Bankers are considering ‘dropping money from the sky’ to prop up the economy

Jeremy Corbyn has also advocated a ‘people’s quantitative easing’ which has some similarities to helicopter money

A daring new approach to solving the economic slump that has taken hold in Europe is gaining popularity in official circles.
Helicopter money refers to money figuratively “dropped from the sky”, or freshly created cash used to fund infrastructure projects or put directly into the hands of citizens.

Rather than being thrown from the sky, helicopter money might mean every UK citizen being credited with, say, £500 from the central bank straight into their current account.

Or government spending on new roads and railways financed by bonds that are then immediately bought by the central bank with newly created money and held until maturity.

Lord Adair Turner, former chairman of the UK finance regulator the Financial Services Authority, has urged serious consideration of helicopter money to rebalance growth in stuttering and highly indebted economies around the world.

“We are in such a deep deflationary trap that we should consider what Milton Friedman called helicopter money,” Lord Turner said at a conference on Transforming Finance in London on 11 May.

Jeremy Corbyn has also advocated a “people’s quantitative easing” which has some similarities to helicopter money.
And the idea seems to be gaining traction among some central bankers. In March, Mario Draghi, the president of the European Central Bank, described helicopter money as a “very interesting concept”.

The name comes from Milton Friedman, Margaret Thatcher’s favourite free-market economist. His 1969 idea was that central bankers could never fail to keep the money supply growing healthily since they could always drop freshly printed bills from a helicopter onto the cash-starved economy below.

This gets around the usual drawback of quantitative easing through the central bank buying up government debt. This can often end up raising the price of assets such as the government bonds. But it doesn’t necessarily mean consumers have more money to spend.

Studies have shown that creating brand new money by using helicopter money has a limited effect on inflation when the economy is already verging on deflation.

It also means the new money created can be more evenly distributed than in conventional quantitative easing and doesn’t simply benefit the rich who have lots of assets already.

Some officials might be coming round to the idea because many major economies are still struggling to return to growth eight years after the global financial crisis.

But economists have argued that helicopter money should be considered as part of a bigger plan to revive the economy, rather than an outright solution in itself.

“This should not be considered as a crazy idea but nor should it be considered as a panacea,” Lord Adair said. 
“We probably need it as part of the total toolkit. Once it is in the toolkit we need to use it with care, but we should not treat it as something unacceptable.”

http://www.independent.co.uk/news/business/news/helicopter-money-adair-turner-recession-interest-rates-draghi-osborne-economy-a7027621.html




Back in January a new Labour Economics Team was announced and they have been spending time over the country looking into new ideas from as many people as possible.

Famous economists Thomas Piketty, David Blanchflower and Ann Pettifor are among the names to have joined Labour’s Economic Advisory Committee, the party have today revealed.

The group will be convened by Shadow Chancellor John McDonnell and will report to leader Jeremy Corbyn. They will meet four times a year to discuss ideas to be fed into Labour’s official economic strategy. The committee will be made up of:

·  Mariana Mazzucato, Professor, University of Sussex

· Joseph Stiglitz, Professor, Columbia University, recipient of the 2001 Nobel Memorial Prize in economics.

· Thomas Piketty, Professor, Paris School of Economics

· Anastasia Nesvetailova, Professor, City University London

· Danny Blanchflower, Bruce V, Rauner Professor of Economics Dartmouth and Stirling, Ex-member of the MPC

· Ann Pettifor, Director of Policy Research in Macroeconomics (PRIME), and an Honorary Research Fellow at the Political Economy Research Centre of City University

French economist Piketty shot to fame last year when his book, Capital in the Twenty-First Century, became an unexpected international bestseller. Pettifor has worked as an adviser to Ken Livingstone and Margaret Beckett, and has published nine book on economic matters, while Blanchflower served on the Bank of England’s Monetary Policy Committee and has written extensively for The Guardian.

Corbyn announced the news with a statement saying:

“I was elected on a clear mandate to oppose austerity and to set out an economic strategy based on investment in skills, jobs and infrastructure. Our economy must deliver security for all, not just riches for a few.

Shadow Chancellor John McDonnell  he was “delighted” with the committee and was looking to develop “a radical but pragmatic and deliverable economic policy for our country.” He added: “Austerity is failing the people of this country. Working alongside world leading economists Labour will present the coherent alternative our country desperately needs.”

Thomas Piketty said that the committee is a “brilliant opportunity for the Labour Party to construct a fresh and new political economy which will expose austerity for the failure it has been in the UK and Europe.”

http://labourlist.org/2015/09/corbyn-reveals-big-names-in-new-economic-advisory-committee/

Well, GWB used something very similar and bribed/paid/gave away all of the budget surplus that he was handed - when the democrats left office.
I especially enjoyed the editorial writer >

How the Clinton Surplus Led to the Bush Tax Cuts
(Or, the Real Story You May Not be Hearing About the Fiscal Cliff)
12/10/2012 06:15 pm ET | Updated Feb 09, 2013
When I looked into this what I found was that these tax cuts came into being because of the “Clinton Surplus.” When Bill Clinton left office he left a federal budget surplus. The budget office projected a surplus for years to come given the tax rates at that time. There was much debate about what to do with the surplus in the 2000 election including making Social Security more secure, a suggestion made by Al Gore. But when George Bush won the election in 2000, returning the surplus to the electorate was his wish.
In his first State of the Union Address on Jan. 27, 2001, the newly elected President George Bush put forth his argument on what to do with the surplus:

I hope you will join me in standing firmly on the side of the people. You see, the growing surplus exists because taxes are too high and government is charging more than it needs. The people of America have been overcharged and, on their behalf, I am here asking for a refund.

Clearly stated, the people were overcharged, the government has more money than it needs and they should get the money back. This put the ball in motion to make way for the Bush Tax Cuts, which were voted on in June 2001 with the idea that they would expire in 2011. Let me just state this again — these were meant to expire, this was written into the piece of legislation. These were meant to be temporary because no one could see into the future to see if the tax cuts made sense 10 years hence.
http://www.huffingtonpost.com/anne-phillips/fiscal-cliff-bush-tax-cuts_b_2234324.html

So perhaps my connection of dots is a streeeetch of the {my} imagination; the reality is...that while the middle class over here is getting rubbed out of existence and the bankers {upper echelon/Bush Tax Cut recipients} become wealthier...I would hope that they have the KA-HOONA's to kick in a few hundred thousands of bucks each and donate to such a cause! My dream of utopia

Is this where the funds would be coming from for the hard working financially strapped British?