Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Let's do some numbers.

According to recent estimates, in Spain there are 1.4m households where nobody is working, and half a million households with no income.

The relative poverty level (60% of median household income) is about €15k a year.

So, if you decided to pay €15k per household to the 500,000 households with no income, it would cost €7,5bn per year. Since Spain's GDP is roughly one trillion per year, it would cost less than 1% of GDP to "artificially" bring all the households with no income above poverty level.

€15k per year for 2m households would come to €30bn per year, or 3% of GDP.

If you believe in the quantity theory of money, this could accelerate inflation by 3%. But it you make this into a job guarantee programme there would be additional goods (but mostly services) provided by the programme participants and inflation would be reduced.

What, we can end poverty and unemployment for 3% of GDP? Why are we not doing it?

Finance is the brain [tumour] of the economy

by Carrie (migeru at eurotrib dot com) on Tue Jul 23rd, 2013 at 11:53:22 AM EST
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