How to fix the Economic Crisis: A Modest Proposal.

Chuck Stone

Here's what we do.

We take every last cent in 'bailout' money and buy gold with it. Just gold.

Then on the following day we announce to the world that we are pulling out of europe and will be using gold as our currency.

We also anounce that we will be moving to 5% corporate tax rate.

The value of the euro would collapse and people would run to gold and it's price would triple overnight so we'd be increasing our wealth threefold.

Money and business would flood into the golden isle and we'd all live like kings.

Y'all got any ideas?

Hasmunch

Who wants lottery tickets!

Pompey Magnus

How many gold pieces for a pint though?

AhSureTisGrand

I think it's about time we actually gave the original Modest Proposal a shot. You know, the baby eating one

Chuck Stone

Pompey Magnus wrote: »

How many gold pieces for a pint though?

I suppose you wouldn't need to actually use the gold. You'd have money which would be backed by the gold.

Yakult

We should all just become pirates!!!

Lapin

Only cheapskates bother with gold these days.

Platinum is where its at.

Want some ?

jdooley28

I think all members of the EU have to have a Corporation tax rate of at least 10%. You my think lets do it anyway but remember who is giving us this bailout money. I think give the bailout money to John Paulsen and let him try double it for a nice bit of commision!

Queen-Mise

AhSureTisGrand wrote: »

I think it's about time we actually gave the original Modest Proposal a shot. You know, the baby eating one

I know 'A Modest Proposal' is a satire, but it is still disturbing reading:

I have been assured by a very knowing American of my acquaintance
in London, that a young healthy child well nursed, is, at a year
old, a most delicious nourishing and wholesome food, whether
stewed, roasted, baked, or boiled; and I make no doubt that it
will equally serve in a fricasie, or a ragoust.

I do therefore humbly offer it to publick consideration, that of
the hundred and twenty thousand children, already computed,
twenty thousand may be reserved for breed, whereof only one
fourth part to be males; which is more than we allow to sheep,
black cattle, or swine, and my reason is, that these children are
seldom the fruits of marriage, a circumstance not much regarded
by our savages, therefore, one male will be sufficient to serve
four females. That the remaining hundred thousand may, at a year
old, be offered in sale to the persons of quality and fortune,
through the kingdom, always advising the mother to let them suck
plentifully in the last month, so as to render them plump, and
fat for a good table. A child will make two dishes at an
entertainment for friends, and when the family dines alone, the
fore or hind quarter will make a reasonable dish, and seasoned
with a little pepper or salt, will be very good boiled on the
fourth day, especially in winter.

I have reckoned upon a medium, that a child just born will weigh
12 pounds, and in a solar year, if tolerably nursed, encreaseth
to 28 pounds.

http://www.fullbooks.com/A-Modest-Proposal.html

The only problem with the OP's suggestion is how expensive gold has become, at the moment an ounce is €1120. We would be buying pints with slivers of gold... Interesting idea though

amacachi

Queen-Mise wrote: »

We would be buying pints with slivers of gold...

No we wouldn't. See people would take gold as deposits and those who made those deposits would have a receipt for the amount of gold they deposited. Eventually those pieces of paper would be worth the amount of gold they represented and people would use them to buy things instead of going to the "bank" every time. People would accept these slips of paper as payment in lieu of gold. Eventually those who held the gold would realise that no matter how much gold was withdrawn it was only a small fraction of the deposits they held and would give out slips to other people that represented gold, even though they'd never be redeemed. Then the government would get involved and print loads of these slips, let's call it "money", and everyone would have loads. Then the government would realise that it was hundreds of years since anyone bothered to actually redeem their notes for gold and break that initial link between gold and this "money" idea. Then they'd print loads of "money" since it had no value and everyone would have loads of money and would buy and sell houses and the money would just keep flowing and everything would be fine forever.

Or not, whatever.

Jess16

Chuck Stone wrote: »

The value of the euro would collapse and people would run to gold and it's price would triple overnight so we'd be increasing our wealth threefold?

Triple huh? Seeing as we're pulling arbitrary figures out of our ass here, why not make it ten times increased value? Heck, make it twenty!

Chuck Stone wrote: »

Money and business would flood into the golden isle and we'd all live like kings

Money from where exactly? From our European counterparts that we brought to economic collapse with our sudden withdrawal from the common currency? Or are you assuming that our newly radical fiscal policies would make us suddenly attractive to foreign investors when we've basically annihilated our European trade partners?

Chuck Stone wrote: »

Y'all got any ideas?

Yeah, leave using crystal ball bullsh*t speculation to the tabloids

myflipflops

Considering Free Cheese did not work, I give gold no chance.

