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