By Nick Giambruno, Casey Research
In the 1989 Batman movie, the Joker (played by Jack Nicholson) showers a crowded Gotham street with free money.
In the scene, it looks like it’s raining hundred-dollar bills. The people love it. Little do they know, the money is actually a trap. Once the Joker has lured them into the street, he unleashes poisonous gas.
I think the latest gimmick to stimulate the economy is pretty much the same thing. It’s one of the most absurd ideas I’ve heard in a while. And that’s saying something, considering the outrageous schemes our economic luminaries have recently come up with, like…
- Faking a space alien invasion to help stimulate the economy.
- Minting a trillion dollar coin.
- Negative interest rates.
- Banning physical cash.
- Cash for clunkers.
- Increasing rounds of money printing, euphemistically called “quantitative easing.”
These ideas would be comical if people in power didn’t actually take them seriously. But they do.
It’s the same bad medicine the economic witch doctors have been prescribing for years. With a track record like this, it’s hard to imagine they could come up with something even more ridiculous. But they have.
This latest gimmick goes well beyond the absurdity of their previous ideas. It’s verifiably insane. And the scariest part is, this dangerous idea is gaining currency. It’s spreading across the world like a smallpox outbreak.
Politicians and establishment economists call this scary idea “a basic income.” I call it sheer lunacy.
It’s where the government gives you money just because. There’s no requirement to work or even display a willingness to work. You could sit at home all day, watch TV, and still get a check from the government.
Simply put, a basic income is “free” money the government hands out to everyone unconditionally.
European politicians are heavily pushing this policy.
- Finland wants to pay its citizens around $1,000 a month.
- The Netherlands and the U.K. have also proposed dishing out free money.
- In Switzerland, there’s a proposal to hand out around $2,800 a month to everyone. This one is surprising since the Swiss are generally sensible about money.
- The basic income virus has also infected Canada, which recently announced a pilot program in Ontario.
It’s just a matter of time before the idea gains traction in the U.S. In fact, U.S. central economic planners are already discussing it.
You might recall former Fed chair Ben Bernanke’s nickname, “Helicopter Ben.” He got the name after he spoke publicly about using helicopter drops of money to “stimulate” the economy. This is just another flavor of a basic income.
Whether you call it free money, a basic income, or helicopter money, the idea is spreading. It’s the next potion the economic witch doctors will use once their latest scam—negative interest rates—not only fails to cure our economic ailments, but predictably makes them worse.
No matter, the idea will be politically popular. Who would protest free money?
And, once a country adopts a basic income, it would be next to impossible to get rid of it until the system collapses under its own weight. Who would vote for a politician that stops (or even slows down) the gravy train?
The Joker used free money to lure the people of Gotham to poisonous gas. Now real world politicians are using the same trick. They’re using free money to lure the masses into perpetual dependence on government.
More Problems Ahead for Europe
If Europeans think they have a migrant problem now, just wait until they institute a basic income.
It’s obvious what will happen…
Once European governments start handing every person thousands of dollars in free money each month (more than many in Africa make in a year), everyone will be scrambling for Europe.
A basic income is a sure recipe for economic disaster and increased cultural tensions. It’s an environment where blowhards and demagogues flourish. Unfortunately, this has happened repeatedly throughout Europe’s history. Once again, it’s going to lead to some very bad things.
I think a basic income will greatly accelerate this recurring trend.
Without a basic income and other welfare benefits, immigrants are usually skilled and the very best of people. But the average European will surely forget that once free money draws in the world’s riffraff.
This is why, although the financial effects will be severe, the sociopolitical ones will be much worse.
Here’s the bottom line: All you can do is protect yourself from the consequences of all this stupidity. This is a big reason why I think everyone should own some gold.
Gold is the ultimate form of wealth insurance. It’s preserved wealth for thousands of years through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.
Unfortunately, most people have no idea how to prepare for the next economic collapse…
The statements, views, and opinions expressed in this article are solely those of the author and do not necessarily represent those of EMerging Equity.