Get ready folks, money from the sky is coming. Janet Yellen is warming up the chopper engines.
(From The Washington Free Beacon)
Yellen said that fiscal policy could be a very important tool in addressing weak growth or deflation.
“It’s natural that if it can be employed, that just as monetary policy is doing a lot to try to stimulate growth, that fiscal policy should play a role,” she said. “Normally you would hope in an economy with those severe downside risks monetary and fiscal policy would not be working at cross-purposes, but together.
“Now whether or not in such extreme circumstances there might be a case for let’s say close coordination with the central bank playing a role in financing fiscal policy this is something that academics are debating and it is something that one might legitimately consider.”
The article actually talks about Chair Yellen contemplating a modified version of “helicopter money.” Instead of just depositing money into bank accounts via various means (the usual definition of helicopter money policy) she appears to be hinting that the Fed should be open to working directly with the government on projects. Just print the money and there’s a new bridge, or statue, or pyramid.
This is very dangerous talk. What we need to do is lessen the power of the Federal Reserve not expand its power and influence. But the crony class isn’t keen on giving up power. They’d rather continue to “manage” us into the mire.