Hypothetical: Imagine the government builds a huge hole in the ground and then convinces the population at-large that a bunch of very wealthy people live at the bottom of the hole. They promise that any product which is dumped in the hole will be paid for, at the standard market rate, by the people in the hole via a government proxy.
To keep itself from going totally bankrupt the government can defer payments until sufficient taxes are collected but sincerely attempts to make good on its payments. The people of the country are incredibly gullible in this one regard and never figure out that no one lives in the hole but are otherwise normal and productive people in every regard.
My question to /biz/: Why isn't this the greatest economic idea ever?
>>1231898
Isn't that how the world works now?
>>1231899
To a lesser degree. I'm more interested in how this won't raise employment, generate economic growth, and herald a new age of wealth and prosperity for all.
>>1231898
The government wouldn't have enough money to keep this going for very long...
>>1232276
oh yeah the endless amounts of accumulating debt would just induce hyperinflation, and you never addressed if the government pays interest on the payments.
>>1231898
Because economic activity is a means to an end (prosperity), not an end in itself. Throwing your consumption goods down a hole is about as useful as burning up your paycheck the moment you get it.
As for the payment by the government, that seems feasible enough. The net effect is for government to extract taxes in kind rather than in cash (goods thrown down a hole rather than cash to the tax office). It doesn't add anything to anyone however.
OP here, on another device.
>>1232410
>Because economic activity is a means to an end (prosperity), not an end in itself.
By all accounts there's some very happy and prosperous people at the bottom of that hole though. What difference does it make if you sell a product to a stranger on the street or a "man" at the bottom of a hole? The end result is I'm doing producing goods and getting money for them. If only useful goods count why are so many people engaged in making "useless" things like alcohol, sports cars, gossip magazines, porn, or the like?
