Free money : no catches

[rob murray]

Tomorrow at 12 00 a helicopter will circle Wick and drop £5 million in newly printed legit £20 pound notes on the town, drop at 14 00 in Thurso and between 16 00 - 20 00 drop money into all villages : in all £20 millions will be dropped from the sky, assuming poeple can catch the money, questions for you : how much of the money will be banked ? how much will be spent ? what will happpen to the Caithness economy in the short term ? : And yes it can easily happen, governments print money...


An interesting dilemma eh...lets hear the responses !

[madmax]

Can you let me know what you're drinking :)
Have you heard about the recession?? The Goverment are taking more money from us !! Not Giving Us....

[rob murray]

Can you let me know what you're drinking :)
Have you heard about the recession?? The Goverment are taking more money from us !! Not Giving Us....

A Im not drinking
B What creates a recession : a lack of consumer demand
C I would well imagine that money dropped would be at least 80% spent
D Spending creates demand
E Demand has to be fullfilled. things bought / more things made / sold etc

So instead of dropping money from the sky lets target useful spends eh ! or do you really believe that governments are helpless by standers and can do nothing to alleviate a recession ?? tell me what your drinking ?

[madmax]

I'll have a Jack Daniels thank you very much.

I think we need to get the scroungers that are quite capable of working off benefits and working.
Adopt Australias imigration procedures and only allow folk into the country that can support themselves and bring some good to the country.
The Goverment regularly give away millions to people who "choose" not to work. There are jobs out there !
I once had a guy turn down a job because I wouldnt let him take a works vehicle home with him and the bus cost too much !! Seriously !
A good proportion of benefits paid out in this country go abroad to other countries to support their families!
Oh and if someone dropped £5 million in my garden I'd certainly spend it, after the unclaimed period has passed with the Police.

[Corrie 3]

My guess is that 80% of this money will be blown into the sea!!!

C3.

[Gronnuck]

I don't have to wait for any helicopter to drop money. The nice widow of the displaced Nigerian Treasury Minister whose name is all but unpronounceable has chosen me to help her move $100,000,000,000 to her Swiss bank account through my UK bank account for a substantial fee ($10,000,000). I've given her all the details of my Sylvester & Sprocket account and awaite vast wealth with glee!

[madmax]

Lol Corrie it depends on the wind though...
Maybe the helicopter will allow for that..

[madmax]

Gronnuck I must be your cousin :) Think I got a similar letter.
I wonder if the helicopter will give me a free spin around Caithness? Never been in a helicopter :)

[rob murray]

I'll have a Jack Daniels thank you very much.

I think we need to get the scroungers that are quite capable of working off benefits and working.
Adopt Australias imigration procedures and only allow folk into the country that can support themselves and bring some good to the country.
The Goverment regularly give away millions to people who "choose" not to work. There are jobs out there !
I once had a guy turn down a job because I wouldnt let him take a works vehicle home with him and the bus cost too much !! Seriously !
A good proportion of benefits paid out in this country go abroad to other countries to support their families!
Oh and if someone dropped £5 million in my garden I'd certainly spend it, after the unclaimed period has passed with the Police.

Where exactly is the work you refer to ? Oh I know,according to government policy, benefits will drop to such a low level that people are priced into taking very low waged work, (or want) thats fine eh...so people affected then dont have a lot to spend...so how does the economy grow to create the required ongoing jobs. The government I take it, can re invest the saved benefits money on public projects, so why dont they do it now ?

[rob murray]

Gronnuck I must be your cousin :) Think I got a similar letter.
I wonder if the helicopter will give me a free spin around Caithness? Never been in a helicopter :)

Its actually great fun, and Im sure you will enjoy seeing people chasing after the money...after all they have to do something in return for it eh ! Running miles swimming out to sea..

[Bill Fernie]

This sounds like Demand led growth and a statement on Wikipedia gives a brief description - Demand-led growth is a theory in Macroeconomic (http://en.wikipedia.org/wiki/Macroeconomics) growth theory (http://en.wikipedia.org/wiki/Economic_growth) which is based on the Keynesian (http://en.wikipedia.org/wiki/Keynesian_economics) principle of effective demand (http://en.wikipedia.org/wiki/Effective_demand). Under demand-led growth, the capacity of the economy to supply output expands in response to an increase in the level of effective demand, which is the inverse of classical growth theory (which relies on Say's Law).

