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Experts are letting the people spend money again......

Experts are letting the people spend money again......

Experts are letting the people spend money again......

1

In a recent program, CCTV celebrity Bai Yansong frowned in the camera, worried, and asked the expert with a sincere face:

The common people have money but he doesn't dare to spend it, he doesn't want to spend it, what do you think makes people willing to spend money?

Experts are letting the people spend money again......

Image source: Internet

I have to say that it has to be Mr. Bai who can ask questions.

I remembered Wang Shuo's previous evaluation of him: a meat horn with an inexplicable sense of superiority, and always likes to lock his brows and play the role of social conscience.

Regarding stimulating consumption, I talked about it in my previous article "Economist Wu Xiaoqiu: Don't Stimulate Domestic Demand Again", and today please allow me to nag two more words.

The question is ridiculously asked, and the premise and question itself are ridiculous.

The premise of whether ordinary people dare to spend money is to have money.

The following chart is Shenwan's estimation of our residents' wages, net property income, net transfer income, and operating income after the epidemic.

Experts are letting the people spend money again......

Image source: Shenwan Hongyuan Macro

According to the survey data published by the China Institute of Income Distribution of Beijing Normal University in 2021, the population of the mainland with a monthly income of less than 2,000 yuan is about 964 million.

With this economic situation, can you say that the common people have money?

After deducting the basic living expenses such as eating, drinking, and Lazar, there are also worries about medical care, education, and pension.

If we don't talk about these things, let's talk about how to make the people spend money, is this different from playing hooligans?

2

Some people say that we have 130 trillion resident deposits!

This has to be talked about, accounting for only 0.33% of the total population, accounting for 67% of wealth, per capita wealth of more than 63 million, and the number of people is about 4.6 million.

The consumption of this part of the population is upward, outward, they do not have the problem of insufficient consumption, can they squeeze out flowers again?

The reality is that the consumption of the rich is "saturated", and the consumption of the poor is "overdrawn".

It's not that you can't stimulate consumption, but stimulating it is not the norm, and frequent stimulation may not only not solve the immediate problem, but also cause a bunch of sequelae after a long time.

Stimulation is like taking anesthetic before surgery, if you do anesthetic without surgery, after a long time, not only will the anesthetic be useless, but your nerve endings may also be stupid.

If we want to think about domestic consumption, we have to make the wallets of these 900 million people bulge, which is the basic disk and increment of our consumption.

Consumption is a function of income, and a more comprehensive expression would be that consumption is a function of income, income expectations, and wealth stock.

If you admit that "consumption is a function of income" on the one hand, and on the other hand hope to increase consumption to boost economic growth, is it logically reasonable?

In order to increase residents' consumption demand, it is necessary to first increase residents' income.

Income has increased, wealth has increased, and with perfect social security, people really don't have to go to great lengths to stimulate spending money.

3

Economist Lin Yifu said in an interview:

Investment-led economic growth is unsustainable and should be replaced by consumption-led economic growth.

I think the people who put forward this view either don't understand the economy or deliberately mislead China. 

If there is no increase in household income brought about by the increase in labor productivity, consumption growth is unsustainable, and if income does not increase and consumption increases, consumption begins to rely on savings, and when the savings are exhausted, they become household liabilities, and after accumulation to a certain extent, they may become household bankruptcy.

Professor Lin's views have also drawn criticism from a number of so-called economists and experts.

Their logic doesn't seem to be too wrong: the ultimate goal of our production is consumption, and when people's consumption increases, it will stimulate market demand, push enterprises to expand production, create more jobs, and thus promote the development of the entire national economy.

The purpose of economic growth is to continuously improve the consumption capacity and living standards of the people, but this is the goal of economic growth, not the means or economic logic.

Especially at a time when many household balance sheets are damaged, stimulating consumption to stimulate the economy may be counterproductive.

I have no objection to issuing consumption vouchers, or even money, but it is not enough to stimulate consumption only through this kind of stimulation, it is not the main means, it cannot solve the fundamental problem, and it is still necessary to increase the people's income and purchasing power at the source.

Investment-Consumption is a circular system, but now this cycle is not smooth, or broken, blocked, what should I do?

There needs to be an original fulcrum to break it and let it gradually embark on a virtuous cycle, and investment is still the original end point of solving the problem in the moment.

As I said before, 70% of residents' wealth is locked in their houses, their balance sheets are badly damaged, and companies are reluctant to borrow money to expand production.

4

Some people say that all the roads that should be built have been built, the houses that should have been built have almost been built, the bridges that should have been built have been built, and there is a surplus of investment.

Government investment in infrastructure is a public good, and investment in public goods generally has neither commercial returns nor cash flow generation.

Take the recent Northeast tourism boom, the ice and snow world has brought wealth to Harbin for a few days!

The mainland's broad infrastructure investment is far from saturated, especially in the fields of new infrastructure such as medical care, elderly care, education, scientific research, underground pipe corridors and information, China's infrastructure stock is far behind that of developed countries, and in some respects even inferior to some developing countries.

Many scholars oppose increasing investment in infrastructure, fearing that "face-saving" projects and "tofu scum" projects will waste resources and even breed corruption.

These concerns are valid, but it is a question of how to make an investment, not whether it should be invested.

A virtuous circle in which consumption and investment reinforce each other should look like this:

Growth in infrastructure investment in a broad sense - growth in various types of investment - growth in income - growth in consumption - growth in income - growth in investment and consumption - growth in income.

In this cycle, income growth is the starting point, and fiscal expansion in the current situation is the original support point for broad infrastructure investment.

Only in this way will it be possible to find the starting point of a virtuous cycle of consumption and investment and to initiate a positive interaction between investment, consumption and economic growth.

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