In 1932 during the great depression, the mayor of the German town of Worgl had an idea to revive the fortunes of his town's flagging economy. He printed his own currency, equivalent to the Austian schilling in value and demanded that businesses in the town accept it as legal tender. The currency had a time based depreciation so that it would depreciate by 1% in value each month, this was designed to speed up the circulation of the currency. It's generally considered that currency played a massive role in reviving the economy.
The reason I'm bringing this up is that the speed of circulation of money is important in a functioning economy, our wages depend on a steady supply of customers willing to buy what we have to sell. Keynes argued that an economic stimulus would have a multiplier effect based on something called marginal propensity to consume (the proportion of income that is spent), for example lets assume the government gives away £1,000 and the marginal propensity to consume is 80%:
- Of that £1,000, 80% is spent so that means that £800 is spent
- Those who recieve the £800 of spending go on to spend 80% of it meaning that a £640 is spent.
- Those who recieve the £640 of spending go on to spend 80% of it meaning that a £512 is spent.
- And so on...
By taking it's lead from the Worgl Experiment and issuing a series of vouchers that could be accepted as legal tender up until a certain date when they will be redeemable for money by a retailer, the government could make a cash injection could be made into the economy that will be guaranteed to generate a stimulus with a multiplier effect and hopefully revive the fortunes of the flagging economy.