On the other hand Wikipedia can also supply a reference on consumer confidence that tends to throw another factor into the mix - Consumer confidence is an economic indicator (http://en.wikipedia.org/wiki/Economic_indicator) which measures the degree of optimism that consumers (http://en.wikipedia.org/wiki/Consumer) feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if the economy expands causing consumer confidence to be higher, consumers will be making more purchases. On the other hand, if the economy contracts or is in bad shape, confidence is lower, and consumers tend to save more and spend less. A month-to-month diminishing trend in consumer confidence suggests that in the current state of the economy most consumers have a negative outlook on their ability to find and retain good jobs.

If more people are cutting back on spending, not borrowing, paying off debt then that affects other people's jobs and so on ad infinitum. Governments know that if they can stimulate spending then the economy picks up and they will reap the benefits. Although there are plenty of theories and they have been churned around for a long time no government seems able to stop the cycle of ups and downs. The problem for the UK government is that their options are limited due to the banks bale out. Public sector debt reach and all time high for the UK today despite all the cuts and quantitive easing ( away of adding money to the supply but may reduce the value of investments, pensions and so on)

This is a debate that economists and governments have pondered for a very long time.

My question might be. Does anyone think we can buck the trend in a micro economy like Caithness. If we all rush out and spend some extra in the shops and hire some labour to get little jobs done, "spend it in Caithness" than elsewhere can we start the upward cycles to create jobs and reduce unemployment in our own backyard. Or are we all in reverse gear saving more just in case and maybe our savings get devalued in the process. Sometimes what is good for the individual is not so good for the economy in the short-term.

If you have the answer then please tell the chancellor as well as sharing it here as your take would appear to be as valid as the experts as so far they don't know the answer. Of course everyone wants it to change and many folk are trying to spend more in government but with cuts in all areas of public expenditure are various announcements of spending just spitting in the wind.

[madmax]

If they adopted the proper imigration policies there would be more jobs.
I have never been out of work for more than a week in the last 28 years because when I needed work I would take anything that was going, full time, part time, nightshift etc etc. I'd do it.
Folk these days turn down jobs because benefits pay too well.
Quite right for the goverment to drop benefits, there are folk on benefits driving better cars than me and I work full time!
Dont have a lot to spend?? Try working, paying mortgage, council tax etc etc..... Doesnt mean I have a lot to spend. I save, dont smoke, have occasional drink or night out when I can afford it. :)

[calish6]

Rather late in the year for an April's Fool !!

[Kodiak]

I hope the Helicopter Pilot keeps some of the 1,000,000 Notes that he drops, for all the Littering fines he will have to pay.

[rob murray]

This sounds like Demand led growth and a statement on Wikipedia gives a brief description - Demand-led growth is a theory in Macroeconomic (http://en.wikipedia.org/wiki/Macroeconomics) growth theory (http://en.wikipedia.org/wiki/Economic_growth) which is based on the Keynesian (http://en.wikipedia.org/wiki/Keynesian_economics) principle of effective demand (http://en.wikipedia.org/wiki/Effective_demand). Under demand-led growth, the capacity of the economy to supply output expands in response to an increase in the level of effective demand, which is the inverse of classical growth theory (which relies on Say's Law).

On the other hand Wikipedia can also supply a reference on consumer confidence that tends to throw another factor into the mix - Consumer confidence is an economic indicator (http://en.wikipedia.org/wiki/Economic_indicator) which measures the degree of optimism that consumers (http://en.wikipedia.org/wiki/Consumer) feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if the economy expands causing consumer confidence to be higher, consumers will be making more purchases. On the other hand, if the economy contracts or is in bad shape, confidence is lower, and consumers tend to save more and spend less. A month-to-month diminishing trend in consumer confidence suggests that in the current state of the economy most consumers have a negative outlook on their ability to find and retain good jobs.

