Wednesday, Mar 04, 2009
Why Didn't We Think of That?
BBC: Japan Clears Cash Hand-out Bill
"Japan's parliament has passed legislation to give a cash hand-out to every resident in attempt to boost the recession-hit economy. Most people will get at least 12,000 yen ($121; £86) under the $20bn plan". Easy peasy...just give everyone £25,000 to clear mortgage arrears, buy a car, take a holiday...What could go wrong?
Posted by alan @ 09:03 AM (491 views) Add Comment
8 Comments
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1. yoyo1 said...
'But there are fears many Japanese, who have a strong tradition of saving, will hang on to the cash and not spend it.'
Somehow I guess it will have to be compulsory that you spend it.
2. paul said...
But that's the point - no-one can force them to spend it. This is exactly why these measures never work.
3. davecrash said...
£86 to every resident. Sounds as pointless as Crash Gordons 2% vat cut.
4. Agentimmo said...
"Easy peasy...just give everyone £25,000 to clear mortgage arrears, buy a car, take a holiday"
Isn't that what banks and lenders have been doing for the last 10 years? All these MEW'ers and people with 5 or more credit cards were spending money they hadn't EARNED. That's why we are where we are. In a big mess.
Seems crazy that the cure is more free money !?!?!?!
5. Alphabetzoo said...
Japan's trouble is the enormous money wasted on propping up the zombie banks and consequent cuts in public spending which (surprise surprise) caused people to save even more for a rainy day. They won't solve their problems (nor UK/US theirs) until the bad debts are written off and the culprits go to the wall. However, you can make people spend the money if you use Fisher's system which invalidates the new money after a certain point if it's not spent. Fisher talked sense after he lost his fortune and his stupid neoclassical views.
6. japanese uncle said...
I don't care as I am not receiving a penny.
In UK where people have much less propensity for saving, it may work if its gonna be as big as a couple of hundred of pounds.
7. alphabetzoo said...
Fisher had it right (after he lost his fortune and his stupid neoclassical views) - give it as a currency with an expiry date. THEN they'll spend it!
8. Bawlee said...
Giving it with an expiry date means they can't save it. But it doesn't stop them from using it towards paying a bill, or whatever... and then save the 86 quid that doesn't have an expiry. innit