Economist Says Australian Government Should Give Everyone $100,000 To Save The Economy
The Australian government has been working hard to provide financial stimulus packages for citizens and businesses to prevent the economy from tanking during the coronavirus pandemic.
People who have lost their jobs are getting a fortnight subsidy while small businesses are getting cuts on equipment and allowances to keep them running.
All these measures will cost the federal government tens of billions of dollars, however it will be necessary to ensure we come out the other side of Covid-19 in a good place. But one economist has proposed a pretty radical idea to ensure a recession is avoided.
Professor Steve Keen of the University College of London has told Daily Mail Australia that a huge sum of money should be given to everyone to keep the economy ticking along.
"Give $100,000 per person as a flat rate to everyone to eliminate the private debt," he said.
Those without private debt would also be given the $100K in Professor Keen's proposal to make everything fair, but the main aim would be to help those with burgeoning credit card debt as well as mortgages.
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The hard thing would be ensuring that the money given to people would go directly into wiping away debt, rather than spending it on a holiday or material objects.
But if it could be achieved effectively, Professor Keen says it would reduce the collective amount of private debt, which is currently at 190 percent of Australia's GDP.
"We let ourselves get into the biggest debt bubble in human history," he said.
If the adult Australian population were to receive that massive chunk of change, then the country's private debt could be reduced to 90 percent of GDP. If that number doesn't fall then we could be in a very bad position financially as we emerge from the coronavirus pandemic.
Thankfully the federal government has helped people with large private debt, like mortgages, by deferring them for six months. In total, around $200 billion worth of mortgages have been deferred.
That will allow many who are struggling through the pandemic to worry less about their repayments and concentrate on putting food on the table and having a roof over their heads.
It's doubtful that Professor Keen's proposal will be picked up by the federal government, but it sure does sound like a nice idea to have $100,000 pop into your bank account.
Featured Image Credit: Martin Kingsley (Creative Commons)