Chuck Stone

Jess16 wrote: »

Yeah, leave using crystal ball bullsh*t speculation to the tabloids

Holy shit relax there will ya!

I was just having a bit of fun.

You've hurt my feelings :'''(

Jess16

Chuck Stone wrote: »

You've hurt my feelings :'''(

You've hurt my brain! Monday morning is no place for fun so suck it up and get your game face on.
Also, don't ask questions if you aren't prepared to hear the answer. Have a nice day

Chuck Stone

Jess16 wrote: »

You've hurt my brain! Monday morning is no place for fun so suck it up and get your game face on

Yes Ma'am.

http://i162.photobucket.com/albums/t278/Joebeasto/Salute.jpg

We got a sassy one on our hands here bejaysus.

http://www.istockphoto.com/file_thumbview_approve/15657017/2/istockphoto_15657017-attitude-girl-with-red-boxing-gloves.jpg

mackg

Jess16 wrote: »

You've hurt my brain! Monday morning is no place for fun so suck it up and get your game face on.
Also, don't ask questions if you aren't prepared to hear the answer. Have a nice day

Like the old men in The Fast Show who burst the childrens football.

B_Fanatic

Jess16 wrote: »

Yeah, leave using crystal ball bullsh*t speculation to the tabloids

He's obviously joking.

Jess16

Chuck Stone wrote: »

Yes Ma'am. We got a sassy one on our hands here bejaysus.

mackg wrote: »

Like the old men in The Fast Show who burst the childrens football.

I'm keepin' it real.jpg

Big Nasty

Dear Mr. Kenny
>
> Please find below my suggestion for fixing the Irish economy.
>
> Instead of giving billions of pounds to banks that will squander the
> money on lavish parties and unearned bonuses, use the following plan.
>
> You can call it the Patriotic Retirement Plan:
>
> There are about 400 thousand people over 50 in the work force.
>
> Pay them €1 million each severance for early retirement with the
> following stipulations:
>
> 1) They MUST retire.
> 400 thousand job openings - unemployment fixed
>
> 2) They MUST buy a new car.
> 400 thousand cars ordered - Car Industry fixed
>
> 3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed
>
> 4) They MUST send their kids to school/college/university - Crime rate fixed
>
> 5) They MUST buy €100 WORTH of alcohol/tobacco a week .....
> And there's your money back in duty/tax etc
>
> It can't get any easier than that!
>
> P.S. If more money is needed, have all members of the Dail pay back
> their falsely claimed expenses and second home allowances
>

Michael 09

jdooley28 wrote: »

I think all members of the EU have to have a Corporation tax rate of at least 10%. You my think lets do it anyway but remember who is giving us this bailout money.

Don't think so, each individual government is responsible for setting domestic 'direct' tax rates such as Corp tax. Also, we'd be leaving the EU so who cares.

I like this idea

bnt

In addition to what amacachi said about Gold as a basis for currency: it would be a case of "too little, too late". The price is already in a bubble, and all Ireland's reserves wouldn't make much of a dent in it.

One additional danger with price manipulation is that it makes the assumption of a "perfect market". in which a seller can always find a buyer. Imagine the following scenario:

• Gold is at $1,500 per oz.
• A large "sell" order hits the market;
• Potential buyer sees this and thinks "where is the price going?", and decides to wait. Why buy now when the price is on the way down?

Multiply this by thousands, with lots of buyers waiting for the "bottom of the market". Even if only some sellers have to sell, that's all it takes for a crash to happen.

Fremen

Chuck Stone wrote: »

Y'all got any ideas?

How about this: our country offers to tarmac other countries' drives. If they hire us, we do a shít job and leg it with the money.

Cathal O

Ok so in order for everyone to move on from this bailout move, i have a simple explaation as to what to do, but on a much smaller scale, but if you follow this, surely its the same just on a much larger scale? no

Anyway
1) A german visitor to ireland goes into a hotel and asks to see a hotel room, the owner says no bother, its a 50 euro deposit to view which you will get back if not satisfied, so the german friend agrees and pays and goes up tp look at the room.

2) The hotel owner , who is behind on his debts to a butcher for his meat tab for breakfasts goes with said 50 euro and pays off the butcher and clears his debt.

3)The butcher then goes into the supermarket and pays off his debt that he wracked up for vegtables that he sold with his meats. The 50 euro debt is now cleared and he can get on with his business.

4) The shopkeeper owner uses said 50 euro and goes to his builder and pays him off the last 50 euro installment for the work that he owed him for.Clearing his debt

5)The builder, who stayed in the hotel in number 1, owed them 50 euro for staying over a time ago. So he paid the hotel owner 50 euro and cleared his debt.

