tag:blogger.com,1999:blog-5713178645208582139.post2735442778192286804..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Helicopter Drops As Insurance Against Central Bank Incompetence: A Reply to Scott SumnerDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-5713178645208582139.post-4953780008019945132014-04-29T21:38:54.670-05:002014-04-29T21:38:54.670-05:00This sounds like the Bush-Feldstein plan of 2008--...This sounds like the Bush-Feldstein plan of 2008--ie., fiscal stimulus. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-85328882295629726002013-08-31T16:53:09.004-05:002013-08-31T16:53:09.004-05:00David, a trillion dollar coin deposit at the fed w...David, a trillion dollar coin deposit at the fed would do it and the accounting would be consistent. The tax payers need income not money(debt) public or private. If we had a better distribution of income the velocity would be higher. The private sector is still deleveraging and they would use the money to pay down debt first, so a policy to provide a helicopter drop for debt repayment should Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-50501143697798950332013-08-15T21:20:24.578-05:002013-08-15T21:20:24.578-05:00David,
Given that "heli drops" might...David,<br /><br /><br />Given that "heli drops" might have a greater chance of success than asset purchases (possibly for political rather than economic reasons) then what would your views be on this proposal from Russ Abbott?<br /><br />http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1977688Rob Rawlingsnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-8957687383054362992013-08-13T15:49:40.532-05:002013-08-13T15:49:40.532-05:00I think Market Monetarists suggest that the Fed co...I think Market Monetarists suggest that the Fed could help by engaging in QE that results in a permanent monetary base. In think about this, I do see this as a possibility actually. Imagine a scenario where I issued a bond where the fed purchased it. The banking system would credit my bank account. The Fed would credit my bank’s reserve balance, and the fed would be holding my security as an Rafael Barbierihttps://www.blogger.com/profile/01578692617118123417noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42830972822970888432013-08-13T15:49:10.209-05:002013-08-13T15:49:10.209-05:00Mr. Beckworth,
I wrote this early. Would you li...Mr. Beckworth, <br /><br />I wrote this early. Would you like to critique this? My goal is to really understand the MM position. <br />-------------------------------------------<br />I think Market Monetarists suggest that the Fed could help by engaging in QE that results in a permanent monetary base. In think about this, I do see this as a possibility actually. Imagine a scenario where I Rafael Barbierihttps://www.blogger.com/profile/01578692617118123417noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-81000674481547048172013-08-09T10:52:58.595-05:002013-08-09T10:52:58.595-05:00JP,
It would be a permanent injection/withdrawal ...JP,<br /><br />It would be a permanent injection/withdrawal to the extent it kept NGDP on track. I haven't worked out the logistical details completely, but the Treasury has the infrastructure to reach tax payers and the Fed has the funding capacity. That is why I talked about using Treasury. The withdrawals would occur via Fed bills and notes, though Treasury could do it with its own David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-57239046964999767162013-08-09T10:01:37.367-05:002013-08-09T10:01:37.367-05:00David,
By helicopter drop do you mean a permanent...David,<br /><br />By helicopter drop do you mean a permanent gift to households, or a loan that households must ultimately pay back to the Treasury? According to your plan the Treasury gets funds from the Fed in order to execute the drops. Must the Treasury eventually pay the Fed back, or can we assume that the Fed's funding of Treasury-managed drops is permanent?JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-55519258619670574002013-08-09T00:12:03.179-05:002013-08-09T00:12:03.179-05:00I like this idea, if I understand it. You mean the...I like this idea, if I understand it. You mean the Fed prints up (digitizes) new money, and it is deposited directly into citizen bank accounts? In other words, the US Treasury first does not go out and borrow the money to be deposited into citizen accounts?<br /><br />Politically, I wonder if the above idea will fly.<br /><br />Now, think about lotteries. We just had a huge Powerball, and a lot Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-53194492472324696702013-08-07T15:12:28.147-05:002013-08-07T15:12:28.147-05:00I just don't see how Scott can extract himself...I just don't see how Scott can extract himself from the logical consequences of his constantly-repeated dicta, consequences that are perfectly explicated here.<br /><br />Scott: Fiscal policy works when the Fed is incompetent<br /><br />Scott: The Fed is incompetent<br /><br />Ergo: Fiscal policy works.Steve Rothhttps://www.blogger.com/profile/11895481216028771016noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-87367844981130651902013-08-06T23:22:47.498-05:002013-08-06T23:22:47.498-05:00Yes, central banks have no fiscal power. That only...Yes, central banks have no fiscal power. That only is in Treasury's hands thus the "helicopter drop" thesis has long been a myth. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-11084048409670444002013-08-06T18:50:42.821-05:002013-08-06T18:50:42.821-05:00This solves one of the key flaws of NGDP targeting...This solves one of the key flaws of NGDP targeting, the central bank's lack of fiscal power, by giving the central bank the ability to directly donate money to the population. Given the appointed rather than elected nature of the Fed it seems unlikely to happen, though. Why is "helicopter money" different from and better than having the government send out checks, as the Bush Tomnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-12613530212204499122013-08-06T16:54:45.332-05:002013-08-06T16:54:45.332-05:00if the solutions to an output gap is to simply pri...if the solutions to an output gap is to simply print money and never have a down cycle, why hasn't it been done already as it would clearly lead to prosperity to all those who go down this route?vegasellerhttps://www.blogger.com/profile/08350806107290264904noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-62717994661699922832013-08-06T13:21:41.902-05:002013-08-06T13:21:41.902-05:00Since I like the idea of a 'Citizens Income...Since I like the idea of a 'Citizens Income' to replace all welfare etc. transfers (aka Guaranteed Basic Income, and others) I call this direct helicopter drop a 'Citizens Bonus'.<br /><br />And I also like the idea of everyone having a 'government' bank account: risk-free, but zero yielding. Digital cash. In that world, all bank deposits are at risk. You want risk free? neil21http://twitter.com/neil21noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-92074572176575723122013-08-06T11:49:21.947-05:002013-08-06T11:49:21.947-05:00Since this is, at best, a workaround to the zero b...Since this is, at best, a workaround to the zero bound problem, a better idea is to get rid of the zero bound (or at least, make preparations so it can be removed on short notice).<br />Maxnoreply@blogger.com