I was sat in a cafe recently and on the next table to me was what I call a "Mother Daughter". The mother was a pensioner (a senior). The daughter had travelled a couple of hours to catch up with her mum.
The mother spent most of the hour I was in there complaining that her pension did not go as far as it did in the past. Clearly she was struggling to maintain her standard of living.
Imagine what is happening here in macroeconomic terms.
She is being given, say, $1000 a month to maintain her standard of living. She is not expected to produce anything in return for this.
This is as per the OP's proposal.
The government in the UK has to print a considerable proportion of its spending every year to provide these "tickets" that we call pounds. You call them dollars in the US but it's the same thing !
In the UK the government deficit is about 10% so:
+ At the beginning of 2012 she receives $1000 a month and there are $X trillion tickets in the economy.
+ At the beginning of 2013 she still receives $1000 a month but now there are $X * 1.1 trilliion tickets.
(I am ignoring the measly 1% pension rise per annum they are getting are the moment).
If everything stays the same, she is poorer in terms of purchasing power by 10%.
Printing tickets and handing them out is no substitute for real goods.
The mother spent most of the hour I was in there complaining that her pension did not go as far as it did in the past. Clearly she was struggling to maintain her standard of living.
Imagine what is happening here in macroeconomic terms.
She is being given, say, $1000 a month to maintain her standard of living. She is not expected to produce anything in return for this.
This is as per the OP's proposal.
The government in the UK has to print a considerable proportion of its spending every year to provide these "tickets" that we call pounds. You call them dollars in the US but it's the same thing !
In the UK the government deficit is about 10% so:
+ At the beginning of 2012 she receives $1000 a month and there are $X trillion tickets in the economy.
+ At the beginning of 2013 she still receives $1000 a month but now there are $X * 1.1 trilliion tickets.
(I am ignoring the measly 1% pension rise per annum they are getting are the moment).
If everything stays the same, she is poorer in terms of purchasing power by 10%.
Printing tickets and handing them out is no substitute for real goods.
Very interesting write up, I did not know this before.
Can you explain more in depth how she is poorer in terms of purchasing power?
I didn't write it, but I would say the reason is this:
Quote
In the UK the government deficit is about 10%
And maybe I should read up on UK politics. I just know that it's neither what it is in the rest of the EU, nor in the US, but while they have a nice currency they seem to still mess up more than both of them, when it comes to money <-> living, regardless of whether you are poor or rich, which is why I never got into that. Other countries seem to do better, but maybe they are just in between and have a good main street. jim618, are you living in the UK. Can you compare it with the US and/or the EU (I mean countries like, France, Germany, Italy, Austria, Finland, Sweden, Norway, not Greece, Spain or Italy). Already got so much to read up on and would be happy to know the rough differences.
