How should a nation respond to a disaster? In Australia, when floods or firestorms strike, our hearts break and our hands reach out to help however we can. What extra we have; in some cases far more is poured out to help those who have lost everything. And yet this libation merely covers the open hole that is left; an inadequate repair that leaves much to be done over the months and years ahead.
How then on a deeper level do we cover the losses? Insurance goes a way towards this; the practice of the many setting aside wealth over time to provide for the fewer in deep emergency. And yet this too is patchy and inadequate, only dealing with a fraction of the costs.
Is there a role for government, exacting a levy, drawing down further on our excess over time to cover? Or by taking on debt; spreading the cost over a generation? The difficulty in these is that firstly there simply ins’t a lot of excess. Secondly, that they take away from today or tomorrow’s growth, to cover the cost of replacing and repairing items and infrastructure already paid for.
What we need is the capacity to take away from the value of things done in the past, spreading out the cost of repairing the past over a national base.
In other words we should be considering simply printing the money to pay for the rebuild.
‘Printing money’ is not something to be undertaken lightly. It does not conjure worth from thin air – or even from thin paper. It pulls that value from everything done in the past, concentrating it here and now. It is a literal devaluation of every dollar we have built up, every loan we still hold. It makes the past less valuable than the future.
And yet, in this type of situation it may be the best, most appropriate response. It allows a far wider draw of value than taxation, and one that is ‘in kind’ with what has been lost. From our homes to pay for theirs. From our roads to rebuild theirs. From our savings that those who have nothing may not be without.
A discrete expression of from our hearts to theirs.