Because none of the so-called experts have come up with a solution to our anemic economic recovery, Ned will leap into the breech, summon up the blood, stiffen the sinews and etc. Here is Ned's plan to rescue the economy.
Each month, the Treasury will send a debit card to every individual who filed a tax return last year with an adjusted gross income of under $250k. The first debit will contain $1000, and it will be augmented every month with an additional $1000. Here's the catch: the money will have to be spent in the month that it is allocated. Note that it is not a check, which could simply be deposited into a checking account. It must be spent. If there are a hundred million filers who each get $1000 a month, that would be $100 billion a month pumped into the U.S. economy, and it would go to anyone who takes debit cards. Now, Ned can hear some of his followers groan and jeer with claims of "impossible!" and "foolhardy!" and worse. But it will work. Here's why.
In a time of slack demand, issuing money to people who have to spend it will not be inflationary, and, even if it was, a little inflation is the cure for many things, as long as it doesn't get out of hand, like the situation that brought Ronald Reagan to power in 1980, and began the US's slide into mediocrity.
And where would the money come from? Ned can hear his skeptical friends ask. It would come from the Federal Reserve, which can print money whenever it likes, especially since it is not tied to anything like gold or silver. And, Ned hears, won't it simply drive people to buy gold? Ned replies that if people are so foolish to buy gold then let them buy gold and go to the Devil.
In short, Ned's plan will not be inflationary, and it will, believe it or not, not add to the deficit or the national debt, because the money is coming from the Fed not the Treasury. And, since the money will be income, it will be taxed by those states that have income taxes, and will be taxed indirectly by those which only have sales taxes, issuing in a Golden Age of balanced budgets for those states wise enough to have income taxes in the first place, at least.
Ned will wait patiently for his Nobel in Economics, which he expects before the end of the year.
How about this: just bill everybody each year a percent of the budget based on income, including businesses? Or even better, why not a plead-a-thon? The Gummint could write a budget then set up one of those big electronic tote boards and do a 'round-the-clock plead-drive until the goal is met. It's good enough for public broadcasting and Jerry Lewis. I might even do one of my own!
ReplyDeleteI'll take my portion of the Nobel prize in cash.