On Thursday, November 18, 2021 at 6:52:13 PM UTC-5, chromebook test wrote:
> Helicopter Money
> By Mark Gilbert August 30, 2019 <---------2 months before covid
https://web.archive.org/web/20190902000226/https://www.bloomberg.com/quicktake/helicopter-money
> Imagine waking one morning to find extra cash in your account, a gift from your country’s central bank. That might sound outlandish — even some proponents of the idea admit it’s unlikely. But the concept of so-called helicopter money has been seriously debated by economists for several years, and is coming back into vogue. That’s because despite the trillions of dollars, euros, yen and pounds that central banks have pumped into the global financial system since the 2008 credit crisis, global economic growth is slowing once again. Helicopter money handed directly to consumers
Milton Friedman came up with the concept of helicopter money in 1969. The Nobel Prize-winning economist envisaged a whirlybird flying over a community dropping paper money from the sky as a thought experiment to see what a never-to-be-repeated increase in the money supply would do to spending and saving. The idea was made famous by Ben Bernanke in 2002 when, as a Federal Reserve governor, he referred to it while arguing that a central bank can always stoke inflation if needed. The nickname “Helicopter Ben” stuck, even though the playbook Bernanke followed as Fed chairman during the recession that followed the financial crisis stopped short of printing money and handing it out to consumers. In an April 2016 blog post, however, Bernanke said helicopter money may be “the best available alternative” under some “extreme circumstances.” In today’s debates, it’s envisaged that helicopter money would be distributed either by crediting people's bank balances or as a tax rebate. The key is that it would come from a one-time creation of money by the central bank, rather than being borrowed by the government or coming out of existing spending.
The Argument
“Monetary policy is exhausted and fiscal policy alone is not enough,” is how three former central bankers — ex-Swiss central bank chief Philipp Hildebrand, former Federal Reserve and Bank of Israel staffer Stanley Fischer, and Jean Boivin, ex-deputy governor of the Bank of Canada — made the case in August. Central banks, the trio wrote in an article for their current employer, BlackRock Inc., need to put money “directly in the hands of public and private sector spenders,” though they advocated a more cautious approach than an unlimited helicopter program. Other supporters of helicopter money argue that it may be less risky than quantitative easing, which has been blamed for fueling what some see as a bubble in global stock and bond markets. It’s also possible its benefits would be spread more broadly. Opponents point out that helicopter money isn’t really free. Printing more money devalues the buying power of what savers have in their accounts, in the same way that a company selling new shares dilutes the holdings of its existing stockholders. Others say helicopter money is an overly complicated substitute for the fiscal stimulus governments should be providing. There’s also the danger that helicopter money could trigger much higher inflation than the 2% that’s currently deemed desirable, if people thought banks or governments might get addicted to its boost. And it might fail anyway: Given that nothing in economics is currently working out the way the textbooks promised, people might just save the windfall instead of spending it.