What would happen if every American over the age of 18 suddenly got $10,000 injected into their online bank accounts?

There's a lot here so I won't hit everything. First, to make this relevant to socialism, I'll just say all these conversations show the need to end the capitalist economic cycle once and for all and replace it with a completely different socialist system. Yet these are still interesting and relevant questions for socialists.

Also I'm not in economics, so sorry if my answers are wrong. Please offer corrections in the thread somewhere.

What would be the consequences of this?

It depends, and it's hard to say for sure.

The first direct consequence would be a great stimulus the economy, in the Keynesian sense of priming the pump by increasing aggregate demand. There will be other consequences.

Would the value of the dollar decrease?

Yeah probably. But look the government is already pumping money into the economy via quantitative easing, claiming it is to stimulate the economy. So say for example the government would stop doing that and instead give the money to all of the people instead, in theory the net devaluation would be the same. So we wouldn't be any worse off, or more devalued than we already are becoming by funneling cash from the treasury to wall st.

I'll pass on question 3 but hopefully someone else will help out.

Would the U.S. economy be booming after this?

Probably yeah that would be a huge ultimate demand stimulus. Also I guess it depends how you're measuring "booming". It would be a huge increase in well being for sure. Traditional measures like GDP and employment would increase.

  1. how long might this last if this was a one time thing?

A few years maybe. The system has constant cycles of boom and bust, so it's only a matter of time until the next crash.

Could this negatively affect banks somehow (aside from the currency being devalued)? Might this cause a bank run that could put some banks out of business?

It could negatively effect the banks if the government stops funneling money to the banks and decides to give it to us instead. And then if we all take of that money and pay of our credit cards and bank loans, then the banks will lose money in interest and fees. I don't think it would cause a run on the banks.

I see both ideas as being incredibly short-sighted and doomed to result in a devaluation of the currency, high levels of inflation and other issues

I actually agree with you that the policy is shortsighted and risks devaluation. But I will add the caveat is that the gov. is already funneling money to the banks, ongoing, so as long as they are already doing it, they should give it to everyone.

They are supposed to use these monetary authorities as temporary tools to jumpstart the capitalist economy, not as a permanent way of life to funnel money to their banker buddies and wreck the currency.

However I do think a UBI could work (and that it would totally reinvigorate the economy) if it was paid for via a high consumption tax thus completing the positive feedback loop that would keep the money flowing as it is meant to.

Consumption taxes are sales taxes right? That sounds regressive. I would say a tax on wealth. Like a percentage of all personal wealth over a certain amount. On a graduated scale I guess. Like the income tax we have now, but on net wealth.

/r/socialism Thread