What would happen in the economy if

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  • #26
phinds
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I have thought this through and think governments worldwide would move very quickly to seize as much of the cash as possible.

This would devalue the funds but not as much as keeping the funds in circulation might.

Now, with various governments holding the cash - the poorer countries would be able to invest in infrastructure and provide food, shelter and other basics in some places. Wealthy countries could retire all debts and invest as necessary.
Well, they might try but that would just add to the chaos. Do you think folks are going to readily surrender the money? How about in countries where the government holds little sway.

I don't think you have really thought this through as a real-world problem. Your conceived solution is admirable but simplistic.
 
  • #27
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Well, they might try but that would just add to the chaos. Do you think folks are going to readily surrender the money? How about in countries where the government holds little sway.

I don't think you have really thought this through as a real-world problem. Your conceived solution is admirable but simplistic.
Not so simple really. What is the old saying about "out of chaos"?

If the existing governments didn't move to tax the funds and allowed the global system to collapse - a single global authority may arise. It would be both a windfall and survival for the existing governments.
 
  • #28
fluidistic
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The op doesn't indicate a gift. The funds just appear - could be a banking error(?) - taxable income in the US.

"What would happen in the economy if everyone in the world wake up and see 1 billion dollars in their house or stuff in where they live."
It wasn't a real situation. It can't be a banking error since there are not so many banknotes in the world. So it can't be a gift either. Say they just appeared out of... nowhere.
 
  • #29
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It wasn't a real situation. It can't be a banking error since there are not so many banknotes in the world. So it can't be a gift either. Say they just appeared out of... nowhere.
Again - the existing governments of the world would have a windfall of about $900Million per person - IMO.
 
  • #30
phinds
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...If the existing governments didn't move to tax the funds and allowed the global system to collapse - a single global authority may arise. It would be both a windfall and survival for the existing governments.
Now you're REALLY off into never-never land.

I find all your optimism admirable, but totally unrealistic. You and I are just talking past each other, partially I think because we see the world quite differently, and it's clearly pointless to continue since we're not going to convince each other.

Cheers ...
 
  • #31
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Now you're REALLY off into never-never land.

I find all your optimism admirable, but totally unrealistic. You and I are just talking past each other, partially I think because we see the world quite differently, and it's clearly pointless to continue since we're not going to convince each other.

Cheers ...
Given the far-fetched topic of the thread - it seemed all possibilities should be considered.
 
  • #32
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why speculate - look at history. Hyperinflations in Germany, Brazil, Zimbabwe etc give you an idea what would happen
 
  • #33
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why speculate - look at history. Hyperinflations in Germany, Brazil, Zimbabwe etc give you an idea what would happen
Of course - but that wasn't caused by giving everyone in the world $1Billion each.
 
  • #34
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I do have to wonder how fast some of the people would lose their $1Billion gambling?
 
  • #35
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because Income and gift taxes are rediculous and greedy. And other countries my have some sense of the poor and middle class. Where America doesn't care.
Can you clarify your meaning a bit?
 
  • #36
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I think most of you gave the correct answer. If everyone income is shifted up by some constant then economic theory says that prices must change as demand will change. In economics, prices are the outcome of the Walrasian Equilibrium (demand must equal supply), and thus the prices will adjust to guarantee this result. This is the statics of the problem.

The question becomes with regard to the dynamics of the problem how will the markets adjust to reach this stable equilibrium point. However, that requires knowledge of the organization of the market, and such. It might take several years to achieve the new equilibrium point, but there's no guarantee of stability as the problem stated do not give any details.
 

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