Throughout 2023, the level of domestic consumption is on the low side. There is even talk of deflation, and investors who invest in consumer companies have almost all gone short this year.
Today's article does not talk about investment, but about what causes the downturn in consumption and what ways can boost consumption.
The first question: the reasons for the sluggish consumption.
When it comes to the downturn in consumption, the most superficial reason is obvious, that is, it is not easy to make money, or the vast majority of people have to tighten their belts to live, and after cutting back on food and clothing, it has caused a decrease in the amount of banknotes entering the market circulation, and the consumer industry is in a downturn.
Including the increase in household savings, it is not caused by the increase in income, but the worry of most people about future income, so saving in advance and preparing in advance is a last resort to cope with the decrease in future income.
The most important reason why increasing residents' savings is a last resort is that there is no channel for investment profits.
In the past, the engine of the domestic economy was real estate, and at that time, the surplus funds after people's consumption, as long as they entered the real estate, would produce the result of value preservation or appreciation. Now that the real estate industry is in a downward channel, it is likely to lose money after entering, so it is better to save it in the bank, at least there is still some interest in the bank.
After people earn money, they will inevitably increase the level of consumption, which is the so-called upgrade of consumption or consumption quality. This has sparked a boom in a range of industries that cater to consumption. But when people put all their money in the bank, these industries are bound to face a downturn.
This is why the economic engine of the country was real estate. The reason is that people invest the money they earn in real estate, make money on real estate investments, and then use the money they earn to spend. It started with real estate and drove the economic development of the whole society and all walks of life.
But as mentioned above, incomes are lower, or there are no channels to make money, which makes people content to save, so it leads to a ...... of sluggish consumptionThis is just one of the reasons.
Personally, I think there is another more important reason for the sluggish consumption, and that is the widening gap between the rich and the poor.
For example, in the past 2023, although the income of the masses at the social level has decreased, the income has decreased. But if we look at the list of the rich, we will find that the wealth of the rich is still improving overall.
The vast majority of countries and societies in the world have a commonality, that is, a small proportion of people occupy the vast majority of the wealth of the country or society.
In China, it is no exception. Unlike in the United States, the wealth of China's wealthy is not transmitted to the rest of the public as much as possible.
Because the proportion of wealthy Americans is larger, and the rich Americans are more willing to consume, and the reason why they are willing to spend is because they have more consumption channels. For example, rich Americans are keen to buy teams, yachts and .......
In addition, because of the existence of inheritance tax, wealthy Americans also like to do charity, like to set up**, and like all kinds of investments. Through more channels, it is easier to transmit their wealth to ordinary people.
But China's rich are different. For various reasons, only a small part of the wealth of China's wealthy can be transmitted to ordinary people. The factors restricting the transmission of domestic wealth are:
The base of the rich is too small, and the consumption is not enough. Even if every wealthy person in the country has a huge consumption, because the number of people is small and there are too many ordinary people, the total amount and the average transmitted to each ordinary person are limited.
There are relatively few domestic channels for the wealthy to consume. One reason why many rich people in China want to go to the United States is that in the top capitalist countries, the rich can enjoy the ultimate luxury.
At the same time, the country's wealthy have worries in their hearts. Anxiety comes from two things, one is that there is not enough security about personal assets. Because capitalist countries may place more emphasis on the inviolability of individual assets. This point is relatively less emphasized in China.
Second, the rich are worried that future generations will not be able to do it. The reason why many rich people want their children to run out is that they know that their children are not as much as themselves. In China, the survival of the fittest is a very fierce environment, and these children stay in the country, with too many friends and classmates around them, and under their leadership, the rich are worried that their children will participate in various businesses and investments.
The rich know too well in their hearts that the money they earn will not be spent even if their children and grandchildren eat and die every day for many generations. But when these children and grandchildren go to invest, they often quickly lose their fortunes. The more typical ones are Wang Jianlin and Wang Sicong. Compared with Wang Jianlin, Wang Sicong is not a material to make money at all, once he has the idea to do business, it is the beginning of the family's asset deficit. That's why Pan Shiyi wisely let his son run out, because Lao Pan knew that his son's performance might be worse than Wang Jianlin's son. After all, Wang Sicong is not good at business, but at least he does not lose his character, but Lao Pan's son is so stupid that he loses his character.
In Europe and the United States, because of the factor of class solidification, the lower class people do not have many opportunities to get involved with the upper class, so the wealth can be preserved. In addition, when the children of the rich go abroad, they do not have so many friends and classmates, there are many fewer opportunities to invest, and the risk of losing their wealth is much less.
That's why I think that domestic wealth cannot be effectively transmitted, which is also one of the reasons for deflation, including the fact that the rich have nowhere to spend in the country, run out to consume, and the number of people is small.
The second question: how to solve deflation.
From my personal point of view, there are some suggestions for solving deflation, but it should be emphasized that it is definitely not by encouraging the masses to consume.
Encouraging mass consumption is simply not feasible without the support of sustainable income.
So what are the methods?
Method 1: Send money!
The money here is not given to everyone like in the United States. It's about getting some people to improve their welfare.
For example, the elderly over 60 years old can greatly increase social support, such as a large increase in the allowance for the elderly every month.
For example, for children under the age of 6, this is called the education fee, which can also be greatly increased.
For example, women who are pregnant and breastfeeding can be supported by the state for two or three years.
For example, school-age children and teenagers can be provided with three meals a day, or with a subsidy for extended courses.