6) The german visitor in point 1, comes back down the stairs after examining the room and decides he doesnt like it and asks for the 50 euro deposit back, the hotel owner duly gives him his 50 euro and he is off on his way


This shows that with one 50 euro how a hotelier, a butcher, a shopkeeper and a builder can have all their debts cleared in a local economy, i dont know what im trying to say here, but surely something like this could work over the country?

chucken1

Jess16 wrote: »

You've hurt my brain! Monday morning is no place for fun so suck it up and get your game face on.
Also, don't ask questions if you aren't prepared to hear the answer. Have a nice day

Ya!! Everyone knows Tuesday morning is where the fun is :mad:

Liam Byrne

Cathal O wrote: »

Ok so in order for everyone to move on from this bailout move, i have a simple explaation as to what to do, but on a much smaller scale, but if you follow this, surely its the same just on a much larger scale? no

Anyway
1) A german visitor to ireland goes into a hotel and asks to see a hotel room, the owner says no bother, its a 50 euro deposit to view which you will get back if not satisfied, so the german friend agrees and pays and goes up tp look at the room.

2) The hotel owner , who is behind on his debts to a butcher for his meat tab for breakfasts goes with said 50 euro and pays off the butcher and clears his debt.

3)The butcher then goes into the supermarket and pays off his debt that he wracked up for vegtables that he sold with his meats. The 50 euro debt is now cleared and he can get on with his business.

4) The shopkeeper owner uses said 50 euro and goes to his builder and pays him off the last 50 euro installment for the work that he owed him for.Clearing his debt

5)The builder, who stayed in the hotel in number 1, owed them 50 euro for staying over a time ago. So he paid the hotel owner 50 euro and cleared his debt.

6) The german visitor in point 1, comes back down the stairs after examining the room and decides he doesnt like it and asks for the 50 euro deposit back, the hotel owner duly gives him his 50 euro and he is off on his way


This shows that with one 50 euro how a hotelier, a butcher, a shopkeeper and a builder can have all their debts cleared in a local economy, i dont know what im trying to say here, but surely something like this could work over the country?

Sounds great.

That's the same hotelier who couldn't pay the butcher originally because he didn't have €50 ?

What did he pay the German back with ?

Aside from that, it does "fix" the knock-on issues completely, making the problem smaller and just between 2 people instead of 4 or 5, but the hotelier is back in debt since they don't have the €50.

Of course, if FF hadn't signed us all up for the multiple €50s that the idiotic gambers were spending, we wouldn't have the reverse of the above where the government are robbing the €50 from everyone, increasing everyone's knock-on debts instead of decreasing them.

ScumLord

Would I be wrong in assuming that if economies collapse golds value will go down with it? It's a completely useless metal to most outside of advanced electrical engineers and if a big global economy isn't there to give it value it's not going to be worth much to a hungry person.


How about better education? Knowledge is the gift that keeps on giving.

Fremen

ScumLord wrote: »

How about better education? Knowledge is the gift that keeps on giving.

How about a free hovercraft for every man, woman and child in the country? That'd be way better than education. Hovercrafts are the gift that keeps on giving.

Cathal O

Liam Byrne wrote: »

Sounds great.

That's the same hotelier who couldn't pay the butcher originally because he didn't have €50 ?

What did he pay the German back with ?

but the hotelier is back in debt since they don't have the €50..

Yes its the same one, but now the hotellier isnt in debt by 50 euro as he paid back his debt of the imaginary 50 euro.
I know its complicated and i probably wrote it down wrong, but in my head it works haha

Fremen

Cathal O wrote: »

Yes its the same one, but now the hotellier isnt in debt by 50 euro as he paid back his debt of the imaginary 50 euro.
I know its complicated and i probably wrote it down wrong, but in my head it works haha

It's really just a case of

A owes B

B owes C

C owes A.

You can combine the first two debts:

A owes B, B owes C -> A owes C

Now you've got

A owes C
C owes A,

so no-one owes anyone anything. They don't even need the German. They can just meet up and sort their debts out intelligently.

Removing the banks right to loan currency into existance for a start.
At the moment they print it and lend it to governments, every single Euro in existance was lent somewhere and the banks get interest just for it being in existance, a huge parasitic load on the economy.
Let governments issue currency, by spending into the economy and banks will have to borrow off the people before lending on.

It would be impossible for such huge debts to grow if the government limits the printing of money.

Forget growth! It's decline that's scary!

