Posts Tagged ‘Quantitative Easing’

Jeremy Corbyn: What’s his economic plan?

August 27, 2015

Paul Mason sort of explaining Quantitative Easing.

There is though a flaw in in his explanation of what could be called Classical Quantitative Easing, yes, the money did flow to the banks, yes, it did then flow into the stock market, into commodities like gold, but it did not trickle down into the real economy. The only beneficiaries were the rich who got richer and the bankers with bigger bonuses.

The problem is, the rich do not spend money, they hoard money.

Had the money been given to the poor, it would have been spent in the real economy because the poor are always living on the edge.

Quantitative Easing is simply a fancy phrase for creating money out of nothing. So far £375 billion.

Jeremy Corbyn is proposing a People’s Quantitative Easing, which would be spent on amongst other things much needed investment in railways (in public ownership).

So far so good. But there is an underlying problem, Quantitative Easing may not work a second time. I will not attempt to explain why here. Paul Mason explains why in PostCapitalism.

There is another problem. We have hit the limits to growth. A good explanation in Sacred Economics.

There is also a fundamental economic problem. Economic cycles of 50 year cycles, Kondratieff Wave, an up cycle of 25 years, a down cycle of 25 years. We are currently in the down cycle, which has lasted longer than expected.

Since 1973, debt as percentage of GDP has increased across all G20 countries.

Quantitative Easing

June 25, 2015

£375 billion was poured into the UK economy, or to be correct, it was poured into the banks, those same banks that destroyed the UK economy. It pumped up the share market, lined the pocket of bankers and the rich.

We have an economic illiterate Chancellor of the Exchequer who cut money paid to the poor.

Giving money to the rich has negligible effect on the economy as there is a limit to the number of servants you can employ, the number of yachts, mansions, jets you can buy.

Handing money to the poor, even of they fritter it away on drink, drugs and widescreen TVs, is money spent in the economy.

The poor, by their very nature of being poor, are living on the edge, will spend extra money, as there is always a need, clothes that are worn out, household appliances that need repair or replacement, maybe even better food.

We could have increased welfare payments, given a  windfall, left money in the street, a lottery based upon National Insurance number, we could have given students grants for university fees.

The money could have been spent on infrastructure, on an improved nationalised railway, on locally owned and controlled local power grids, on books for libraries.

%d bloggers like this: