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Wednesday, December 10, 2008

And today's solution to economic meltdown is...

One of the bracing features of the current economic problems is there is more discussion of genuinely radical courses of action than usual. In today's Guardian Simon Jenkins reckons that more good would be done giving everybody a thousand pounds and forcing them to spend it than in spending the same amount of money trying to unfreeze credit.
Get people to spend by giving them money, and just stop them saving it. Give them non-cashable vouchers for domestic goods and services that expire in three months. Drive them to the high streets, supermarkets, restaurants, entertainments, garages, anything that is not saving and has an employment multiplier effect. Only firms should be able to bank the vouchers. Demand must feed straight into business revenue, because revenue is collateral for credit. Without revenue, boosting credit is pointless.

I'll buy that.