Capt'n Midnight

Chuck Stone wrote: »

Here's what we do.

We take every last cent in 'bailout' money and buy gold with it. Just gold.

James Bond: Yes, well, I've worked out a few statistics of my own. 15 billion dollars in gold bullion weighs 10,500 tons. Sixty men would take twelve days to load it onto 200 trucks. Now, at the most, you're going to have two hours before the Army, Navy, Air Force, and Marines move in and make you put it back.
Auric Goldfinger: Who mentioned anything about removing it?
[Bond is stunned into silence]
Auric Goldfinger: The julep tart enough for you?
James Bond: You plan to break into the world's largest bank, but not to steal anything. Why?
Auric Goldfinger: Go on, Mr. Bond.
James Bond: [thinking] Mr. Ling, the Red Chinese at the factory, he's a specialist in nuclear fission... but of course! His government's given you a bomb.
Auric Goldfinger: I prefer to call it an "atomic device." It's small, but particularly dirty.
James Bond: Cobalt and iodine?
Auric Goldfinger: Precisely.
James Bond: Well, if you explode it in Fort Knox, the... the entire gold supply of the United States would be radioactive for... fifty-seven years.
Auric Goldfinger: Fifty-eight, to be exact.
James Bond: I apologize, Goldfinger. It's an inspired deal! They get what they want, economic chaos in the West. And the value of your gold increases many times.
Auric Goldfinger: I conservatively estimate, ten times.
James Bond: Brilliant.

Liam Byrne

Cathal O wrote: »

Liam Byrne wrote: »

Sounds great.

That's the same hotelier who couldn't pay the butcher originally because he didn't have €50 ?

What did he pay the German back with ?

but the hotelier is back in debt since they don't have the €50..

Yes its the same one, but now the hotellier isnt in debt by 50 euro as he paid back his debt of the imaginary 50 euro.
I know its complicated and i probably wrote it down wrong, but in my head it works haha

No. If the hotelier didn't have €50 to give the butcher, he won't have it to give the German. So he is in debt by €50.

It did solve the other debts, I'll give you that.

But it only works because the German isn't a local that owes someone else local and now can't pay because the hotelier can't refund him.

Tonyandthewhale

Liam Byrne wrote: »

No. If the hotelier didn't have €50 to give the butcher, he won't have it to give the German. So he is in debt by €50.

It did solve the other debts, I'll give you that.

But it only works because the German isn't a local that owes someone else local and now can't pay because the hotelier can't refund him.

But the hotelier can refund him, because someone already paid the hotelier 50 he was owed so he's got that 50 floating around to give to the German. The problem with this scenario is that there's no room for growth in this hypoteical local market since there's no capital available. An even bigger problem is that it isn't at all applicable to the Irish situation since no one (or at least no one solvent) owes us the 100 or so billion euro that we owe in soverign debt so what's the point in discussing the German and the hotelier?

Liam Byrne

Tonyandthewhale wrote: »

But the hotelier can refund him, because someone already paid the hotelier 50 he was owed so he's got that 50 floating around to give to the German.

Whoops! Missed that completely!

Tonyandthewhale wrote: »

The problem with this scenario is that there's no room for growth in this hypoteical local market since there's no capital available.

Define "growth", though.......it's always stunned me the way that inflation is somehow seen as a good thing. All it does is ensure that the same money doesn't go as far.

e.g.

1981 Ford Fiesta : £4,500 or approx €5,500 (now €14,000)
1981 Bag of Tayto : 10p or 12c (now 75c)

Car inflation : 300%
Tayto inflation : 600%

So basically any wage increases are, in real terms, non-existent.

Ally Dick

Good idea OP. But the Indians are buying up all the gold in vast quantities as we speak. They can see that a huge crash is coming for China, as well as the US, and they want to have all the gold, when currencies go tumbling....

Chuck Stone

Define "growth", though.......it's always stunned me the way that inflation is somehow seen as a good thing. All it does is ensure that the same money doesn't go as far.

e.g.

1981 Ford Fiesta : £4,500 or approx €5,500 (now €14,000)
1981 Bag of Tayto : 10p or 12c (now 75c)

Car inflation : 300%
Tayto inflation : 600%

So basically any wage increases are, in real terms, non-existent.

That's interesting^^.

I thought it was primarily money supply which causes inflation but it seems that this is an 'Austrian view'.


http://en.wikipedia.org/wiki/Inflation

Liam Byrne

Liam Byrne wrote: »

Whoops! Missed that completely!



Define "growth", though.......it's always stunned me the way that inflation is somehow seen as a good thing. All it does is ensure that the same money doesn't go as far.

e.g.

