• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Helicopter money is closer than you think

David_N

DP Veteran
Joined
Sep 26, 2015
Messages
6,562
Reaction score
2,769
Location
The United States
Gender
Male
Political Leaning
Liberal
It's going to happen once the world economy begins to go downhill once again. I'd say it's getting closer.
https://www.theguardian.com/busines.../07/helicopter-money-is-closer-than-you-think
Imagine that the world economy takes a turn for the worse and slips back into recession. Central banks double down on their quantitative easing programmes. That doesn’t boost growth or bring an end to deflation. They push interest rates deep into negative territory. That doesn’t work either.
At this point, politicians opt for the helicopter money approach. That’s where central banks print money so finance ministries can hand it out to citizens in the hope that they will spend the unexpected windfall.
Indeed, the Japanese government is toying with the idea of distributing shopping vouchers to all households, which they could use for child care or other spending.
 

joG

DP Veteran
Joined
Jul 27, 2013
Messages
43,839
Reaction score
9,638
Gender
Undisclosed
Political Leaning
Independent

Critter7r

DP Veteran
Joined
Aug 4, 2014
Messages
5,698
Reaction score
2,490
Location
Michigan
Gender
Male
Political Leaning
Centrist
I really think we may be proposing a solution in search of a problem.

Yes, growth is slow. Yes, the labor participation rate is down from its peak in the 90s. But is it really a recession? Or just a retreat from the credit-fuelled excesses of the past 20 years? Maybe this is what the economy looks like when the populace is being reasonably responsible with credit.

I would love to see higher wages. Incentives of some sort for corporations and even (or, better yet) small businesses to increase wages would be nice. And maybe some helicopter money while those incentives are being hashed out to get the ball rolling, but I don't think regular injections of helicopter money is any sort of a permanent solution.
 

MrWonka

DP Veteran
Joined
Mar 21, 2016
Messages
10,336
Reaction score
5,358
Location
Charleston, SC
Gender
Male
Political Leaning
Libertarian - Left
It's going to happen once the world economy begins to go downhill once again. I'd say it's getting closer.

I'm not sure the corporate interests who influence so many of these decisions would allow it to happen any time soon, but ultimately I think you're going to start hearing conversations about a universal minimum income. It's really quite inevitable as machines begin to do more and more of our jobs.
 

David G

Member
Joined
May 2, 2016
Messages
156
Reaction score
59
Location
Portland, OR
Gender
Male
Political Leaning
Slightly Liberal
In the case of a burst bubble threatening recession it makes sense to inject spending power in the pockets of the population.

That is best done from a position of low debt.

Yes, I would tend to agree... all else being equal. But, for one thing, we don't always get to choose our current position. But we do get to (must, actually) choose our next step.

The fascinating thing about economics is the complexity and the dynamic nature of the issues. I studied Economic History in grad school, and absolutely appreciate the role a historical perspective plays in formulating good policy. At the same time... there are no direct analogues. The old saw about 'history doesn't repeat itself, but it often rhymes' is still true.

That said, I believe that we're gonna be forced to address the topic somehow. The notions of negative interest rates, helicopter money, and/or guaranteed minimum income are not being discussed currently out of the blue. Now... none of those may end up being THE solution. Or maybe each of them will be PART of the solution. But I suspect the future will look more like Denmark than Rwanda. And if you have hope for the advancement of the species... I'd imagine you would prefer that.
 

Ntharotep

Well-known member
Joined
Dec 18, 2015
Messages
1,503
Reaction score
663
Location
Florida
Gender
Male
Political Leaning
Independent
Is the helicopter over my workplace as we speak?
I might have to leave early.
 

Ntharotep

Well-known member
Joined
Dec 18, 2015
Messages
1,503
Reaction score
663
Location
Florida
Gender
Male
Political Leaning
Independent
It's not literal. Think about a "voucher" for food and essentials.
Godammit! ;)

You'd know the answer to that... if you'd read the article in the OP.
Its called humor. Maybe not good humor but humor. And now I want ice cream for some reason.

So the $300 - $600 incentive that Bush and Obama gave us back in '08 was "helicopter money" if I'm getting the gist of things. Though that was more money literal.
I think the real issue with these kinds of "incentives" if that is even the right word is that by the time they happen its too little too late. If an economy is getting a little rocky but not already in the toilet then sure, it might help people spend money on other things when they don't have to worry about keeping their family fed for a bit. But when things are horrendous, any extra money is "catch up" money which doesn't really help anyone except utility companies and their ilk. Or, if there is extra money, it is being saved while families sit and wait to see which direction the economy is going to go in.

