jimjam wrote::eek: I think D.Trump is looking for another "Press Secretary". You have to be able to talk all day and say nothing other than D.Trump is the greatest human being ever and that trillions in newly printed $ given to billionaires will definitely "trickle down" to po folk …….
I will repeat my comment from above because, IMO, it captures things very well: A modest proposal, we give the poor and middle classes the whole two trillion dollar rescue fund and see if it trickles up.
I know you are trying to be funny, but you are actually right. Money does percolate up through the economy. Keynesian economics is based on demand side intervention. It did seem to have some benefit in the last Great Depression.
The approach taken in 2008 and now is to bail out the financial sector in order to stave off bank collapses. But at best it buys time. It comes at great cost due to debt but also unresolved moral hazard at the top end of town. Effectively it is transferring wealth from the tax payer to the financial elite without the later having to learn from their mistakes. No money will trickle down as they will immediately lock it up in esoteric investment instruments that don’t have any relation to production.
A better policy would be to simply nationalise the banks while spending on demand side, in social support and big infrastructure projects for example. Now, there are those among us who quail at the mention of the N word. I cite the example of Conrail to show nationalisation is a viable policy in desperate circumstances. You, @jimjam , might be old enough to remember the collapse of the NE Rail network at the end of the 1960s. Conrail was an effective and successful policy response. In time, after 3 decades, it was broken up and privatised again.
When facing dire conditions, nationalisation can solve problems of systemic collapse. It seems to me that the right policy now is for the American financial sector to be largely nationalised rather than giving tax payers money to the rich. This would still cost a lot of money to shore up the system, but the public would own it. Which they should, given it is their money.
In a few decades time it could be privatised again, with the proceeds of sale going to retire public debt raised to save the system.