1981 Ford Fiesta : £4,500 or approx €5,500 (now €14,000)
1981 Bag of Tayto : 10p or 12c (now 75c)

Car inflation : 300%
Tayto inflation : 600%

So basically any wage increases are, in real terms, non-existent.

A debt based monetory system can't exist without growth, otherwise the debt created when the money was loaned into existance will never be repaid with interest.

No growth, no money available to repay debt = interest on debt spirals out of control. Sound familier....

Chuck Stone

Deleted User wrote: »

A debt based monetory system can't exist without growth, otherwise the debt created when the money was loaned into existance will never be repaid with interest.

No growth, no money available to repay debt = interest on debt spirals out of control. Sound familier....

Sounds like a ponzi scheme

Chuck Stone

Chuck Stone wrote: »

Sounds like a ponzi scheme

It is! As big as the planet, but it can't get any bigger!

aligator_am

Chuck Stone wrote: »

Here's what we do.

We take every last cent in 'bailout' money and buy gold with it. Just gold.

Then on the following day we announce to the world that we are pulling out of europe and will be using gold as our currency.

We also anounce that we will be moving to 5% corporate tax rate.

The value of the euro would collapse and people would run to gold and it's price would triple overnight so we'd be increasing our wealth threefold.

Money and business would flood into the golden isle and we'd all live like kings.

Y'all got any ideas?

Your plan has merit, but gold now is about $1600 per ounce and likely to keep increasing as the dollar keeps deflating, it was about $250 per ounce in 2001 and has been going up ever since.

There's a chance that America could experience hyper inflation, if that happens then gold and surprisingly seeds could be major barter items.

Chuck Stone

aligator_am wrote: »

There's a chance that America could experience hyper inflation, if that happens then gold and surprisingly seeds could be major barter items.

Actual stuff with real world value. Unlike those little bits of paper we place so much trust in.

Michael 09

aligator_am wrote: »

Your plan has merit, but gold now is about $1600 per ounce and likely to keep increasing as the dollar keeps deflating, it was about $250 per ounce in 2001 and has been going up ever since.

What makes you think it's gonna stop any time soon. Buying a stock/commodity on the floor is almost impossible to predict. Buying on the way up is the most profitable way.

Old Chinese saying 'never try to catch falling swords'

bnt

Cathal O wrote: »

This shows that with one 50 euro how a hotelier, a butcher, a shopkeeper and a builder can have all their debts cleared in a local economy, i dont know what im trying to say here, but surely something like this could work over the country?

That's already happening, but backwards: see "kicking the can down the road". The "parable" describes a "liquidity crisis": the value is already in existence, it's just not where it needs to be - so shuffling it around solves the problem.

But that's only one kind of economic crisis: the other main kind is a "solvency crisis", where debts are more than the value of assets. An example is someone who takes out a huge mortgage on a house: the house has a value as an asset, more than the value of the mortgage debt: so you're still solvent. However, as we now know, houses in Ireland were severely overvalued, and so the new valuation on the same house can suddenly be a lot less than it used to be. The mortgage debt is bigger than the new value, and once you factor in all your other assets and debts, you can still be "in the red" i.e. insolvent or bankrupt.

So far, so obvious, but the same situation can apply to other kinds of assets ... and it can apply to a whole country. Is Ireland in this situation? Yes, and shuffling money around internally is not going to change that. The underlying value is not there any more - if it ever was.

If you want to get technical: there's already a way of measuring the total value produced by a country, versus what it owes, and it's called the current account. (Not to be confused with your "current account" at the bank.) A country with a current account deficit is producing less value than it loses in any period, and as that build up over time it becomes a current account debt. Moving money around as Cathal describes doesn't change the current account, because there is a loss for every gain i.e. it all balances out internally.

What is Ireland's current account like? According to these guys, Ireland's current account deficit for the first quarter of 2011 was just over €1 billion. (There's a more detailed explanation of the current account at the bottom of that page.) The really scary chart is this one: the ratio of Ireland's total debt versus Gross Domestic Product, which is approaching 100%. If it's any consolation: the USA is in a similar situation, except that the numbers involved are much larger.

Suryavarman

Chuck Stone wrote: »

That's interesting^^.

I thought it was primarily money supply which causes inflation but it seems that this is an 'Austrian view'.


http://en.wikipedia.org/wiki/Inflation

I believe the Monetarists believe that inflation is caused by increases in the money supply.

Milton Friedman: "Inflation is always and everywhere a monetary phenomenon."

The Austrian view is that the increase in the money supply is the inflation and a rise in prices is just a result of inflation.