Though this action is redistributive, it is explicitly not about printing money. It is about spending excess tax dollars. You may have opinions about taxes in the state, and you may have opinions about redistribution, but overall if the state temporarily has a surplus (ie it shouldn't put this money towards increasing long running programs that will become a burden in future years), shouldn't it give that money back to the citizens in some form?
Unless the problem is with your wheels.
But Keynes advocated that governments should have surpluses in good times and spend more in bad ones. Normally because the state isn't able to carry a continuing large surplus, this isn't possible; it has to cut in lean years and give rebates otherwise. It's only in this short period of reversal in consecutive years that we can approach that policy. I'm guessing the same checks would have done more good if they could have waited until 2023 or later.
Do the fairly simple geometric series from that and you'll discover that all money creation generates additional taxation that extinguishes it - to the penny. All that changes with the tax rate is the number of hops before the money impulse disappears.
What you have to do to balance the system is remove some hops elsewhere. That's what threats about interest rate rises are supposed to do. Money then isn't created by loans, or the transaction hops from those loan creation events are fewer.
That reduction is what we call 'saving' and tends to show up in aggregate as a government deficit. The bigger the deficit, the more saving there was and the fewer transaction hops in the economy.
Saving is little more than voluntary taxation. The current approach is to go down the voluntary route rather than the compulsory one - largely because the population won't sanction any further taxes.
If the money used to purchase energy causes a large rise in the government deficit (or a significant reduction in the loan growth rate) then that will 'pay' for it without causing inflation.
Yes but the energy crisis isn't evenly distributed across the world. NA, for example, is still doing relatively well. While Europe is being hit relatively hard by the shortage and will likely have to import from more expensive sources than previous years to make it through the winter.
Furthermore, the way the European electricity market works[1], other energy sources are also bid up when the price of gas increases iff this gas is needed to ensure supply in a given hour of the day. So we have been overcharged both directly (gas), mostly indirectly (electricity) and completely indirectly (goods inflation) throughout all of 2022. This is seriously hollowing out the budgets of some European families.
I don't agree that blanket handouts are the solution, but some kind of compensation is needed to those most exposed, otherwise they will sink into poverty.
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[1] : https://energy.ec.europa.eu/topics/markets-and-consumers/eu-...
> European governments printing more of their own currencies to give handouts to their citizens, resulting in inflation
couldn't they just tax it back from the wealthy in the end...?
This takes us back to what I wrote originally - why is inflation the way to do this as opposed to just tax and spend? That is, why not create a specific tax and implement that and use the proceeds to pay for poor people's energy? Money printing is just a dishonest way to sneak a tax in on people who might not recognize it as a tax.
There's also the political cost. I'm in favour of democracy in the ideal case, but obstructionism looks like a concern in some countries, people buy into lying spin and vote against their own interests, bills have their own cadence, and lawmakers are not always intellectual powerhouses. Case in point: the BoE reacted within hours to reduce the damage done by Liz Truss
Think again. You can't create energy by cutting taxes either. The tax cut can only be spent on energy, exacerbating the problem by making wasting energy much cheaper.
A check on the other hand discourages people to buy expensive energy because they could be spending the subsidy on something else that isn't energy constrained.
Capitalism's own solution so far was to create more available properties - more individual debt such as credit cards and mortgages, privatize public goods like health and education, more destruction of ecosystems, selling attention and disrupting work, and the latest fad, cryptocurrencies. But these are only temporary solutions, they do not address the core problem of increasing social inequality.
Likewise, printing money and giving them to the poor (while half of it goes directly to the top, because the decision-makers are only human) is a stopgap solution in the system where most money quickly end up accumulated at the top. It's a desperate attempt by governments to maintain social order.
In the middle of 20th century, the capitalism's tendency to create disparity was somewhat resolved in Keynesian approach, where state "investments" (based on taxation) were basically redistribution of the money back to the bottom, so that the process of accumulation could continue slower and indefinitely. That was eventually abandoned, for ideological reasons (people shouldn't get "free money", and the "private property" is sacrosanct).
However, it is the only known solution. The proper taxation of the rich (and property) is badly needed to long-term stabilize the capitalist system.
One could make an analogy with any other competition. When another competition starts, winners (of the old competition) are usually given the same place at the start as everybody else. This is because without this rule, the competition would quickly demotivate everybody. But this is happening under neoliberalism, and threatens to eventually halt the positives of the capitalist competition.
Well. Its capitalism's end. Neoliberalism is just an attempt to return to actual capitalism that existed back at the end of the 19th century. Before those pesky regulations, antitrust laws, all those workers' movements and rights for the plebs...