This is a tough one to poll to, because people will rarely say "free" stuff is bad if there is a chance they are the receivers of "free" stuff. Its like holding an ice cream cone up to a kid and saying "Would it be bad for me to give this to you?"

That's just my two Abrahams.
 

David_N

DP Veteran
Joined
Sep 26, 2015
Messages
6,562
Reaction score
2,769
Location
The United States
Gender
Male
Political Leaning
Liberal
Godammit! ;)


Its called humor. Maybe not good humor but humor. And now I want ice cream for some reason.

So the $300 - $600 incentive that Bush and Obama gave us back in '08 was "helicopter money" if I'm getting the gist of things. Though that was more money literal.
I think the real issue with these kinds of "incentives" if that is even the right word is that by the time they happen its too little too late. If an economy is getting a little rocky but not already in the toilet then sure, it might help people spend money on other things when they don't have to worry about keeping their family fed for a bit. But when things are horrendous, any extra money is "catch up" money which doesn't really help anyone except utility companies and their ilk. Or, if there is extra money, it is being saved while families sit and wait to see which direction the economy is going to go in.

This is a tough one to poll to, because people will rarely say "free" stuff is bad if there is a chance they are the receivers of "free" stuff. Its like holding an ice cream cone up to a kid and saying "Would it be bad for me to give this to you?"

That's just my two Abrahams.

Well, Ben Bernanke gives a good explanation.
Go here:
http://www.brookings.edu/blogs/ben-bernanke/posts/2016/04/11-helicopter-money
Well, countries do tend to respond to slow to downturns thanks to political bull****. Central banks are able to enact monetary policy, but we're in a trap of sorts, with low interest rates, excess reserves.. Theres nothing left except fiscal policy/"helicopter money." A fear of government debt has led to austerity during a time of slow growth/depressed demand. Is this the new normal? Only if we choose so. "Catch up money." All dollars spent help churn the economy, and people being able to pay bills gives them more dollars to spend on other things.
 

joG

DP Veteran
Joined
Jul 27, 2013
Messages
43,839
Reaction score
9,638
Gender
Undisclosed
Political Leaning
Independent
Yes, I would tend to agree... all else being equal. But, for one thing, we don't always get to choose our current position. But we do get to (must, actually) choose our next step.

The fascinating thing about economics is the complexity and the dynamic nature of the issues. I studied Economic History in grad school, and absolutely appreciate the role a historical perspective plays in formulating good policy. At the same time... there are no direct analogues. The old saw about 'history doesn't repeat itself, but it often rhymes' is still true.

That said, I believe that we're gonna be forced to address the topic somehow. The notions of negative interest rates, helicopter money, and/or guaranteed minimum income are not being discussed currently out of the blue. Now... none of those may end up being THE solution. Or maybe each of them will be PART of the solution. But I suspect the future will look more like Denmark than Rwanda. And if you have hope for the advancement of the species... I'd imagine you would prefer that.

True, except we did more or less choose our present position of debt.
 

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative

Fletch

DP Veteran
Joined
Feb 7, 2012
Messages
39,545
Reaction score
17,701
Location
Mentor Ohio
Gender
Male
Political Leaning
Libertarian

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative
Yes, I would tend to agree... all else being equal. But, for one thing, we don't always get to choose our current position. But we do get to (must, actually) choose our next step.

The fascinating thing about economics is the complexity and the dynamic nature of the issues. I studied Economic History in grad school, and absolutely appreciate the role a historical perspective plays in formulating good policy. At the same time... there are no direct analogues. The old saw about 'history doesn't repeat itself, but it often rhymes' is still true.

That said, I believe that we're gonna be forced to address the topic somehow. The notions of negative interest rates, helicopter money, and/or guaranteed minimum income are not being discussed currently out of the blue. Now... none of those may end up being THE solution. Or maybe each of them will be PART of the solution. But I suspect the future will look more like Denmark than Rwanda. And if you have hope for the advancement of the species... I'd imagine you would prefer that.

Thid topic has been addressed ad nausem

Nothing new about fiscal stimulus and its effectiveness as a strategy to grow market economies .

Japan tried it in the early 90's. Ten different stimulus packages totaling 100 Trillion Yen over 10 years with heavy investment on infrastructure.

