Reply #15: It hasn't been inflationary so far.

[girl gone mad]

Both Bush and Obama pushed money gifts or "helicopter money" drops via tax rebate checks and tax cuts. Interestingly, the Obama administration seems to have concluded that the Bush money drop was unsuccessful because the checks were given in one lump sum, therefore failed to create any sustained demand. Thus, Obama's economic advisers devised a tax cut that resulted in bigger paychecks throughout the year.

In my view, both money drops failed for reasons that Hyman Minsky understood well. We were faced with a solvency crisis, not the less serious liquidity crisis that the policy architects were attempting to address. More importantly, debt deflation, de-leveraging and repudiation were and are the prevailing economic forces. The neoclassical model is broken, but it appears that Washington never got the memo.