“Let’s Try Giving Out Free Cash”

 

Central bankers are desperate. Since their 2008 bust, they’ve been pedalling ever since to keep their phoney-baloney money-creation-balls in the air, and only the headline writers have been convinced their stimulunacy has done anything better than simply stave off the inevitable.

And now, with the central banks quietly creaking into “negative interest rate mode,” the signal of a virtual white flag for their failed economic theories, the only lever they have in their armoury left to pull is the simple one of printing money and giving it away.

As Justin Spittler from Casey Research explains: “ Central bankers are considering “helicopter money”

Economist Milton Friedman coined the term “helicopter money” in the 1960s. He said the government could drop free cash from helicopters to stimulate the economy. People would spend the free money, causing the economy to grow.
    Friedman likely never took the cartoonish idea seriously. For a long time, no one else did either. Until now…Former Fed chairman Ben Bernanke thinks it’s time for helicopter money…
    Bernanke ran the Fed from 2006 to 2014. He now works for the Brookings Institute, a government think tank. Last week, he said helicopter money could be worth a shot.
       [H]elicopter money could prove a valuable tool. In particular, it has the attractive feature that it should
        work even when more conventional monetary policies are ineffective and the initial level of government
         debt is high.
    Dropping cash from a helicopter is probably too extreme, even for a central banker like Bernanke. The government would likely give out free cash in other ways, like mailing checks to people, or depositing money directly into people’s bank accounts.
    Bernanke continued:
        Under certain extreme circumstances—sharply deficient aggregate demand, exhausted monetary policy,
        and unwillingness of the legislature to use debt-financed fiscal policies—such programs may be the best
        available alternative. It would be premature to rule them out.
 That’s bureaucrat-speak for, “nothing else has worked, so let’s try giving out free cash.”
It’s no surprise that Bernanke likes the idea…
    After all, the Fed first used the controversial policy of quantitative easing (QE) while Bernanke was in charge. That’s when a central bank creates money from nothing and pumps it into the financial system. It’s how the Fed has created 3.5 trillion new dollars since 2008.
    In 2002, Bernanke suggested in a speech that helicopter money could boost the economy. This earned him the nickname “Helicopter Ben.”
    Helicopter Ben is not the only bureaucrat to endorse the idea…
    In September, Mario Draghi said he would “certainly consider” helicopter money. Draghi runs the European Central Bank.
    Lots of Ivy League economists like the idea, too…
    Nouriel Roubini wrote a piece earlier this month for financial website MarketWatch titled “Central Bankers May Have to Fire up the Helicopters.” Roubini teaches at New York University. He’s one the world’s most influential economists.
    Richard Clarida, an economist at Columbia University, predicts we will see helicopter money within five years.
    Central bankers will do “whatever it takes” to “jumpstart” the economy...

Even if an economy is not actually able to be jumpstarted. Because as Hayek ably explains in response to the Friedmanian/Keynesian stupidity, an economy is not an “it” at all, it is us; it’s organic:

 

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