As the federal government rolls out financial aid during the COVID-19 pandemic, perhaps a big question, should be: how do we ensure that the benefits of all this government spending ultimately go to local economies rather than financial and corporate elites? I suspect a lot of people don’t realize that the money to finance the recovery is actually being created out of thin air by the Bank of Canada (the BoC). The BoC uses this new money to stimulate the economy by purchasing government bonds, either directly from government or from financial corporations that already own government bonds. It’s called quantitative easing (QE), and it’s is something US, European and Japanese central banks have been doing for more than a decade.
Income of the top 1% – in 10 selected US states (1922-2013). Percentage (%) of pre-tax income earned by the top one percent of the population. DATASOURCE: World Wealth & Income Database. WIDGET: factgraphs.org
A more targeted effort that did not aim to be universal could do much more on that score. Ms Smith, along with 1,000 other residents of the Bronx, received a one-off $1,000 grant from Mr Yang’s outfit. This allowed her to buy food and to restore the internet, which her 14-year-old son needed for remote learning. This helped a great deal. But UBI advocates still have to explain why it would not be better to give families such as hers larger sums rather than a smaller payment that also goes to those who do not need it.
Pre-tax and post-tax income of the top 1% (USA). (1913-2014). Average income before and after taxes, of the top 1% of the population. DATASOURCE: World Wealth & Income Database. WIDGET: factgraphs.org