If more people are cutting back on spending, not borrowing, paying off debt then that affects other people's jobs and so on ad infinitum. Governments know that if they can stimulate spending then the economy picks up and they will reap the benefits. Although there are plenty of theories and they have been churned around for a long time no government seems able to stop the cycle of ups and downs. The problem for the UK government is that their options are limited due to the banks bale out. Public sector debt reach and all time high for the UK today despite all the cuts and quantitive easing ( away of adding money to the supply but may reduce the value of investments, pensions and so on)

This is a debate that economists and governments have pondered for a very long time.

My question might be. Does anyone think we can buck the trend in a micro economy like Caithness. If we all rush out and spend some extra in the shops and hire some labour to get little jobs done, "spend it in Caithness" than elsewhere can we start the upward cycles to create jobs and reduce unemployment in our own backyard. Or are we all in reverse gear saving more just in case and maybe our savings get devalued in the process. Sometimes what is good for the individual is not so good for the economy in the short-term.

If you have the answer then please tell the chancellor as well as sharing it here as your take would appear to be as valid as the experts as so far they don't know the answer. Of course everyone wants it to change and many folk are trying to spend more in government but with cuts in all areas of public expenditure are various announcements of spending just spitting in the wind.




Bill, yes youve picked up my essential arguement which is based on the role of government (who else ) in tackling depressed economies, the helicopter money drop is a classic moneterist arguement ie you may as well print and give the money away...but supposedly that would effect inflation, ie excess money availbility pushes up prices which in turn will deflate the economy. the other monerist classical economic theory is based on the premise that there can never be unemployment people price themselves out of work or supply creates its own demand. Keynes proved without a shadow of a doubt that this was conceptually wrong, in an area with little to no work how can people price themselves into work if work isnt there ? In economic terms the government can and has been printing money, under classical economic theory this act should push inflation up, but the money is not going into the real economy but to banks to bolster up balance sheets and prevent a banking crisis ( ie northern rock on a volcanic scale ) not inot the real economy where wages /prices etc would rise. However, they have achieved banking stability, so the issue is the real economy and how to kick start that. Left alone, with depressed demand, you rely wholly on the private sector to do this, so what can they do, invest in new plant and technology to make stuff take poeple on....why do that when demand is supressed not enough consumer spending so private sector "growth" is impacted by a lack of spending. the UK government can print and issue money aimed directly at massive infrastructure projects, this can be financed on the bond market and our credit is good overall so there is space to print / underwrite money. The arguement has really nothing to do with economics its based on political ideology based decisions and the prevailing political wisdom in dealing with the ongoing depressed situation is based on disproved nonsensical classical economic theory. Says Law : supply creates its own demand : the corner stone of classical economics has long been disproved. When I studied economics there was a prevalent theory which underpinned conservative ideology TINA ( there is no alternative : therefore as a government we wash our hands of the situation, control the money supply and some day, in the long run, things will sort themselves out : classical / laissez faire economics ) Wrong on all counts !!!

[rob murray]

If we adopted a buy local policy, ie keep as much money as possible in Caithness that pre supposes the existance of a lot of Caithness owned and operated independant businesses, which is not really the case, given the presence and footprint of large scale retailers as an example etc. Also there would be a displacement effect else where, ie money taken away from other localised economies which would depress them further so they in turn would retaliate and you'd have a price war effecting labour / wages / demand. You make a good point on savings, rates for savers are as low as ever, caused primarily by government intervention in banks, so banks can offer low rates to savers as their liquidity requirements have been shored up by the government. But even if rates were high at say 10%, and banks became awash with savers money ( which they are anyway ,but the supply at 10% rates for savers would increase availability of money availability ) and offered money / loans at next to zero %, would businesses borrow, for what....if consumer demand is suppressed then business doesnt have the confidence to borrow ( even at zero % : which was the case in Japan during the 90's early 00's )

[rob murray]

I hope the Helicopter Pilot keeps some of the 1,000,000 Notes that he drops, for all the Littering fines he will have to pay.

Well do you think people will walk past £20 notes ? We can add to the theory by employing people to pick up the money ?

