Skip to comments.Crazier and Crazier Ideas from Government Economic Managers
Posted on 06/08/2014 2:33:31 PM PDT by Kaslin
Are on the way. . . .
It is major news that the European Central Bank has instituted negative interest rates for member banks. This could soon spread to the US and also to consumer accounts. If so, you would find money taken out of your bank account each quarter unless you spend it.
The idea is that if low rates are not yet persuading you to spend, then why not punish you even more for saving. To make this more effective, there would also be a push for all electronic money, to keep you from stashing any away from the confiscation agents. Ken Rogoff, leading Harvard (and Republican) economist has just recommended this as a first step toward implementing negative interest rates in the US.
This is far from the only innovation that could be coming our way. In a speech on June 4, San Francisco Fed Chairman John Williams suggested that the Fed should consider nominal income targeting. He said this could be a creative way to bend the curve in terms of macroeconomic and financial stability trade-offs. What this gobbledegook means is that the Fed would simply create money and then distribute it to parties in danger of bankruptcy and foreclosure.
Isnt that a great idea? Why stop with the bail-out of big banks when you can bail out anyone who gets in financial trouble? That would guarantee the zombification of the economy that is already well underway. Bad business ideas and badly managed companies would live forever at the expense of good ideas and well managed companies.
In a recent post, I suggested that NIPR (negative interest rate policy) could be coming soon and also mentioned some other daft ideas being discussed in central banking circles:
1. Take a leaf from Japan by forcing banks to lend in return for Fed support.
2. Hold interest rates down but simultaneously drive inflation up to as much as 5-6%. With real interest rates at negative 5%, borrowing will soar. What isnt clear in this scenario is why lenders will want to lend, but they can always be forced to do so.
3. Create even more money and use it to buy corporate bonds, stocks, real estate, anything that can be bought, which will flood the economy with money.
Some of the ideas waiting in the wings are not monetary. They include:
4. The government should set an annual borrowing target for the economy. If it isnt being met by the private sector, government will itself step in and borrow to achieve the target. Who cares how the borrowed money is spent, so long as it is spent?
5. The government should issue bonds that will never be repaid. Not simply replaced with new bonds as at presentnever repaid.
6. Employers should have to seek government permission to lay off or fire a worker. This idea of Paul Krugmans is already true to a large degree in France, with the result that employers are very reluctant to hire anyone.
These days government economic managers are like mad tinkerers. Aldo Leopold said that the first rule of tinkering is that you dont throw away the parts. But the PhDs in charge of our economy are disassembling the economy at too fast a pace to listen.
Here’s an idea: Make stuff in America.
(sheesh, that’s crazy talk)
Heres an idea: Repeal Obamacare.
Their ideas are not “crazy” if you understand their totalitarian goals.
Buy stocks or we’ll take your money.
Another crazy idea:
UK Proposes All Paychecks Go to the State First
The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer. - See more at: http://www.abovetopsecret.com/forum/thread612811/pg1#sthash.Li9vSzOs.dpuf
That has come up before.
Negative interest basically means banks would charge you for keeping your dough with them. And of course, they use your money so that they can make money. And they wonder why some people call them banksters.
Directive 10-289 anyone?
Point One: All workers, wage earners, and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment...
Point Two: All industrial, commercial, manufacturing, and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit, nor leave, nor retire, nor close, sell or transfer their business...
Point Three: All patents and copyrights, pertaining to any devices, inventions, formulas, processes, and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift...
Point Four: No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive...
Point Five: Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as is, they or he produced during the Basic Year, no more or no less...
Point Six: Every person of any age, sex, class or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less...
Point Seven: All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive. (But taxes will be allowed to increase as needed for the public good)
Point Eight: All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions shall be final.
Come on, you know you can’t have the serfs moving around. Next thing you know, they are turning into Kulaks.