What would happen to the US economy if the government gave $100,000 to each citizen when they turned 18?

Question

(The US Mint would print new 100k bills and give them to people on their 18th birthdays).

Answer 1

We'd have to give 90,000 dollars back in taxes...
and we'd be paying 50% of our income to the IRS...
Also, a chocolate bar would cost $75.99...

Answer 2

The population pyramid (see link below) indicates that in 2000 there were approximately 20 million people in the US between 10 and 14 years old inclusive. That group now would be 17 to 21 years old now. Assuming the 20 million to be distributed evenly across the age range would mean about 4 million (20/5) at the age of 18 now.
Ok now you print $100K for each of them. That's 400 billion in paper that you've created. Of course now you have the 400 billion you just created plus the all the current money in circulation having the same spending value that all the current money just had.
You have taken the value of a dollar to an all time low. This would result in an economic crash.

The other reason this wouldn't work is that very, very, very few 18 year old people would be responsible with that much money. I know I wouldn't of been at that age.

All that said it's a fun scenario to image for someone about to turn 18.

BTW.. How old are you? :)

Answer 3

It does no longer have been sufficient to offset loses for many. there have been 2 issues the crooks have not been in a position to get to. those have been human beings fairness in there residences, which while they have been given older they could use and function a place to stay and the different replaced into human beings 401Ks. those in many situations did good and each so often took a fulfillment with the aid of a sector or inventory, yet no longer something like this have been a million/2 replaced into wiped out. economic communicate human beings have reported the 'poisonous debt" is a trillion for each and all of the mortgages. provided that they began those mortgages in the time of the Clinton administration lots of the human beings who have been given mortgages have long provided that punted on the indoors maximum loan and been evicted. So why the huge deal now? they act like each and all of the very undesirable credit human beings from the final 3 administrations in basic terms at once stopped paying on the same time. No way and that they understand what the traditional undesirable debt individual's habit are. So there is something else this is in the back of this. provided that no one knew the place the money ws going interior the 1st place and nonetheless do no longer, different than remote places, hookers, jets, Vegas journeys, antiques and stuff like that, then they ought to positioned on a canine and pony prepare for us. So some human beings have lost a million/2 their mark downs or greater and fairness, while others rented and had no fairness or on no account had a 401K or have been in sectors that did no longer get harm as undesirable. that's a great thought and could positioned income peoples wallet, yet devoid of tax funds coming in to hide it then the greenback is going decrease and as a effect as quickly as back peple lose wealth. Like a cake that value $5, is now $10 or gas with oil at $40 must be $a hundred and forty vs $195. Inflation. Have a great 2009!

Answer 4

There are about 4 million people in the United States who turn 18 every year, therefore the amount of new money entering the economy would be about $400 billion dollars.

For comparison, total tax revenues/expenditures are around $2,000 billion dollars.

Adding this much new money to the economy would cause a significant jump in inflation, perhaps 5-6% instead of the typical 4%. This may not sound like much but the difference would be noticeable and would have effects. For example, it would become more expensive for new home owners to get mortgages.

The value of the dollar would decrease. Some effects of this would be that gasoline, food and other goods, especially imported goods, would become more slightly more expensive for everyone.

The giveaway would make it much easier for students to pay for college and college prices would probably increase to reflect that.

A lot of the youths receiving the money would spend it on luxury goods such as new automobiles, consumer electronics, fancy clothing and jewelry, leading to increased sales and profits in those industries.

Answer 5

It is an interesting question, their was once a movement to reform banking by forcing them to no longer loan out money but instead have the value of the GNP overproduction distributed to every citizen to bring purchasing power up to the number of goods available.

Their are 2,078,201 18yr olds every year and that would mean 207,820,080,000 dollars into the economy, a lot but not not enough to drive runaway inflation. I suspect the result would be a boom in the economy, a vast decrease in the number of people who join the military after High School, a large increase in housing starts, lowering of interest rates for credit cards, a big shift in investing. It would also make 18 yr olds very popular at the Strip clubs. (of course the strippers would all be in their thirties...) I would rather see the original situation where everyone gets a stipend, it would cause the amount to be smaller and more likely to be used as disposable income, thus kicking the economy up (like a roll back on taxes making a larger refund)

Answer 6

We would have rampant inflation which would bugger up the economy. Much better to give heavily-discounted college tuition. At $100,000 you could get four years at a state university for free. Imagine what a gift that would be to those young citizens who truly want it? People of talent from under-privileged backgrounds could realize their potential. The country would be well-educated and productive.

Of course we would have topay for this and printing bills is not going to work. At some point, the "debt" has to be called in.

Answer 7

How about what would happen in the Government gave the Social Security money they took from working people and gave it back to them to invest in a CD or 401K plan of thier choice? Or Implemented the Fair Tax? Of course it may never happen but one can dream.

Answer 8

Did you ever hear of inflation? That is what happens when the Government prints money without having products and services to back it up. So, essentially nothing: just more of the same old same old.

Answer 9

Sports car sales would skyrocket...
And a corresponding increase in Car Insurance premiums would also manifest itself...
The price of recreationals would plummet...
Emergency wards would be forced to form special units to handle the car crash trauma of millions of teens pouring in each Saturday night...

The Horror!!!
The Horror!!!

Answer 10

Inflation rates would skyrocket and the dollar would become worthless causing the worlds economy to be based instead on the Euro.

Answer 11

They don't have enough money right now as it is. Our national debt is increasing way to fast, it's already in the trillions.
They can't just print more money with nothing to back it because it would cause inflation.