Ben Bernanke Chairman of the US Federal Reserve, famously suggested dropping dollar bills from helicopters to help solve the economic downturn. The Citizens’ Income would actually be a sensible variation on that theme. I now have impressive confirmation of this.
Brown, Ellen, “Why QE3 Won’t Jump-Start the Economy—and What Would,” Web of Debt, September 21, 2012; reprinted by Truth Dig Sep 22, 2012.
After explaining in detail why quantitive easing – creating money and giving it to the banks – will not work as intended, she offers:
Some Possibilities That Might Be More Effective at Stimulating the Economy
An injection of money into the pockets of consumers would actually be good for the economy, but QE3 won’t do it. The Fed could give production and employment a bigger boost by using its lender-of-last-resort status in more direct ways than the current version of QE.
It could make the very-low-interest loans given to banks available to state and municipal governments, or to students, or to homeowners. It could rip up the $1.7 trillion in government securities that it already holds, lowering the national debt by that amount (as suggested a year ago by Ron Paul). Or it could buy up a trillion dollars’ worth of securitized student debt and rip those securities up. These moves might require some tweaking of the Federal Reserve Act, but Congress has done it before to serve the banks.
Another possibility would be the sort of “quantitative easing” first proposed by Ben Bernanke in 2002, before he was chairman of the Fed—just drop hundred dollar bills from helicopters. (This is roughly similar to the Social Credit solution proposed by C. H. Douglas in the 1920s.) As Martin Hutchinson observed in Money Morning:
With a U.S. population of 310 million, $31 billion per month, dropped from helicopters, would have given every American man, woman and child an extra crisp new $100 bill per month.
Yes, it would produce an extra $31 billion per month on the nominal Federal budget deficit, but the Fed would have printed the new bills, so there would have been no additional strain on the nation’s finances.
It would be much better than a new social program, because there would have been no bureaucracy involved, just bill printing and helicopter fuel.
The money would nearly all have been spent, increasing consumption by perhaps $300 billion annually, creating perhaps 3 million jobs, and reducing unemployment by almost 2%.
None of these moves would drive the economy into hyperinflation. According to the Fed’s figures, as of July 2010, the money supply was actually $4 trillion LESS than it was in 2008. That means that as of that date, $4 trillion more needed to be pumped into the money supply just to get the economy back to where it was before the banking crisis hit.
As the psychological boost from QE3 wears off and the “fiscal cliff” looms, perhaps Congress and the Fed will consider some of these more direct approaches to relieving the economy’s intractable doldrums.
Ellen Brown is an attorney and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org.
I have just submitted a motion to the Green Party conference in February urging the party to use ‘Dynamic Benefits’ as an important weapon in the fight against the government’s welfare proposals. Without that crucial evidence – provided by Ian Duncan Smith’s own Think Tank – much of the current efforts to resist consist of impotent rage.
Whilst the welfare benefits will obviously the main focus in the immediate future, it would be remiss not to remind people that scientists have pointed out that global warming does not just mean a bit more warmth. They said that more energy in the atmosphere would cause more frequent and more severe weather events. Already the crunch is coming via the insurance industry. Of course we are at the mercy of economic growth in China, but then again, that is dependent on s buying large quantities from them. A Citizens’ Income (or something which allows no growth to be acceptable) is beginning to look more urgent.