government should create jobs!

Nijmegen

digme wrote: »

Hows this.

A council issues a certain percentage of your wages in punts.
They then accept back those punts as payment for motor tax,rates,vat,etc. That would free up a massive amount of money.

I'm sorry digme, but that's just not how it works! You could never create a balance between the amount of punts vs euros you pay into the economy to cover the cost of all goods and services, and you still get the hyper inflation at home.

There's a reason the only countries to try this are backwards and went to the wall.

There is no such thing as 'free money'.

digme

Nijmegen wrote: »

I'm sorry digme, but that's just not how it works! You could never create a balance between the amount of punts vs euros you pay into the economy to cover the cost of all goods and services, and you still get the hyper inflation at home.

There's a reason the only countries to try this are backwards and went to the wall.

There is no such thing as 'free money'.

If the money is earned, not lent and thus payed back to the council.How is that going to cause hyper inflation?

Nijmegen

digme wrote: »

If the money is earned, not lent and thus payed back to the council.How is that going to cause hyper inflation?

I think GUIGuy gave a good explanation?

We can discuss economic theory, or we can say this: Why is it that only failed economic backwaters have two currencies, and they usually go on to collapse entirely?

digme

Nijmegen wrote: »

I think GUIGuy gave a good explanation?

We can discuss economic theory, or we can say this: Why is it that only failed economic backwaters have two currencies, and they usually go on to collapse entirely?

GUIGuy's explanation ?
What do you think europe does? It uses a local currency, the euro.
And for external trade, it uses mostly the dollar.

Finnbar01

digme wrote: »

we have the euro? We can create and issue our own money for Ireland at zero percent interest.

And who would want the newly issued irish punt over the euro?

digme

Finnbar01 wrote: »

And who would want the newly issued irish punt over the euro?

You'd use both.
You'd have to earn the punt, you can still get a loan of the euro from a "bank".

Finnbar01

digme wrote: »

You'd use both.

But people would prefer the euro, as the new punt would be worth next to nothing.

The only way this could work would be for the government to actually ban the euro altogether.

digme

Finnbar01 wrote: »

But people would prefer the euro, as the new punt would be worth next to nothing.

The only way this could work would be for the government to actually ban the euro altogether.

You're not grasping the concept.
The punt will be 1 to 1 with the euro.And no, the government don't need to ban the euro,why would they?

Boskowski

There is no miracle diet pill. It's change your diet and exercise. Sorry wrong forum. Umm, maybe not?

Nijmegen

digme wrote: »

You're not grasping the concept.
The punt will be 1 to 1 with the euro.And no, the government don't need to ban the euro,why would they?

Umm, I really think you're missing it: It is as 'physically' impossible to run a sustainable economy in the fashion you describe as it is for me to do 20 pull ups with my tongue.

The problems are so myriad it's hard to know where to start. Firstly, mandating that the currency be accepted 1:1 with the euro is impossible. If it was possible, why didn't the GDR do it with, for example, the West Mark? Would have solved a lot of their problems!

You just can't do it. GDR is actually a good example: They used the WestMark as, essentially, their hard currency for buying the stuff they couldn't get themselves for all kinds of industry and leisure. They had to get the WestMark's, apart from aid, through extortion rackets, both overtly criminal and by, for example, forcing West Germans visiting the East - primarily relatives in East Berlin - to exchange their marks into east marks at a very tasty exchange rate for the E. German government (essentially, making them a profit on each transaction.) They also imported Soviet oil and gas at very favorable rates and exported it to the west, for example, at market prices.

When Germany reunified the OstMark was traded for WestMarks at a 1:1 ratio for the first 4,000 marks, 2:1 for the remainder, which cost West Germany billions and drove up the cost of living in East Germany as they became less competitive for their primary markets, central and eastern Europe.

