Tuesday, July 10, 2012
Is Lord Desai Off His Rocker?
Two unorthodox policy moves to revive the economy are worth considering. First, in order to make consumers spend rather than save we could adopt Silvio Gesell’s idea of stamped money. This money loses purchasing power if not spent immediately. The easiest way to put money in consumers’ pockets would be to give them a shopping voucher valid for one month after issue.
Second, a recovery loan that will mop up money in banks, firms and households for which there is no present use – and use it for infrastructure projects: the high-speed rail link, road building and repairs, and house construction by local authorities; or projects to do with carbon emissions - insulating houses, and solar panels. A company could be set up to raise money for these projects that would not add to the deficit.
If Lord Desai is not totally off his rocker, and has retained his ability to read and comprehend economic theory, I would suggest that he read Ludwig von Mises’ Human Action.