Stimulus payments not likely to help economy: IMF
The International Monetary Fund (IMF) says cash bonus payments are not the best way to stimulate the economy.
The IMF’s comments come after many countries including Australia, the US and China have implemented their own stimulus packages to in order to help boost the economy.
The Australian Federal Government has just spent $21 million on the recent cash handouts, with the impact yet to be felt.
IMF chief economist, Olivier Blanchard, said that speeding up infrastructure projects is a better way to stimulate the economy during a recession. He said that stimulus payments are not the most effective solution as the Government cannot guarantee it will be spent as intended.
“If people were to spend it, it would be great. The main problem is basically at this stage, we think if we put money randomly in people’s pockets they’re going to save most of it.”
“At this stage what we need is an increase in demand so you basically want to put the money where it’s going to be spent.”
Federal Opposition leader Malcolm Turnbull was quick to seize on the comments, having long been opposed to the Rudd Government’s cash handouts.
“Olivier Blanchard makes the point, as we have made, that if you simply put out cash randomly, have big cash splashes, in a climate like this, people will save it rather than spend it.”
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Yes it is right.By just giving Bonus and all Economy cannot go away.
I agree with Blanchard, \”if we put money randomly in people’s pockets they’re going to save most of it.\” There\’s some stuff like food stamps that will force the money to be spent in specific areas, so I hope that\’s enough to make the economy still run.
A donation of part, or all of your Australian stimulus bonus to charity will certainly assist those less fortunate than ourselves – and you can claim your donation at tax time!
Many charitable organisations are seeing traditional income streams dry up, while there is a greater demand for our programs and services.
A great opportunity to use your bonus money without it impacting on your regular income.