Money supply and the consumer - social engineering in action

Discussion in 'Economics' started by drsteph, May 4, 2009.


    Relevant parts:
    So, it seems the plan is to increase liquidity this year, then take it away next year.

    Since most folks 'spend' their paycheck instead of saving (or have in the past - jury out on this one for the future but old habits die hard), they will inject it into the economy NOW. Idea being is that once things ramp up again, the excess liquidity can be withdrawn next year through an offset on the taxes, taken from a refund that hasn't hit the economy yet. Or at least that's how it should work for the bottom 2/3'rd of taxpayers (my back of the napkin calculation).

    Consumption smoothing?

    Very interesting to see how policy is coordinated like this. Do you see any other signs of similar medium term activity? Post.
  2. I would gladly take it............but I hate those Keynesian policies. Oh well.