The helicopter money debate has taken off with Adair Turner giving a lecture saying the idea is not beyond the pale and that monetary financing of the fiscal deficit has to be on the agenda. Martin Wolf says if not now when?
Hawks complain about the inflation genie, the cost to savers and the frugal, the danger of stoking another asset bubble and the likelihood of responsive competitive devaluations by other nations. All of which I find entirely convincing. This is not a normal back to business recession but a huge reset and structural transformation. Sure we need to ease the pain – but not at the expense of somehow dealing with the reality. Thankfully the FT takes this line too, questioning whether the policy could be successful in a UK which is a) more exposed to capital flows (translation = the money will be quickly offshored or the currency will collapse) and b) has economic problems that are more to do with the supply than demand side. Fiscal monetary policy is but a side show.