[rob murray]

An english gentleman goes on holiday to a remote south seas island sometime in the 1890's. He pays for transport to get to the island and back to the UK. Everything he consumes on the island, he pays for with guaranteed cheques, years after he returns home, no cheques have ever been presented at his bank for payment : so who paid for his holiday ? And what do you think his cheques were used for ?

[madmax]

Lol I'm bored now :O

So......
What came first....The Chicken or the Egg?

[Bradcon]

Tomorrow at 12 00 a helicopter will circle Wick and drop £5 million in newly printed legit £20 pound notes on the town, drop at 14 00 in Thurso and between 16 00 - 20 00 drop money into all villages : in all £20 millions will be dropped from the sky, assuming poeple can catch the money, questions for you : how much of the money will be banked ? how much will be spent ? what will happpen to the Caithness economy in the short term ? : And yes it can easily happen, governments print money...


An interesting dilemma eh...lets hear the responses !
aye heard davie kirkwoods the pilot.

[rob murray]

Lol I'm bored now :O

So......
What came first....The Chicken or the Egg?

heres a hint...the englishmans cheques were used as the basis of founding a currency, some one gathered up all the cheques and on this basis created a currency issuing notes therefore moving from a barter economy to a money based economy, notes based on the value of the cheques if redeemed which they never were...what underpinned or proved the confidence was the store of cheques, or simply put confidence on the redeedable value. Note the key word confidence !! Now once upon a time money / currency was based around a gold standard or the amount of gold reseves a country held dictated the amount of money in circulation...bank notes inferrred that the bearer when presenting money to a bank woud be paid in gold...look at your notes now pull one out your pocket,....it says on presentation the bank pays you in sterling....now whats sterling and whats its value ? Moving from a the gold standard, governments can print anything, and if they can print money they can print money to fund public infrastuture projects to stimulate consumer demand. Ok...I now realise that however simple this concept is put I am going knowhere with you, youve an opinion, no you dont, you spout just simple bloody cheek..answer your own question if you can, "what came first chicken or egg" what do you actually mean by this ?...now you tell me oh mad one..all Ive read from you is garbage about immigrants, benefits and you blowing your own trumpet over your supposed work record....and you know what I dont believe you, not a word, for all I know you havent done a days work in your life lo lol lol so come on then, what came first the chicken or the egg and why?? Your just spouting prejudice hiding behind a by name you arent even man enough to stick your own name on your offensive postings

[rob murray]

I originally placed this thread to see if we could a debate going and analysis on government policy given the worst financial crisis / depression since the 30's and the sheer lies and nonsense we the populace are being fed by the pevailing powers. It seems I wasted my time given the responses and lack of them, Bill Fernie at least attempted to widen out and add to debate, as for the rest, read Robert Tressel available in any public library.

[madmax]

Lol I've worked all my life, If the goverment changed the way the country ran it would help the recession, put the money back into the british pockets and not out of the country.
Chicken or Egg, No clue.
Why dont we start a Caithness X Factor and see if we can put together a Rock N Roll band...... Bring the money home to Caithness...
Sorry I ruined your debate but hey such is life and we all have different opinions.
Helicopters dropping cash is just nonsence to me so what can I say. Did you expect different replies?

[gleeber]

B What creates a recession : a lack of consumer demand
So instead of dropping money from the sky lets target useful spends eh ! or do you really believe that governments are helpless by standers and can do nothing to alleviate a recession ?? tell me what your drinking ?

I think thats only a symptom. The recession is already in full swing before it becomes apparent and people stop spending, but its not as simple as that either. Everyones different. Its easy to point the finger at people who spend money on what others may call foolish but without them you wouldnt have a capatilist system based on economics.
my question is how do you have a capatilist sytem based on something other than money? Why should money be the cornerstone of our lives?
Ive tried to follow some of the links from Bills post but the more I clicked the less interested I became. Consumer confidence is considered as an economic indicator. I know theres more to economics than consumor confidence but I would rather have a pocketful of confidence than a pocketful of pennies.

[piratelassie]

Instead of banging on about benifit scroungers , why is nobody complaining about the tax dodgers?

[Bradcon]

Instead of banging on about benifit scroungers , why is nobody complaining about the tax dodgers?

if u want to talk about rangers go to the sports section.