.: Look at the DOT COM BUBBLE

People and companies were paying 10's of millions for Websites... a total joke!

Now anyone can do it for practically nothing.

take the MONEY away from Government and SPENDING will be gone. PRICES WILL DROP.

We really need to get rid of the INSURANCE companies they're the biggest SCAM... they have never LOST MONEY.

 

[amazza76]

What everyone is missing is that the $700 billion isn't just sitting in an account somewhere earning interest....this is money that the Fed will create out of thin air, thus having an inflationary effect and devaluing the dollar further. We cannot sell the notion that this money is better in the hands of the people because...THERE IS NO MONEY TO DISTRIBUTE!!!!!!

 

[Knighted]

Good question. And with such a large stimulus package (I believe that amounts to over $4,000 per US adult), people would be more capable of making their mortgage payments, and that would slow down the chain of defaults. Less chance of default should mean a higher market value for those mortgage securities that the banks and friends can't get rid of.

For the inflation argument, i'd say there will be inflation either way - whether the bailout package is given to the banks or given to taxpayers. But if it's given to the banks alone, taxpayers watch their dollars devalue from inflation and have nothing to show for it.

 

[krazy kaju]

If you just printed money and gave it to the people, you'd have massive inflation immediately. If you taxed some to give to others, you'd have a disincentive to work.

 

[anaconda]

The BEST stimulus package the government could come up with right now would be to eliminate the personal income tax and start making massive spending cuts. That could be done with no printing and would result in more legitimate economic activity.
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Agreed, Chase! But if they are gonna print $700 billion, why not print it into the healthy bank account of the taxpayer, and let them spend it?

 

[anaconda]

For the inflation argument, i'd say there will be inflation either way - whether the bailout package is given to the banks or given to taxpayers. But if it's given to the banks alone, taxpayers watch their dollars devalue from inflation and have nothing to show for it.

My thoughts exactly. The inflation argument seems moot, if it's gonna happen either way..

 

[RSLudlum]

If we're gonna take drastic measures i say:

GUT THE FEDERAL GOVERNMENT and KILL THE INCOME TAX!!!

All wage earners would be literally dancing in the streets, hell i'd throw a damn party!!

 

[anaconda]

GUT THE FEDERAL GOVERNMENT and KILL THE INCOME TAX!!!

All wage earners would be dancing in the streets, hell i'd throw a damn party!!
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Hear, hear!

 

[Fox McCloud]

Ok, assuming the government was to give divvy up the $700 Billion to all of us, then every family (assuming that there's 115,384,616 families in the united States, which is based upon 300,000,000 divided by 2.6, the average family size), that would give every single family about $6,000 to spend.

for some families, this would be used to help get themselves out of debt (well, hopefully, I'm being optimistic here), and some would use it to cover needs. That said, you will, overall, increase inflation in the country. Why? You just gave everyone $6,000 to spend, that's why; they're going to spend it somewhere.

This bailout of the banks will probably cause some inflation, but overall, people still won't get getting loans like crazy, so I don't really think we'll see a massive spike or anything. However, if you bail out the people...you'll definitely see inflation, and if you bail out both parties? I-yi-yi...not something I want to even begin to imagine.

 

[fedup100]

You got to be kidding. Never in a million years would the moneychangers give the goyim and fricken dime. The people wont get it because these basturd's are the very definition of evil greed.

 

[Josh_LA]

You're definitely right.

It's much better to throw money at the ignorant and poor, so the money will find its way back to the rich later. Rather than give it to the rich (which have already shown they F up), and the money may never make it downward.

Sure, like stimulus, it'll cause direct inflation and will hurt in the long run, but it makes people in need happy, and those who are awake will benefit later. The more I think about it, the more I say, socialism isn't a bad thing if you know how to abuse it. We're only against socialism because we're victims of it.

 

[SevenEyedJeff]

What everyone is missing is that the $700 billion isn't just sitting in an account somewhere earning interest....this is money that the Fed will create out of thin air, thus having an inflationary effect and devaluing the dollar further. We cannot sell the notion that this money is better in the hands of the people because...THERE IS NO MONEY TO DISTRIBUTE!!!!!!

Yes I understand that, but if they gave every worker $ 5,000 or so I would be able to take mine and buy gold and silver. And at least this way, we the people would all get an equal share of the inflationary payout.