Dinkić to insist on unfreezing of salaries

It would be THE day not to see this Dinkić with his mini-van party anymore in Serbian politics.
Zoooo, needing some votes in pre-election time and then of course promising dangerous fairytales to the public: country is in the major economic downfall and he wants to increase the wages? And who and how pays the bill?

Not important Dinkić, hee? Just to get yourself on the power....it's a beautiful cake and easy to get hooked on, isn't it Dinkić?

The problem with simply increasing the salaries of people who still have work is that you can't be sure they'll spend it and drive up demand. When people get scared, they hold onto whatever money they can, and either save it or pay down debt (which is what is happening in the U.S.). And since so many people have loans in euros, much of the money may simply leave the country anyway. Or they may spend the money on imported goods, or their summer vacations, which does nothing to increase jobs in Serbia. (Although Greece might be grateful.)

I'm assuming that these are government jobs he's talking about, and giving bureaucrats more money will not lead to an increase in goods produced, meaning more money (in their pockets) chasing a fixed or declining amount of goods - a perfect recipe for driving up inflation.

If he thinks there will be more money available to the government for financial measures, it'd be better to put it into encouraging employers by placing orders with them so they either hire more people or at least hold off on firing. Even people who have jobs are currently worried about unemployment, so seeing the numbers go down would have a beneficial effect on the entire country's mood and self-confidence, which might encourage people who do have money - and no matter how bad things get, there are always some - to spend it.

Monopolies don't aggravate the problem in the slightest, of course.

It would be THE day not to see this Dinkić with his mini-van party anymore in Serbian politics.
Zoooo, needing some votes in pre-election time and then of course promising dangerous fairytales to the public: country is in the major economic downfall and he wants to increase the wages? And who and how pays the bill?

Not important Dinkić, hee? Just to get yourself on the power....it's a beautiful cake and easy to get hooked on, isn't it Dinkić?

The problem with simply increasing the salaries of people who still have work is that you can't be sure they'll spend it and drive up demand. When people get scared, they hold onto whatever money they can, and either save it or pay down debt (which is what is happening in the U.S.). And since so many people have loans in euros, much of the money may simply leave the country anyway. Or they may spend the money on imported goods, or their summer vacations, which does nothing to increase jobs in Serbia. (Although Greece might be grateful.)

I'm assuming that these are government jobs he's talking about, and giving bureaucrats more money will not lead to an increase in goods produced, meaning more money (in their pockets) chasing a fixed or declining amount of goods - a perfect recipe for driving up inflation.

If he thinks there will be more money available to the government for financial measures, it'd be better to put it into encouraging employers by placing orders with them so they either hire more people or at least hold off on firing. Even people who have jobs are currently worried about unemployment, so seeing the numbers go down would have a beneficial effect on the entire country's mood and self-confidence, which might encourage people who do have money - and no matter how bad things get, there are always some - to spend it.

Monopolies don't aggravate the problem in the slightest, of course.