You can always count on Americans to do the right thing, after they’ve tried everything else.- Winston Churchill
: When an article appears in Foreign Affairs,
the mouthpiece of the policy-setting Council on Foreign Relations,
recommending that the Federal Reserve do a money drop directly on the
99%, you know the central bank must be down to its last bullet.
The September/October issue of Foreign Affairs features an article by Mark Blyth and Eric Lonergan titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.”
It’s the sort of thing normally heard only from money reformers and
Social Credit enthusiasts far from the mainstream. What’s going on?
The Fed, it seems, has finally run out of other ammo. It has to taper its quantitative easing program, which is eating up the Treasuries and mortgage-backed securities needed as collateral for the repo market
that is the engine of the bankers’ shell game. The Fed’s Zero Interest
Rate Policy (ZIRP) has also done serious collateral damage. The banks
that get the money just put it in interest-bearing Federal Reserve
accounts or buy foreign debt or speculate with it; and the profits go
back to the 1%, who park it offshore to avoid taxes. Worse, any increase
in the money supply from increased borrowing increases the overall debt
burden and compounding finance costs, which are already a major
constraint on economic growth.
Meanwhile, the economy
continues to teeter on the edge of deflation. The Fed needs to pump up
the money supply and stimulate demand in some other way. All else having
failed, it is reduced to trying what money reformers have been
advocating for decades — get money into the pockets of the people who
actually spend it on goods and services.
A Helicopter Drop on Main Street
