Although G.D.P. numbers still aren’t perfect — they are subject to periodic revisions, for example — the basic problem has been largely solved. So why not issue shares in G.D.P. now?
Such securities might help assuage doubts that governments can sustain the deficit spending required to keep sagging economies stimulated and protected from the threat of a truly serious recession. In a recent pairof papers, my Canadian colleague Mark Kamstra at York University and I have proposed a solution. We’d like our countries to issue securities that we call “trills,” short for trillionths.
Let me explain: Each trill would represent one-trillionth of the country’s G.D.P. And each would pay in perpetuity, and in domestic currency, a quarterly dividend equal to a trillionth of the nation’s quarterly nominal G.D.P.
let me get this straight. the govt doesnt own the total gdp of the country, does it? so its not like paying a dividend out of profits.
rather they have to give money they dont have to the buyers.
lets say China buys a trillion shares. So the gov will have to give China all of what we produce every year in perpetuity. from where? In year 1 china owns the whole country. in year two what happens?
I am trying to understand how trills even makes any sense.
A dividend, by definition is “a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).” The key word is profits. GDP is just a measurement of throughput. It does not provide goods or services, cannot make a profit, and hence cannot pay dividends. However, a trill may pay out of “reserves” but then it becomes a ponzi scheme. Am I wrong wrong on this?
I can’t believe what I just read. The dividend still has to be paid from taxes, more borrowing, or with printed money, there are no other sources. This was not mentioned in the article. What was mentioned is that the “dividend” payment (as they describe it) would fluctuate with nominal GDP, providing “flexibility”. So, when the Fed creates an artificial boom, GDP rises, the “trills” become more valuable, making it possible for government to borrow more! Great, a Fed induced boom combined with even easier credit for government! These guys are geniuses! Sounds like sub-prime “innovation” for government debt. Not mentioned in the article: What about the $11 trillion in existing debt that has already leveraged the nation’s GDP? Plus, $50 trillion in unfunded liabilities (future social security and Medicare)? Let’s just keep drinking from the punch bowl.
righter than you imagine, cause its not even as viable as a true ponzi scheme. in a ponzi scheme at least the crook is out there getting new customers to pay the old ones, like for example social security. but here once a trillion shares are sold, what else is left to sell?
yep. the only way to produce something from nothing. of course they try every once in a while to make money by taking over something and excluding all competition, like the post office. but oddly enough , they always wind up losing money, big time. must be a jinx or a curse.
So, this seems to give the government a reason to keep the GDP down. They could do that by not inflating, but inflation is how they keep their friends rich. So, they’ll have to inflate, then use regulation or price controls to keep GDP down.