Germany, Switzerland, Austria join call for return to budgetary discipline
reuters.com
reuters.com
>Germany's Lindner said it had become habit for the state to always rush to the rescue with borrowed money and that had to stop.
No shit. Bit late to figure that one out, eh? Hindsight 20/20.
>"Otherwise, Germany will have to raise taxes to finance the interest on the debts of the past. That would strangle the economy," Lindner said.
Oh, so first you print free money and dump it into inflating assets making the rich obscenely rich, and now Joe Schmoe will have to be taxed to pay for it?
So that's how trickle down at works. Privatize the winnings, socialize the losses.
> So that's how trickle down at works. Privatize the winnings, socialize the losses.
This has been going on for as long as I've been alive. I don't see how it could be possibly be solved with the system being as it is. If anything, with tech enabling increasingly draconian control over people, it will get worse.
I swear Austrian economists have rotten people's brains with their cantillon effect rethoric. They never described the mechanism that somehow wires the money straight to the bank accounts of the rich, they simply assume that this happens without any evidence.
What really happens is this: Lindner introduces a so called vehicle fuel rebate. This fuel rebate lowers the cost of fuel by 35 cents. Gas stations pass some of the rebate but not all of it onto the customer. If the price was kept identical, then demand wouldn't change but if the company lowers the price, there will be additional demand and it will end up with more profits overall. In other words, some companies have a degree of pricing power that they use to increase their profit margins.
When the money supply grows, even if it was paid out fairly to everyone as a UBI, it would slowly end up in the hands of companies with pricing power and this pricing power has absolutely nothing to do with the money that is being used. A gold standard or Bitcoin wouldn't save you from this. It will just mean they have all the Bitcoins or all the gold.
Edit: I would also mention that in a zero lower bound system, it is impossible to pay off all debts without debt deflation which in turn means that you would have to design your monetary system around the expectation that not all debts will get paid and that you will have to do regular debt jubilees. The real world isn't a permanent competitive equilibrium.
Because outrage is easier than understanding.
But it wasn't paid out as UBI. The extra money supply didn't get dropped from a helicopter to the people, it went into low interest loans which which only went into high value assets, not to wages.
There weren't many scenarios where that money first went through the working class before reaching the wealthy.
Unless you can explain to me otherwise.