TRIGGERnometry David McWilliams: "We Can Avoid a Great Depression"
May 6, 2020
David McWilliams, an acclaimed Irish economist and podcaster, brings his sharp insights to a lively discussion. He evaluates the risk of a potential Great Depression while stressing the essential role of central banks and innovative support strategies like 'helicopter money.' The conversation also covers post-Brexit trade dynamics, contrasting leadership styles in the UK, and how COVID-19 has reshaped consumer behaviors and urban planning. Finally, McWilliams shares his podcast recommendations, highlighting valuable content for listeners.
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Current Economic State vs. Great Depression
- The current economic situation exhibits similarities to the Great Depression in terms of GDP falls, unemployment, and fiscal deficits.
- However, the current problem is primarily a lack of money, a cash flow issue, rather than a structural economic collapse.
Helicopter Money as a Solution
- Implement "helicopter money" to directly inject cash into small businesses.
- This addresses the cash flow problem and prevents business failures due to lack of trust and credit.
Power and Credibility of Central Banks
- Central banks derive power from their credibility in fighting inflation, enabling them to create money during deflationary periods.
- Money's value isn't intrinsic, it's socially constructed, based on belief and trust in the central bank.