The one thing that the warring experts agree on is that the proposed stimulus is extraordinary. One side shouts: “It’s outrageous! It’s unprecedented! In terms of economic and political theory, it’s odious!” The other replies that yes, you’re right about all of that, but if we do nothing the alternative will probably be worse. We’ve already tried all of the less objectionable things that we normally do, but now we’re out of alternatives and so the only options we have left are nationalizing banks or giving handouts to financiers or, god forbid, cleaning up the National Mall so that our great American commons isn’t a disgusting barren mudpit.
So yes, it’s a bad situation, but a lack of ideas seems to be at least part of the problem. And then last night it struck me: a bold, novel solution, which I offer here in the humble spirit of citizenship.
We need more money flowing around, right? But we can’t just print more money because of the inflationary risk, right? It has to be short term — new money that disappears after a while. The answer is simple: chocolate gelt. Edible currency. Fiat finger food! It’ll circulate for a while, then gradually disappear as people consume it. For those of you who still believe in economics, I think the technical rationale is that the currency will be consumed once its marginal deliciousness (or whatever) exceeds its face value. Personally, I think it’ll probably just be consumed by the drunk, hungry or drunk & hungry. Either way, there’s a built-in safety check against long-term inflationary effects.
There are of course some practical concerns. The foil would have to be significantly upgraded to make regular handling of the currency viable — perhaps some sort of carefully engineered tin design would be necessary. Also, it may be that chocolate is too cheap (or melting-prone) a commodity to turn into a useful form of currency. Or perhaps forgers would refill empties with Hershey’s chocolate — presumably inferior to delicious federal chocolate. But there are solutions to these problems. Maybe we could use ampules of liquor. Or, simpler still, the government could storm Hidden Valley, seize its ranch-producing operations and make the Treasury Department the only source of our precious national condiment.
Whatever the specifics, I think this is an initiative that would be welcomed by the public. Certainly I’d be a lot happier about it than I was when I received five one-dollar coins’ worth of change from the Chinatown bus people last night.
Have you lost your mind??!! The velocity of money would increase a thousand fold (nobody makes a non melting chocolate that is worth anything) and so people would rapidly spend it. It may be old fashioned, but MV=PT would hold in this situation. Increase M and T, (output) is not immediately increasing), so V and P (the price level) is going to increase. The relative amounts may be determined by dissimilar factors, but both increasing is really a no brainer.
I would want to eat a counterfeit one. Subprime chocolate gelt would not be on my menu.
I wouldn’t want to eat a counterfeit one. Subprime chocolate gelt would not be on my menu.
Perhaps you have heard Gresham’s Law? “Bad money drives good money out of circulation.” i.e., given a silver dollar and an aluminum dollar, the silver dollars will be hoarded, and the aluminum dollars will become the only ones in circulation.
Besides, the best thing to stop a deflationary spiral is inflation, isn’t it?