Heavy public sector investment.

Yet more than 10 fiscal stimulus packages later and after new monetary initaives Japans GDP is the same now that it was in 1992

What do they have to show for that spending ( debt ) ? The largest debt to GDP ratio among developed Nations and increasing social welfare cost.

Japan stuck to the Keynesian play book to the letter instead of working on needed structural reforms and thats the problem with Fiscal stimulus.

It literally papers over the real issues that are dragging down the economy and have little if any long term impact on consumer confidence.

Investor's simply wait out the misallocation and bad investment Govts that push for stimulus are known for and eventually the money runs out

It is a shortsighted, myopic and foolish strategy pushed by ideologues.
 

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative
Wait. I thought Obama and Bernanke and the FED had solved all our economic problems. Now you say we are close to slip back into recession??

8 Trillion dollars in new spending later and David blames " Austerity "...

Lol !
 

David_N

DP Veteran
Joined
Sep 26, 2015
Messages
6,562
Reaction score
2,769
Location
The United States
Gender
Male
Political Leaning
Liberal
8 Trillion dollars in new spending later and David blames " Austerity "...

Lol !

Huh? I'm talking about other countries. Quit posting nonsense. Other posters have addressed your BS about Japan over and over again to no avail. Ever heard of a liquidity trap? An aging population? The highest savings rate I've seen? You don't even know how slowly they responded to the crisis, and it was slow.. But they'd be far worse off without the stimuluses.
 

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative
Huh? I'm talking about other countries. Quit posting nonsense. Other posters have addressed your BS about Japan over and over again to no avail. Ever heard of a liquidity trap? An aging population? The highest savings rate I've seen? You don't even know how slowly they responded to the crisis, and it was slow.. But they'd be far worse off without the stimuluses.

Yes, other posters have tried to address my comments about Japans failed stimulus to no avail

They're and you're still wrong. All those structural issues you just mentioned. Telll me, how does " fiscal stimulus " address any of them.

Oh, it would seem you've learned a new word

" Liquidity trap "...fancy term for describing a economy filled with consumers who despite being the recipeient of decades of " stimulus to increase aggregate demand " still lack the confidence to spend

Maybe MORE stimulus is will convince them to stop saving.....:roll:
 
Last edited:

JohnfrmClevelan

DP Veteran
Joined
May 12, 2014
Messages
6,345
Reaction score
4,054
Gender
Male
Political Leaning
Liberal
Yes, other posters have tried to address my comments about Japans failed stimulus to no avail

They're and you're still wrong. All those structural issues you just mentioned. Telll me, how does " fiscal stimulus " address any of them.

Oh, it would seem you've learned a new word

" Liquidity trap "...fancy term for describing a economy filled with consumers who despite being the recipeient of decades of " stimulus to increase aggregate demand " still lack the confidence to spend

Maybe MORE stimulus is will convince them to stop savings....:roll:

Why don't you explain how you would go about fixing these "structural issues" you keep talking about? Instead of, you know, just saying we have "structural issues" over and over and over and over....

(Don't forget to be specific.)
 

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative
Why don't you explain how you would go about fixing these "structural issues" you keep talking about? Instead of, you know, just saying we have "structural issues" over and over and over and over....

(Don't forget to be specific.)

Oh I don think you care one bit about what's dragging our economy down. But Ill play you game.

Big U.S. firms hold $2.1 trillion overseas to avoid taxes: study | Reuters

Corporations hoarding Trillions in offshore accounts means that money isn't being invested in the American economy where it can lead to new job creation. WHY are Corporations hoarding profits off-shore ? It's not because they're " greedy or mean " or even unpatriotic. They're obviously reacting to bad tax and regulatory policy

Obama's justification for raising Capital Gains tax to 24% ( because it was fair ) was the single stupidest thing I've heard him say since he stepped into office. He clearly cares more about staying loyal to his toxic ideology than helping Americans get back to work

A lack of Capital investment doesn't hurt the rich and it sure the hell doesn't fix disparity issues.It's a GLARING indicator of just how destructive tax policy can be to our Nations economy. Placing heavy tax burdens on savings and investment may sound like a good idea to the average Bernie Sanders supporter, but the reality is Investors and Corporations dont have to play along and the dont.