To get the amount of hard currency required to keep afloat - in our case, Euro's, in theirs anything but crappy ost money - they would have had to increase their exports to western nations by 5-6 times versus what they were, despite already having a trade surplus with the West that is actually larger than our current trade surplus!

Money is valued against something. It has a real value. £1, $1 and €1 are not the same thing and there's a reason for that.

Sheesh, I'm trying to get my head around all the different ways our economy would collapse under this sort of a regime, it's amazing.

Re: GUIGuy, he wrote earlier in the thread:

I don't think it's a good idea but its not unheard of to have a two parallel currencies in one economy... A hard currency for externally traded goods and an internal currency for re-circulatory activities. This has gone on in eastern Europe, China, SE Asia, Latin America at various times.

The issue with this is that the majority of people (public servants, dole & the majority of shops/services) get paid in the local currency because by their nature they don't bring in new money from abroad they just recirculate existing money. Only those in the internationally traded sectors have access to hard currency.

That in itself creates a huge localised inflation problem... people need hard currency to buy certain things but it's in short supply.
Quite often hard currencies in such countries trade higher than they do on the international open market, because people are desperate for it and so short sell the openly traded value of the local currency.
This wipes out wealth of the majority and increasing both the relative and absolute wealth of those with access to foreign currency.

SouperComputer

digme wrote: »

You're not grasping the concept?

The concept isn't rooted in reality!

Oranage2

silverharp wrote: »

and where does the money come from? to employ somebody to do something you have to give them equipment, offices etc. on top of their salary.

Well it would come from the social welfare fund - welfare would be stopped and people would be paid to work.

silverharp wrote: »

The activities you mention would not give a financial return so essentially you want to borrow more money so that people work for the sake of working.
you might like my sig :pac:

Isnt this life - not everybody loves their job - i know i dont love mne - i'd say retail staff dont lover theirs but people have to work - that life

and the jobs i suggest as you quite rightly pointed out dont have profits but at least the streets would be clean, old people wont just be left to die.

Everybody should contribute to society and this way everybody does

al28283 wrote: »

How about spelling lessons?

Well done, if you're not smart enough to add to the debate probabily best not to contribute at all!

Nijmegen

Well it would come from the social welfare fund - welfare would be stopped and people would be paid to work.

Firstly, the social welfare fund is only covering 1/3 of welfare costs these days, so 2/3 of the money would (as welfare does) come from daily spending.

Secondly, if you pay a man to dig a hole you need to buy him a shovel.

leeroybrown

Oranage2 wrote: »

Well it would come from the social welfare fund - welfare would be stopped and people would be paid to work.

This fixes nothing. In fact it makes things worse. There's no extra money being generated by or injected to the economy so people won't spend any more than they already do. As no extra money is being generated the only logical source of this extra work is the replacement of current employment with these new state sponsored workers. Private enterprise would either fail due to not being able to compete or abuse the system by replacing ordinary workers with state sponsored ones. We already see the latter case with the WPP1 and WPP2 schemes being mis-used.

Suryavarman

Oranage2 wrote: »

Well it would come from the social welfare fund - welfare would be stopped and people would be paid to work.

But then it's just going to cost more to pay people the same amount.

Isnt this life - not everybody loves their job - i know i dont love mne - i'd say retail staff dont lover theirs but people have to work - that life

and the jobs i suggest as you quite rightly pointed out dont have profits but at least the streets would be clean, old people wont just be left to die.

Everybody should contribute to society and this way everybody does

I think what silverharp means is people will be given jobs just so the government can say unemployment is going down. The jobs that we would be giving people would be worthless as they wouldn't be producing anything.

We already have council workers to keep the streets clean though. If anything your plan will create the scenario were old people will be left to die after all the money for pensions being wasted on meaningless jobs.

Manach

Re old people dying, I'm fairly sure that historical family support structures had taken care of most of their own kin. With the growth of the interventionist state, familial bonds have loosen in Western Europe - 2003_European_heat_wave