THE LATEST IN GOVERNMENT “STIMULUS …”
By ROBERT ROMANO || Pulling a modern day Marie “Let Them Eat Cake” Antoinette, Brown University professor Mark Blyth and hedge fund manager Eric Lonergan boldly propose to do what no central bank has done before: Just print money and give it to people.
Seriously. You can’t make this stuff up.
Writing in Foreign Affairs in an article sub-titled, “Why central banks should give money directly to the people,” Blyth and Lonergan marvel how traditional approaches to monetary policy designed to boost lending and credit creation — and thus spending and aggregate demand — have led to boom-to-bust cycles of asset price distortions followed by crashes.
In the process, economic growth was harmed, unemployment rose, and after the crash, a true recovery has appeared distant.
That part is all true. The modern financial economy has a fundamental flaw in that it relies too much on new debt to spur growth, as opposed to real production and innovation.
Yet. Blyth and Lonergan’s ambitious plan — “cash transfers could jump-start the economy” — printing hundreds of billions or even trillions of dollars is not the solution.
They would also print about 20 percent of the Gross Domestic Product — about $3.5 trillion — and put it in the stock market, benefitting Wall Street with yet another corporate handout. And then after 15 years, it would pay out to the people.
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Robert Romano is the Senior Editor of Americans for Limited Government.
2 comments
Seriously, it would have been far more fair and stimulating to take all of the money gov’t spent on wars and TBTF banks in the last 10 years and simply cut everyone a $100,000 check. (and far cheaper too)
Google “Helicopter money”