Incentivize new investment by dropping corporate tax rates down to zippo, scrap regulatory burdens and lower capital gains taxes ( even Clinton was smart enough to lower Capital Gains taxes ) and offer tax incentives for manufactures to either stay put ( NOT move to Mexico or relocate to the US )

Next..........

Healthcare legislation that will follow Obama well after he leaves office and tarnish what's left of his legacy, legislation that was SO BAD, SO UNPOPULAR that the Democrats had to pretend it didn't exist in 2014 for fear of losing their jobs needs to be scrapped altogether.

Seems like the Democrats would be all for scrapping ObamaCare. It cost them the Senate and the House and countless State and local elections. Instead of offering " affordable healthcare " under the pretense of a " Free Market solution " its led to increased out of pocket cost, increased deductibles and increased premiums for Middle class families and small and mid-sized businesses.

Beyond Anecdotes: Obamacare Will Hurt Employers and Employees | Free Enterprise

" According to the survey commissioned by the two groups and conducted by Public Opinion Strategies, 31% of franchise and 12% of non-franchise businesses report that they have already reduced worker hours because of the impending law, more than a full year before the employer mandate goes into effect."

"Additionally, 27% of franchise and 12% of non-franchise businesses report that they have already replaced full-time workers with part-time employees because of the law."

The Rich can afford these increases and the poor qualify for large subsidies but ObamaCare is stripping away more and more of the Middle Classes discretionary income year after year. Even small businesses are seeing exponential premiums increases some of which are being passed on to their employees who now have less to spend on other things like food, cars, gas , furniture, etc.

Your solution to all of this is to let the Govt pick up the slack left by a lack of private sector investment and the impact of bad tax, regulatory and legislative burdens.

But stimulus backed by bond purchases in a stagnate economy funnels Capital from the private sector to the public sector. Govt's that advocate Fiscal stimulus invest in pet projects like Obama's Green Jobs initiative where Billions of dollars disappeared and all the American tax payer got for their investment were 5th amendment pleas from chrony capitalist and stimulus doesn't address why investors and or Corporations and Businesses aren't risking their capital in the first place

Public sector spending isn't centered around profit or wealth creation or a decent return on Capital. It's a ideological solution that leads to more debt and stagnation.
 

DA60

Banned
DP Veteran
Joined
Jan 28, 2012
Messages
16,386
Reaction score
7,793
Location
Where I am now
Gender
Male
Political Leaning
Independent
Huh? I'm talking about other countries. Quit posting nonsense. Other posters have addressed your BS about Japan over and over again to no avail. Ever heard of a liquidity trap? An aging population? The highest savings rate I've seen? You don't even know how slowly they responded to the crisis, and it was slow.. But they'd be far worse off without the stimuluses.

And why don't you quit bossing people around?

If he wants to post something - as long as the mods are okay with it - he can.

If you don't like it, don't read it.

But bossing people around will get you nowhere other than making you look insecure and overbearing.
 

JohnfrmClevelan

DP Veteran
Joined
May 12, 2014
Messages
6,345
Reaction score
4,054
Gender
Male
Political Leaning
Liberal
Oh I don think you care one bit about what's dragging our economy down. But Ill play you game.

Big U.S. firms hold $2.1 trillion overseas to avoid taxes: study | Reuters

Corporations hoarding Trillions in offshore accounts means that money isn't being invested in the American economy where it can lead to new job creation. WHY are Corporations hoarding profits off-shore ? It's not because they're " greedy or mean " or even unpatriotic. They're obviously reacting to bad tax and regulatory policy

Those corporations are just sheltering their profits from tax, and that's all that your article said. Businesses don't get taxed on investment; in fact, investment is a way to lower your taxes. They aren't investing because the demand isn't there to justify more investment.

So you can blather on all you want about the lack of business investment, but you have your reasoning completely ass-backwards. Which is typical for supply-siders.
 

Fenton

DP Veteran
Joined
Nov 17, 2012
Messages
29,771
Reaction score
12,231
Gender
Male
Political Leaning
Conservative
Those corporations are just sheltering their profits from tax, and that's all that your article said. Businesses don't get taxed on investment; in fact, investment is a way to lower your taxes. They aren't investing because the demand isn't there to justify more investment.

So you can blather on all you want about the lack of business investment, but you have your reasoning completely ass-backwards. Which is typical for supply-siders.

Yes, they're sheltering their profit's from tax, when have US Corporations ever stashed this much capital offshore ?

