Economics question...

[imamartian]

This rich, generous Saudi Prince comes along and decides to give every person in the UK £1M. What effect would this have on our economy?

Would it improve things? or would it cause a problem?

Or would we all be sitting in our Rollers, stoned on Champers not giving a t*ss about the economy?

 

[wms]

I would say that it would grind this country to a halt,

WHY? because everybody would get on the first plane and leave this sh.t hole of a country.

 

[imamartian]

apart from the looters who'd have a field day.... or would they care with a million squid in their squat?

 

[imamartian]

a serious attempt at serious debate.... think i must be on too many peoples' ignore lists to provoke conversation...
not even a joke from Tim

 

[Blasphemous]

The place would indeed grind to a halt. The rich would be richer and the poor would be rich (for a short while!... read on). But its the poorer paid jobs like having your bins emptied, having an emergency service, armed services etc etc that would grind to a halt as those people wouldn't need to work... that is until, you apply real economics.

If you want to apply real economics to this debate and consider it as a 'real' scenario then essentially the country would just catch up with its self. What I mean by that is, the jobs that 'NEED' doing still need to be done (see above) and to get anyone to do those jobs you'd have to pay a premium (as everyone is now a millionaire thanks to our Arab friend!) so they're not going to work for peanuts. Yes you could bring in workers from other countries and get them to do the menial jobs but its not a viable option to fill ALL of the low paid jobs with workers from other countries. We just couldn't support that kind of influx of low paid workers (even if we were all millionaires!). And they couldn't afford to live here anyway. So, if you have to start paying higher wages for what were low paid jobs (until this rich Arab made us all millionaires), then obviously prices have to rise to support the inflated wages. As goods and services increase in price, people demand more money (wages) to keep up with inflation. Because of this demand for higher wages, the cost of goods and services rises again... and so the spiral begins again. That is a very simple description of how an economy cycles. There are many other factors that determine how the economic cycle is effected (or not) such as Demand Management which would be a factor in this case as a LOT of people would suddenly have a LOT of money to spend and so demand for goods and services obviously increases because of this new found wealth. But again, who would supply these goods and services? A shop worker would need to be paid a lot more as he/she is now a millionaire too!

Economics is essentially quite simple but many Economists like to make it sound complicated... well they don't want you nicking their very complicated jobs do they?

 

[Trazor]

The government would have to devalue the pound, to the point where your one million would be worth say £100.

Otherwise the country would would just crash and burn, then massive inflation would cause the above effect instead.

As Lisa Simpson said "If everyone is special, then no one is special."

 

[imamartian]

is it not just as simple as the the new 60 million rich people would move into one rich 'class' in the country, and all the essential jobs would be done be a 'lower class' which would be immigrants, who would be shipped in by the boat load?

 

[Blasphemous]

is it not just as simple as the the new 60 million rich people would move into one rich 'class' in the country, and all the essential jobs would be done be a 'lower class' which would be immigrants, who would be shipped in by the boat load?

Errr, NO?! We wouldn't all suddenly be equal in wealth would we? This country has loads of extremely wealthy people already, some for whom another million wouldn't be here or there. So if we were ALL a million pounds richer tomorrow we wouldn't be any better off than our neighbour, brother, sister, etc etc as they would be a million pounds richer too! Yes we'd ALL be 'rich' but only for a while due to 'Economics'. The only way you could benefit from this wind fall would be to move to another country that hasn't been as fortunate to have a nice Arab benefactor.
Then these 'immigrants' that you say will be shipped here by the 'boat load' to do all the essential jobs, where are they going to live? How would they finance living in a country full of millionaires? Although, if we've all left they could start all over again. Hell, they can even have my garden shed... for a nominal fee of course... hey! Alan Sugar didn't get where he is today by giving stuff away

 

[tim west]

a serious attempt at serious debate.... think i must be on too many peoples' ignore lists to provoke conversation...
not even a joke from Tim

Sorry I was just busy spending the money.

 

[Steve69the69Gas]

 

[gremlin16]

The government would have to devalue the pound, to the point where your one million would be worth say £100.

Otherwise the country would would just crash and burn, then massive inflation would cause the above effect instead.

If that the case we must all be millionairs now.

 

[Deluks]

If that the case we must all be millionairs now.

This time next year........

 

[WoodYouLike]

Zimbabwe comes to mind
Loads of trillionairs - no food