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incredibly scurrilious dodgy economic revival plan
833 Billion economic resuscitation package is actually 2.4 Trillion over 30 years with financing Our plan (tm) Pays gratuitious makeworker salaries more if they save part of the money thus creating a wider resuscitation watershed | |
When a person borrows 100K then repays over 30 years at typical mortgage rates the total amount repaid is near 300K Thus the 833 Billion economic resuscitation package is actually 2.4 Trillion
Even I think thats a lot of money
Back when I actually earned money a bunch of it went to rent plus
restaurant food Thus much of the 833 Billion is going to go towards rent plus restaurant food at triple what is says on the menu When a makework deficit financed employee gets a $7 value meal it costs the government $21 Kind of (inflation, the planned stimulus synergism, debt at the margin compared with debt as a pt of all expenditures)
lets say there is an Obama artist who gets paid $2k per month to write at the halfbakery on a keen honest croissants only compensation scheme
Now lets change the pay structure: they could earn up to 2400 per month if they save more than $400 as medium liquidity assets Since we know a stimulus package is just tossing people money Its kind of the same thing
At some point we find the point of Thrifty Exuberance the place where people are willing to earn just 1700 per month cash to save 700 each month
although they are buying less restaurant food n rent they are buying a much wider variety of goods possibly things similar to 401(k) technology shares, timeshare old masters, global currency funds with the provision that liquidating these takes a few years
The makework employees are also voluntarily being thrifty which is a valuable social mobility asset
Its just a little like giving the makework workers deeper financial reserves (as well as knowlege of planning) rather than rapidly metabolized fast cash There is also the possibility that they might earn more than the treasury rate (the rate the government borrowed at) on their medium liquidity savings thus bringing more things to more people while reducing taxes over time
NB: I was hitchhiking n a person asked me how to provide more benefits with fewer taxes
Finding the point of Thrifty Exuberance is one way
also different professions will attract different personalities with different points of thrifty exuberance People that are recruited to do civilian conservation corps work might have very different thrifty exuberance points compared with tutors or online artists
Economics in One Lesson
http://jim.com/econ/contents.html
check out chapter 24 The Assault on Saving. I highly recommend this author. [MercuryNotMars, Feb 13 2009]
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With the state of the US infrastructure, I'm not sure there really is a need for "makework". There's something like $2 Trillion worth of work that needs to be done just to bring US roads, bridges, dams, schools, airports, trains, etc. up to the level they should be. |
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that's not makework, that's work. |
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I don't understand, but am tempted to bun for the phrase "thrifty exuberance" |
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As usual I can't figure out if this is a clever idea hiding behind atrocious writing or an atrocious idea hiding behind some clever writing. |
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I may be wrong but what I think beanangel is saying is that encouraging people to invest rather than spend is a better way of stimulating the economy, which is not a new idea.
The idea (as far as I can make out) is to pay people more providing that they promise to invest a certain proportion of their income. |
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While this goes totally against the idea of spending money as the savior of the economy there is nothing wrong with saving. A penny saved and invested is a penny spent more wisely. |
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The idea behind "pump priming" is the fallacy that saved money is somehow the cause of recession. Somehow demand must pick up and supply will follow. Spending money that is not backed in the economy by supply will somehow magically inspire people to sell (inflation without price increases?). Sticky prices from seller's stupidity are the magic fulcrum from which Keynesians will move the world. |
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In fact wealth is defined by having the goods and services that you want in abundance. That is achieved by making stuff and doing things. How this plays out is that people make what other people want and so they have to get off there butts and make stuff that other people want. A recession is simply the opposite of that. The economy has discovered that it has different wants than are being supplied. People who produce what people don't need loose their jobs while painful it's their own fault for not properly guessing what the rest of us need. We demand that they get busy making and doing something else. People who want to help them should save and invest in profitable sectors of the economy that need to expand to accommodate the real needs of the economy. Consumption, nullification, and expenditure of goods and services takes them out of existence. wastefulness is not and ends. Saving prioritizes profitability which prioritizes the greatest need.(that's a bun for you) |
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If you want to help the economy be productive. If your company can't afford the hours you want to put in check out the private sector job market because they are motivated by profit. |
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I am glad the world has infrastructure. We are richer for it. There is however an unseen loss to society of the goods and services that would have been otherwise made. Wasteful spending is always wasteful. We look at the good and the bad sometimes. While we cannot look at alternate realities let me assure you that you should look at government expenditures as the mediocre and the bad. Unlike the private sector motivated by profit bad programs don't die. They do however tie up labor in making things that society may or may not want enough to warrant their existence. This is the same thing that causes recessions only persistent. If not for government taxation and borrowing, just as much capital would be available in the private sector. Let’s inject capital in questionable endeavors and take it out of the healthy functioning part of the economy. Let’s tie up labor and slow down the transition that the market demands. Let’s prioritize full employment over productivity. |
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[beanangel] There is nothing wrong with your idea but you are in stark contrast with the stated goal of this plan. Your idea is the stated enemy of this plan. |
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Supply is demand and saving is spending without expending. |
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I've never heard of "sticky prices" before. I thought it was "sticky wages". |
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your English is getting a lot better. (+) |
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sticky wage numbers in inflation would mean employers pay less, which means nothing either other than sellers of work get tricked. Sticky wage prices. Again, taking advantage of it is nothing I support . |
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I may be wrong but what I think beanangel is saying is that encouraging people to save rather than spend is a better way of stimulating the economy, which is not a new idea. |
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The idea (as far as I can make out) is to pay people more providing that they promise to save a certain proportion of their income. |
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phoe, I did actually use the word "save" rather than "invest" in the first draft of my anno but beanangel's use of the term "medium liquidity savings" led me to think in terms of some sort of bonds or debentures rather than cash deposits at the bank, i.e. direct investment in company stock rather than having a bank as the middle man. The advantage of investing directly rather than having a cash deposit that the bank then reinvests, is that you get to choose where your money goes and the bank doesn't get a slice. Traditionally the downside of this is that you take on all the risk yourself. However, I suspect that people's perception of the relative risks of these two options have changed somewhat over the last 12 months. |
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What's the risk when it's free money from the government? Anyway, the "saving" version is just Social Security at the local level. As for investing, well, it's a buyer's market right now. |
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