They're reacting to bad policy implemented by the demand siders in the Obama administration. The same people that came up with Cash for Clunkers and Stimulus, the same people that decided a Capital gains taxe increase was a good idea.

And no Corporations are not waiting for the demand fairy to show up before they'll invest those profits back into their economy and back into their business

If that were the case private sector investment or the lack of would be the same no matter what part of the Country you lived in.

Its not. There are huge undeniable distinctions when it comes to private sector investment on a State level.

Whats backwards is implementing demand side initiatives in a economy thats dependent on private sector investment.

You see wealth and capital stagnating at the top and then blame supply side economics when in fact demand side initaives are to blame.

We've had 8 years of unprecedented deficit spending and Monetary stimulus and what has it accomplished ?

Nothing good.

Japans been trying it since the early 90s and their NIKKEI is half of what it was in 1996 and their GDP is nearly the same.

As for reasons why we're still struggling after 8 years of massive spending and monetary stimulus the best demand siders can do is to either blame Bush, blame the GOP for their supposed unprecedented obstructionism, but thats a ridiculous excuse

All Presidents have had to work with oppositional Congresses. Reagan, Bush, Clinton had to work with Newt Gingrich of all people, but he did.

Another excuse is the claim that the fallout from the 2008 Financial crisis was far greater than anyone knew.

That we need to double down on the same policies that have chased investment Capital offshore and that have led to anemic GDP growth quarter after quarter after quarter
 

JohnfrmClevelan

DP Veteran
Joined
May 12, 2014
Messages
6,345
Reaction score
4,054
Gender
Male
Political Leaning
Liberal
Yes, they're sheltering their profit's from tax, when have US Corporations ever stashed this much capital offshore ?

They're reacting to bad policy implemented by the demand siders in the Obama administration. The same people that came up with Cash for Clunkers and Stimulus, the same people that decided a Capital gains taxe increase was a good idea.

And no Corporations are not waiting for the demand fairy to show up before they'll invest those profits back into their economy and back into their business

If that were the case private sector investment or the lack of would be the same no matter what part of the Country you lived in.

Its not. There are huge undeniable distinctions when it comes to private sector investment on a State level.

Whats backwards is implementing demand side initiatives in a economy thats dependent on private sector investment.

You see wealth and capital stagnating at the top and then blame supply side economics when in fact demand side initaives are to blame.

We've had 8 years of unprecedented deficit spending and Monetary stimulus and what has it accomplished ?

Nothing good.

Japans been trying it since the early 90s and their NIKKEI is half of what it was in 1996 and their GDP is nearly the same.

As for reasons why we're still struggling after 8 years of massive spending and monetary stimulus the best demand siders can do is to either blame Bush, blame the GOP for their supposed unprecedented obstructionism, but thats a ridiculous excuse

All Presidents have had to work with oppositional Congresses. Reagan, Bush, Clinton had to work with Newt Gingrich of all people, but he did.

Another excuse is the claim that the fallout from the 2008 Financial crisis was far greater than anyone knew.

That we need to double down on the same policies that have chased investment Capital offshore and that have led to anemic GDP growth quarter after quarter after quarter

If it's tax that they want to avoid, they could invest all of that offshore money, which would lower their taxes on it to zero. And if supply-siders were correct, this would already be happening, because, hey, investment brings in the bucks! But it's not, because companies aren't stupid enough to invest real money without the likelihood of sufficient demand in return. Demand is a solid thing - dollars ready to be spent. There is nothing "fairy" or magical about it. What is imaginary is your belief that the dollars that all companies chase just appear out of nowhere, just because the company puts a product on the shelf.

You keep on saying that we have had 8 years of unprecedented stimulus spending, but that is far from the truth. You don't seem to comprehend what "stimulus" actually means, because very little government spending has been used to increase demand. We lost so incredibly much demand in 2008 that the sub-trillion that was actually spent into the economy wasn't nearly enough to make up for lost consumer spending and business investment. And it was short-lived. Deficit spending has been way too low ever since.
 

Critter7r

DP Veteran
Joined
Aug 4, 2014
Messages
5,698
Reaction score
2,490
Location
Michigan
Gender
Male
Political Leaning
Centrist
... Whats backwards is implementing demand side initiatives in a economy thats dependent on private sector investment.

....

And private sector investment dependent upon a reasonable certainty that their investment will provide a return which is dependent on people spending money to buy the product or service in which the investment was made. Also known as "demand".
 
Top Bottom