The world awash in money, but it doesn't necessarily help. I watched this very interesting documentary on You Tube from DW German TV. It lays much of the blame for income disparity on low interest rates and the flood of money mostly available to big time borrowers. This situation fuels real estate inflation, corporate mergers and national debts. It means small savers get practically no interest on regular savings in the bank due to low interest rates. It doesn't do much to help startups or new innovations as banks tend to favor big outfits with recognized track records for loans. Doesn't do much for needed infrastructure either as governments borrow and then feel the pressure to pay back the debt leading to austerity measures.
In my opinion the easy money, low interest situation is created for basically two reasons. To reduce unemployment and to help indebted governments remain solvent. I think that both of these goals could be addressed in different ways.
As for unemployment, society does have an addiction to materialism. More wealth is seen as the solution to every problem. Instead, maybe we could aspire to a philosophy that I saw on a protest sign one day.
"Consume less, work less, live more fully."
Solutions, such as working less, could be seen as improvements to society. Less economic activity to harm the environment, more free time for quality of life things like friends, family and volunteer activity. Less harm to environment at least until green technology can be in place. A way to buy time for the earth while waiting for green technology. To some extent, unemployment can be addressed with better distribution of wealth and work. Shorter working hours, more flexible schedules, job sharing. This could take some pressure off the need to stimulate the economy.
I don't feel like we have to go back to the dark ages, however. Prosperity is good, but, like so many things, it needs to be balanced with other values.
I realize that there is the danger of a downward economic spiral if people strive to work less, earn less and consume less. Consumer spending props up the economy. This philosophy of less consumption would need to be applied carefully. Applied as just one part of a balanced picture.
Reducing consumption shouldn't be that hard as a lot of technology pushes that direction anyway. Miniaturization. Like going from incandescent lights of the past that were energy hogs to LED technology. Solid state electronics versus the vacuum tube. Telecommuting versus driving.
Seems like technology keeps advancing whether the economy is booming or not. Advances in manufacturing can reduce the need for hard work. We are awash in low cost products to buy and free information on the internet. The big problem is that certain important things, like housing and healthcare, have become so expensive that living the less hassled life becomes improbable. One must work two jobs just to rent a studio apartment in many cities. This is a problem caused by too much money inflating certain sectors of the economy while other sectors bring abundance at low cost.
Idealistically, the true bottom line should be quality of life, not just amount of income, but it's hard to strive for that quality when an astronomical rent is due. In spite of great abundance due to prosperity, we seem to be facing a problem of inflation in certain sectors such as housing that is fueled by too much money. Money in the wrong places.
As for the problem of funding governments, here are some ideas that people might think are "off the wall." I've read some of these suggestions before so they aren't just out of my hat. Of course collecting taxes is the idea way, but given Republican style politics in the US and other places, tax collection is difficult. The need for government spending continues anyway as even Republicans want bigger defense outlays and practically no one favors big cuts in things like Medicaid.
Since central banks are printing money anyway, why can't they just give part of that money to governments? Yes, just give it for free. At least part of the time. Give it out rather than loaning it to be paid back. If they want to stimulate the economy, why can't they just print the money and give it to the government to spend on infrastructure, scientific research and other "big picture" needs of society?
I think a lot of economists would think this is a preposterous idea that would lead to uncontrolled inflation. Well, the world is awash in money now and we have high inflation in many sectors today, such as housing. In some cases, governments are so far in debt, that money isn't likely to be paid back anyway. Even if the money is given to governments for free, central banks can still, conceivably, cut back on that money supply to curb spending and inflation.
Maybe the central banks could provide government revenue as a combination of loans and free money.
Maybe I'm a bit cynical about Republican tax cuts and spending (military) plans. We might have to give up on the idea of paying back the loans. That admission could rock the economic boat, but we really have to rethink economics anyway.
We should figure out some soft landings and thoughtful transitioning of in our way of doing things. Hopefully we can avoid panic.