Inflation and Adjustments

[ClydeCoulter]

To start with I am not saying this is a good policy. I'm interested in what effects/affects this would have on an ecomony.

What would be the overall result of:

Any new money printed/created would be apportioned by increasing the number of dollars that each person had by the ratio of existing money to the newly created amount. (reguardless of how this could even be implemented).

example:

John has $300.00 cash + $100,000.00 in investments (home, stocks, etc). 2% more money is created, John's net worth is increased by 2%.

discuss.....................argue...............be at me up............

[CaptUSA]

That would kind of defeat the purpose of creating new money...

The whole purpose of creating new money is to give it to the well-connected first before it floods the market and inflates the price of everything. Simply increasing the dollars in everyone's pockets at the same time wouldn't do anything but change the price of everything at the same ratio. And what about debt? would you increase everyone's debt, too? I would imagine you'd have to, because if you didn't, the people who held the debt would lose out big time... Wouldn't want that, would we?

Fun game to play, though.

[ClydeCoulter]

That would kind of defeat the purpose of creating new money...

The whole purpose of creating new money is to give it to the well-connected first before it floods the market and inflates the price of everything. Simply increasing the dollars in everyone's pockets at the same time wouldn't do anything but change the price of everything at the same ratio. And what about debt? would you increase everyone's debt, too? I would imagine you'd have to, because if you didn't, the people who held the debt would lose out big time... Wouldn't want that, would we?

Fun game to play, though.

Exactly, it's purpose is to steal. And yes, I guess you would need to increase the debt also by the same amount (but debt that created new money would also need to be added that ratio of created money, and decreased as it's paid off? Wow, redistribution of created debt.....)
It just goes to show that it isn't about needing to pump more money into the system (because more resources or "value" is created).

[brandon]

It just goes to show that it isn't about needing to pump more money into the system (because more resources or "value" is created).

Well yes and no I guess. Generally the fed's policies are focused at creating credit by giving money to banks to lend. SO they do pump money in and it does go to the wealthy connected banks first. But then it also goes to the people that are using the newly created credit. No value is created of course, but the injection causes spending to increase temporarily - until people run out of new money and are just left with bigger debts.

[thoughtomator]

@OP - no functional difference between your proposal and a ban on money printing. The point of money printing is to allow the government to spend money above and beyond what the population is willing to peacefully bear as taxation.

[ClydeCoulter]

@OP - no functional difference between your proposal and a ban on money printing. The point of money printing is to allow the government to spend money above and beyond what the population is willing to peacefully bear as taxation.

Exactly