Monday 18 July 2016

Do you want free "helicopter money"?

Anyone daydreams of receiving free money without doing any work? This can be done by the government, which is called by economists "helicopter money". The idea about "helicopter money" is that a government gives its people free money in order to inject cash flows into the economy by encouraging consumption. Is there any circumstance that such free money is not welcome? Of course, there is. The problem could happen when the government how much it will give to its people. Especially with a large number of money each person can receive, equal payment is not welcomed by the people who previously have higher income, as after such payment, the difference between their wealth and the wealth of the rest of the population becomes smaller. In terms of real value, their wealth could decrease. Moreover, even without the complaints of the rich, even the poorer people do not receive a huge amount of free money. Once everyone receives such free money, people expect there is a big increase in the inflation rate, your wealth which is mostly cash becomes worthless, while the real assets which mostly belong to the rich become more valuable. Therefore, when everyone receives free money, no one wants a big dividend for all of the others.

No comments:

Post a Comment