Thursday, 23 August 2012

Enriching the Rich

We are told by the Guardian that the richest 5% of people benefit most from Quantitative Easing 

Why am I not surprised? I have always believed that QE was a way of diluting the assets of the ordinary people and giving the fruits of that dilution to the banks and corporations. Just as every other stimulus they dream up like boosting house building or green energy or HS2 simply gives money to their friends in industry and commerce in the hope that a minute proportion will reach the man in the street by providing a few extra jobs.

If the Bank of England or the government really wanted to jolt the economy with a boost they would do it the other way round and feed the money into Englands small businesses, shops and tradespeople in such a way that it was spent, not hidden in banks. That could be done by a VAT holiday, or a fuel duty cut, or any number of tax concessions, but I have an alternative idea.

Every household, after payment of their council tax, should receive vouchers worth some hundreds of pounds. Lets say £500 worth, which adds up to considerably less than the quantitative easing that has been given to the banks. The vouchers could not be saved or paid directly into the bank, but must be used within 12 months to purchase goods or services from a  business in the county of issue, and only a registered business in that county would be able to pay the voucher into their business bank account. While some people would spend the vouchers and save other money and some of it would go on import goods basically every penny of the QE would feed into the real everyday economy at local level where it benefits local business.  

If I can think up something as simple as that why are they thinking of giving the banks more money to sit on?


  1. was a way of diluting the assets of the ordinary people and giving the fruits of that dilution to the banks and corporations

    Not so much a trickle up effect as a fountain of blood.

  2. I tend to think that enriching the rich is what it's all about. Always has been of course, but it seems to be getting more blatant and blatant means - we don't care what you think about all this.

  3. They tried it in Japan:

    Stop the banker-bashing! Haven't the poor bastards suffered enough? Surely every word of your mild criticism must be as a scalding-hot iron to them. By golly, I shouldn't want to be one of those miserable unfortunates.