Helicopter money is a fraud. It will enrich a few at the expense of the many, goose financial markets for a while, and harm the economy. From Charles Hugh Smith at oftwominds.com:
Creating “free money” to support bloated bureaucracies and corrupt cartels only makes the underlying problems worse.
The mere mention of helicopter money has intoxicated global stock markets, which have soared on the rumor of Japanese helicopter money. But as I explained in Why Helicopter Money Won’t Push Stocks Higher, central banks funding fiscal spending (i.e. helicopter money) will only have a weak and entirely indirect effect on profits or stock market valuations.
The problem with helicopter money is that it cannot fix what’s broken in the economy–and even worse, it perpetuates every inefficient, corrupt, bloated and unsustainable system in the status quo. As I explain in my book Why Our Status Quo Failed and Is Beyond Reform, the problem isn’t lack of fiscal spending or stimulus; the problem is the primary systems of the status quo have failed and cannot be fixed with central bank easy money.
In effect, helicopter money feeds the perverse incentives that have crippled our economy and society. Rather than be forced to choose priorities and rid centralized systems of wasteful corruption, bloat and graft that siphon off wealth and destroy productivity, helicopter money enables the continuation of all the inefficient, corrupt, bloated and unsustainable systems that make up the status quo.
No sacrifices are required by helicopter money: unlimited sums of freshly created money will be used to fund the same broken systems that have generated extremes of debt and wealth/income inequality.
The list of what won’t be fixed by helicopter money is long:
— The demographic time-bomb in pension plans, Medicare etc.: not fixed, just papered over.
— The higher education cartel’s out-of-control spending spree: not fixed, just papered over.
— The healthcare/sickcare cartel’s out-of-control spending spree: not fixed, just papered over.
— America’s declining health and runaway epidemics of “legal” drug addiction and metabolic syndrome diseases (diabesity): ignored, untouched.
— — The defense-industry cartel’s out-of-control spending spree: not fixed, just papered over.
I could go on and on, but you get the picture: funding broken, bloated, failed systems only perpetuates the rot at the heart of the nation’s economy, society and culture.
To continue reading: “Helicopter Money” Won’t Fix What’s Broken
Actually, Helicopter Money could be considered a start – if one holds the not indefensible view that the only way to fix what’s broken is to burn it to the ground and rebuild.