To Fix The Economy, Let's Print Money & Mail It To Everyone

[magical thyme]

40. Per Pew Research the 2008 crash cost $108K per household

September 2008 crash cost $108K per US household
The Pew Trust has done the math and it turns out the economic crash of 2008 incurred about $108,000 per US household in costs and stock and house-price losses:
http://boingboing.net/2010/05/25/september-2008-crash.html

The velocity of (money) circulation and inflation
....During the period of quantitative easing, we saw a big rise in the monetary base, but, inflation didn’t increase....To be more precise, banks didn’t want to lend this extra increase in the money supply, they just kept bigger bank reserves. Therefore, the money supply didn’t filter through to the wider economy.....
http://www.economicshelp.org/blog/9373/inflation/velocity-circulation-inflation/

What Is the Quantity Theory of Money?

The concept of the quantity theory of money (QTM) began in the 16th century. As gold and silver inflows from the Americas into Europe were being minted into coins, there was a resulting rise in inflation. This led economist Henry Thornton in 1802 to assume that more money equals more inflation and that an increase in money supply does not necessarily mean an increase in economic output. Here we look at the assumptions and calculations underlying the QTM, as well as its relationship to monetarism and ways the theory has been challenged.

The quantity theory of money states that there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold. According to QTM, if the amount of money in an economy doubles, price levels also double, causing inflation (the percentage rate at which the level of prices is rising in an economy). The consumer therefore pays twice as much for the same amount of the good or service.

QTM Assumptions
QTM adds assumptions to the logic of the equation of exchange. In its most basic form, the theory assumes that V (velocity of circulation) and T (volume of transactions) are constant in the short term. These assumptions, however, have been criticized, particularly the assumption that V is constant. The arguments point out that the velocity of circulation depends on consumer and business spending impulses, which cannot be constant.

The theory also assumes that the quantity of money, which is determined by outside forces, is the main influence of economic activity in a society. A change in money supply results in changes in price levels and/or a change in supply of goods and services. It is primarily these changes in money stock that cause a change in spending. And the velocity of circulation depends not on the amount of money available or on the current price level but on changes in price levels.

QTM Re-Experienced
John Maynard Keynes challenged the theory in the 1930s, saying that increases in money supply lead to a decrease in the velocity of circulation and that real income, the flow of money to the factors of production, increased. Therefore, velocity could change in response to changes in money supply. It was conceded by many economists after him that Keynes' idea was accurate.
http://www.investopedia.com/articles/05/010705.asp

In case it is not yet obvious to you, what I am saying is that the crash of 2008 vaporized $100,000/family from the economy. The fed attempted to restore that money to the economy by giving the banks $16T to lend back to the people who were robbed. However, the banks are sitting on the $16T (not that the people who were robbed should be required to borrow back the money that was destroyed). Therefore, the economy -- and more specifically, the people who owned that money -- is still short that $16T. If the fed provides the $16T directly to the people who were robbed, it will begin to circulate again. It will not cause inflation. It will go a long way toward making the victims of the 2008 theft whole again.