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Pezerinno

Why Doesn't The Government Give People Cash?

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Why doesn't the government just give people money instead of allowing banks to issue it as debt?

I seem to recall they tried that somewhere and everyone sat on the cash because they were so worried about the state of the economy.

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Guest UK Debt Slave
Why doesn't the government just give people money instead of allowing banks to issue it as debt?

Read the Bill Still threads

The idea of debt free fiat currency is discussed in detail

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Why doesn't the government just give people money instead of allowing banks to issue it as debt?

It does already - in the form of billions of pounds of benefits payments

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Why doesn't the government just give people money instead of allowing banks to issue it as debt?

would cause a currency crash... (worse than the one we already experienced)

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Why doesn't the government just give people money instead of allowing banks to issue it as debt?

let's see, they have a choice between giving everyone some money or giving themselves some money.

er... jeez, i just can't work out why they choose the latter.

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why bother with money at all.

If a man needs water..give it him.

If he needs food..give it him

if he needs work...give it him

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why bother with money at all.

If a man needs water..give it him.

If he needs food..give it him

if he needs work...give it him

If I had the first two why would I want the third?

Who are you going to steal them from to give them to me?

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It does already - in the form of billions of pounds of benefits payments

Yes, this is the correct answer. Well kind of.

The net result of QE is that the Bank of England owns a load of Government Bonds. It is like a company buying its own shares.

These bonds could just be cancelled, as we the taxpayer now owe that money, to ourselves.

The money created by the Bank of England to buy these bonds ends up as money in the Treasury, and is used in Government spending.

So that money ends up being spent by the Government as benefits, MP's expenses, personnel and aircraft carriers, etc. Anything that the government spends money on.

The immediate effect on the banks is zero, as when they sell a Treasury to the Bank of England, they then just go and buy another one off the Treasury, albeit for a slightly lower price of course.

The longer term effect is that the money spent by the Government, ends up in the Bank Accounts of the people that they spend the money on. That is extra funding that can then be used by the banks to forward loans. In theory, this extra money should be compensation for the money withdrawn from the money markets due to the credit crunch.

Lets hope so anyway.

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It does already - in the form of billions of pounds of benefits payments

I was just wondering whether the governments next scheme to prop up the market would be to lend mortgages to those on incapacity benefit. No danger of default.

Edited by wealthy

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