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Let's say there are approximately 70 million men, women, and children in the UK. The government's annual expenditure, apparently, is something close to £775 billion.
Why couldn't they just give £1 million to each person tax-free just once, and make each of us a millionaire? Wouldn't that be a massive boost to the economy, and represent only a tiny fraction of the annual national spend?
Bear in mind that it is Sunday afternoon, and I have not thought this through, so there are probably many reasons why this would not work. I just can't think of them.
One of many problems would be the service industry collapsing.
Because then everyone would leave work and there'd be no services, transport, farming etc etc and all the shops would shut so there'd be nowhere to spend your now worthless money.
Any economy relies on some people having less money than others.
Lend us a £1m and I'll let you know the secret.. 😉
£1m for everybody is £70,000,000,000,000, which is significantly more than the £775,000,000,000 budget total, it's not a "tiny fraction" at all.
I feel like I've seen this argument before...
Partly because 70,000,000 x £1,000,000 makes £70 TRILLION. That's not a tiny fraction of £775 Billion, it's 2 orders of magnitude more...
What about if we decided to close Britain at the same time. Just tell everyone "we've had a good run, here's your million quid, now leave the country we're turning it into a nature reserve".
Many more people than you would think are worth a million by the time they reach their sixties. They'd need to be dead though.
I think Saxon rider was thinking it was British Billion. It is not.
But the simple answer is you could still do it but the problem would be inflation. The total value of the economy remains the same but is there are now more £1 for all this value. So the value of a pound collapses
Good news for people with mortgages and dept
Really bad news for all savings including Pensions
In may ways it would be the same as saying tomorrow everyone has no money. All dept and saving are cancelled. Hardly an incentive to say have had a job...
Surely we can all get by. Perhaps with a little help from our friends.
Childish economics question: Why can't we all be millionaires?
Mega hyper super-doper inflation me think? Yes?
Hence, every time you see public servants increase in pay, you see inflation as everyone start to jack up their price to compensate for what they pay out to their employees (everyone demands pay rise).
In the far east every time the public servants get salary increment the rest of the population suffer.
I wish I was a millionaire!
I wish I was a little bit taller.
I wish I was a baller.
I wish I had a girl who looked good, I would call her
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I would settle for £10 and a packet of bacon crisps....
I wish I was a little bit taller.
You can get special shoes for that don't you know
@Saxon as above £775bn (775 and 9 zeros) is about £12,000 per head and of course of the 775bn a huge amount of that is buying / paying for equipment, we would in your example have no NHS.
Think about other countries. By some people's standards we already are millionaires. But by those standards food costs thousands. Why? Because the farmers who grow it and the shopkeepers who sell it also need thousands to buy their own food, and so on.
If everyone had a million quid you'd have to pay people loads of money to get them to do anything, including farmers. The price of food would rocket, and then so would everything else. So your millions would become worth little as everything would be expensive. This is called inflation 🙂
What is most people answer to this question?: "what would you do if you won the lottery"? the vast majority if not all would say "give up the job and lie on a beach". Not many people would say "save it and work even harder in the office".
Anyway, there is no better way to devalue money than to dish it out willy nilly. Most people in Zimbabwe are multimillionaires...but not many can afford a loaf of bread let alone a Ferrari.
In theory (I think) everyone in Qatar is on $3m pa but the government doesn't dish it out, they provide free electricity / gas / housing but the state keeps the vast majority
Ok, so one answer is that there isn't enough money, the OP is out by two orders of magnitude.
But the govt could simply invent the money. In that case, the answer would be that we would be all millionaires, but the currency would be worth much less due to inflation. There wouldn't be any more houses or apples or cars, we wouldn't actually be any better off really.
I do like the idea of a basic income though, probably somewhere in the region of 5-10k per person, then you are on your own as far as all other benefits and top-ups etc are concerned...