To Fix The Economy, Let's Print Money & Mail It To Everyone [View all]

[big_dog]

For the past six years, the Federal Reserve has been trying very hard to get Americans to spend more. First, it cut interest rates so borrowing was easier. When rates got as low as they could go, it tried to pump money into the economy by buying up tons of bonds from people. So far they've bought trillions worth of US Treasury bonds and mortgage-backed securities. And while there's evidence this has all helped the economy grow, the course the Fed chose clearly hasn't been sufficient for a rapid, sustained recovery.

So Brown political economist Mark Blyth and hedge fund manager Eric Lonergan are proposing another way to go about things in the latest issue of Foreign Affairs.http://www.foreignaffairs.com/articles/141847/mark-blyth-and-eric-lonergan/print-less-but-transfer-more The problem is that people aren't spending enough. So why not just have the Fed give people money to spend? Blyth and Lonergan would take the money being used to buy bonds and use it instead to finance checks sent to every household. They'd either make grants of identical size to everybody, or, preferably, larger ones for people in the bottom 80 percent of the income distribution. "Targeting those who earn the least would have two primary benefits," they write. "For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality." The plan, they argue, would require much less money than quantitative easing does to be effective: "Print Less but Transfer More," as their Foreign Affairs headline has it. http://www.vox.com/2014/9/9/6122517/helicopter-drop-money-print-fed-blyth-lonergan