Wednesday, May 30, 2012
Transfers effect or wealth effect ?
Let's pretend here for a moment the fed can raise the nominal value of stocks and bonds
Held by the public
By buying up lots of long term public debt and remove risk excess from the public
By buying the toxic cesspools etc and this would increase household aggregate spending and corporate spending
Contrast this with a bunch of tax vas rebates social earned dividends
and retirement make ups and health premium payments
Surely the class profile of the two vis a vis wise would be conflictual eh?
The two rival policy paths pushed. By two rival cui bono gangs
......................toon rendering ..........let's have a pay roll tax cut because I'm a wage earner
No let's have a stock and bond boom cause i have stocks
Lest toss a coin
No look if we increase my bonds and stock value I'll spend more and that will raise your wages
Ya but if you pay me more I'll spend more and that will raise your stock prices and create loan demand
That will raise your bond prices
Let's toss a coin
No let's vote
There are more of us then there are of you