Is it possible that Jon Stewart is smarter than Fed Chairman Ben Bernanke?
Earlier this week, on The Daily Show, Stewart suggested in an offhand way, that simply giving the $2 trillion dollars in “stimulus” money (or bail-out money… whatever), directly to the American people for the sole use of paying down their consumer debt. Start everyone with a clean slate, or in other words, to use his expression, “hit the reset button” on the economy.
The logic has some merit to it. After all, the banks would get their money and consumers, free of their towering mountains of personal debt, would then head right back out and start spending; thereby doing precisely what the government wants them to do in order to reinvigorate the economy.
Now I know there are lots of reasons to argue against such a scheme (possible creation of systemic “moral hazard” for instance) but Stewart’s “fine idea” isn’t without historical precedent. According to Aristotle, the ancient Greek leader Solon instituted a set of laws called the Seisachtheia whereby all outstanding debts of the Athenian people were immediately forgiven and lands returned to their traditional owners.