Fighting the liquidity trap

If you don’t like public spending you could do it this way: Give every voter a federal debit card. And put the money in their accounts. Tell them if they don’t spend it this month, the government will take it back.

Some people will try to cheat and find ways to save the money, but probably not many.

Some people will use the money to pay down their credit cards. That’s good. The less they pay in interest each month the more they can spend.

That’s J Thomas from the MR comments and you can think of it as Silvio Gesell plus some modern technology.  I’m not recommending this policy, just noting that in terms of stimulating aggregate demand it both vanquish a liquidity trap and it would outperform government spending or what I call "raising taxes in the future."


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