Written by Global Citizen
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Thursday, 14 February 2008

image for 1000 times reward to US consumer offered for overspending
Bernanke prepares to shower dollars from helicopter

The Federal Reserves and its Chairman, Ben Bernanke along with the US government is trying everything possible to get rid of a recession in the largest economy of the world. Interest rates were cut aggressively; Congress and the President sanctioned the stimulus package. Many feel that the economy may already be in a recession, others doubt on the probability of it.

Not that markets globally didn't react to all those stimulus packages and interest rate cuts, but the call was still mixed.
Come January retail sales figure, and apparently 'consumer purchases in the US rose 0.3 percent in January, after declining 0.4 percent in December, the Commerce Department said Wednesday.' If one calculates with ball park figures or even with the exact data, the difference may be single-digit billions of dollars.

And global financial markets responded by going up - minimum 2% whereas many in Asia were up by 4-5%. It added the net wealth of the paper money by trillions of dollars.
So a cause of an average US consumer spending one dollar extra results in minimum $1000 increase in global m-cap, well may be for hours or days, but it happens.

One may argue that Japan's unexpected growth rate also worked, however readers of mainstream financial media fail to understand that on what basis the same global financial media accepts and writes Japan's nearly 4% growth rate after proclaiming recession/stagnation there for months in article after article.

All these made the policy-makers in the US and Japan decide that henceforth, any consumer in the US who will have a track record of spending 1% more month-on-month would get a 1000 times reward on his/her increased monthly spends. Federal Reserves and Congress have found that the cost of this package may be less than $170 billion, and can potentially last for years. The consumer need not worry about any delinquencies in future credit card payments; as the money will be circulated from financial markets to banks to consumers for doing a favor by consuming with credit money.

This single act would help the economy grow, stabilize financial markets and housing market, and thereby help the US consumer to feel rich again due to his/her exposures to these asset classes. And subsequently the stimulus package can be withdrawn again when the consumer starts reusing his/her home as an ATM, or takes mortgage which s/he can't pay back.

Many Nobel laureates in Economics applauded this great idea of the US economic policy-makers, and proclaimed that it's a sure shot remedy to permanent growth. Words like 'saving money' are being shifted to the same league as Nazi atrocities; and being declared unparliamentarily in the US congress.

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The story above is a satire or parody. It is entirely fictitious.

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