For example, for the disabled, a large amount of subsidies can be provided. For example, for seriously ill patients, rescue subsidies can be provided. For example, the unemployed are provided with higher levels of social assistance, such as helping to purchase medical care and pension insurance. and some other low-income groups in society, disadvantaged groups. For this part of the group, it is necessary to send more money, and this kind of money should not be deducted and searched, but as much as possible.
This method will not easily cause dissatisfaction among other groups in society, but will on the contrary enhance social well-being. At the same time, it also transmitted the banknotes printed by the state to the masses to a greater extent.
Method 2: Send money.
Improve the remuneration of public officials, teachers, doctors, social workers, etc.
Ha, as soon as I say this, it will inevitably attract objections again, because there will inevitably be many people who will say: their wages are already quite high, and they are still increasing
Yes, and to raise, for the following reasons:
This group of people is basically the most daring to consume because their jobs are stable. And what is needed during deflation is more consumers. Since the beginning of this year, public officials in most areas have cut their salaries a lot, which is actually a vicious circle for social and economic circulation. For example, buying a house, basically in any city, it is this part of the people who have the strongest willingness to buy a house, but now they have reduced their income a lot, so who are expected to support real estate?
I have always believed that the behavior of ** is a measure of risk for the corrupted, that is, a measure of the risk of losing a job and being punished by law. For example, the county magistrate of a county town, his annual salary income is 100,000 yuan (the normal salary of the county magistrate of a third- or fourth-tier city), but he can earn 10 million after taking the risk of signing a letter. In the face of 100,000 and 10 million risks, will anyone take risks?
This is like a scale, the weight on the left is 100,000 per year, a total of 3 million for 30 years of service, and the weight on the right is a risk that can get millions of millions.
When the weight on both sides of the scale is extremely unbalanced, I think there will be a lot of people who will take risks. But if you increase your wage income, you will increase the weight of the left weight. Then increase the risk of the right weight. For example, a public official will be imprisoned for 100 yuan. Then in the face of an annual salary of 300,000 yuan after an annual increase in income, it is also close to the normal safety income of 10 million in 30 years. Then the right weight is too small to be worthy.
In this way, many people will hesitate in the face of some opportunities for petty greed. And: to increase the risk of public officials, doctors, and others who have access to social resources breaking the law. For example, an apple can be dismissed from public office, more than 50,000 indefinite, and more than 100,000 death penalty. And then at the same time to raise a reasonable income through work. If the balance between greed and non-greed is more balanced, then phenomena such as ** will be reduced.
Let's talk about a view, that is: who will take over the trillions of real estate?Who will contribute to the negative population growth?
The answer is also these people who eat the financial meal. In fact, there are already precedents in many cities in the early stage, and there have been many county magistrates calling on public officials to buy houses, and even directly asking for the news that they must buy houses.
Public officials, including doctors, teachers, and employees of state-owned enterprises, may disagree with my statement when they see me, but in fact, they are the ones who can best realize the real estate takeover and contribute to the positive population growth. The reason is that they have to obey the policy.
But then again, it is difficult for a good woman to cook without rice, and it is not feasible to let this kind of person be a pick-up man, but also to reduce the salary. The best way to do that is to raise their salaries and then let them be able to take over.
For the salary increase of public officials, the happiest should be those who are engaged in the consumer industry, such as the owners of catering, beauty, entertainment projects, etc., because there will inevitably be more people who come to consume. Therefore, when it comes to raising the salary of public officials, many people are extremely unbalanced, in fact, they do not understand that the capital in society is constantly transmitted. When the source dries up, the river naturally dries up. When the source is abundant, the river naturally overflows.
This kind of money distribution not only increases the spending power of consumers, but also restricts social corruption, which should also be feasible.
Method 3: Send money!
The demographic problem we are facing now is population decline.
So how do you encourage childbearing?
By slogans?
Do you rely on some small favors and small policies that are inconsequential?Definitely not, to really encourage fertility, you need to make a heavy bet.
For example, if you have more than two children, you can choose your own degree. If you have more than two children and buy a house, you can subsidize half of the funds.
If you have more than two children, how much is the annual subsidy? Public employees, employees of state-owned enterprises, and other groups that have access to social resources must not give birth before the age of 30 and must not be promoted or raised. If a public employee does not have more than two children, the pension will be halved.
In short, families who are willing to have children and have more children will be given a large financial subsidy.
This in turn increases the fertility rate and encourages social consumption.
Method 4: Encourage the rich to spend.
Encouraging a large part of the population to consume will not work, because this group of people is limited in their own income. But it's perfectly okay to encourage the rich to spend. As for how to encourage, first of all, it is not possible to force it, and it is necessary to introduce some policies to make the rich willing to consume and willing to consume.
So what do the rich want most?In fact, it is very simple, it is either a yellow coat or a gold medal for avoiding death. The yellow coat is fame and prestige, status. The gold medal for avoiding death is to ensure that future generations will continue to be rich.
The yellow jacket can encourage the wealthy to donate, and after donation, it can give more fame and status.
The Gold Medal can be achieved by establishing a national inheritance tax, but the wealthy can reduce the amount of the inheritance tax after a certain amount of consumption.
At the same time, encouraging the wealthy to set up various types of families** can effectively ensure that future generations do not lose their wealth.
In order to reduce the wealth of the rich, relevant laws can also be enacted to protect personal wealth more intensively.
Summary: There are many ways to improve society, mainly whether the upper class wants to get it or not, and think of the question of whether they dare to do it. After all, any policy will harm the rights and interests of some people. And the more stimulating the measure, the greater the damage to the interests of the person.