British economy: A radical proposal

Simon Jenkins is a columnist for The Guardian but he is hardly a left-winger. I place him on the iconoclastic right of the political spectrum. Dogma is not for him and it makes his opinions all the more entertaining, infuriating and interesting for that.

Anyway, this piece in today's Guardian posits an interesting way for Britain's economy to start growing again.

Jenkins advocates dropping new bank notes out of helicopters over Britain's shopping streets. People who find the notes are obliged to spend them immediately. The notes themselves will disintegrate in 6 months.

As I said, Jenkins is a conservative thinker but he reasons that given how much money the government has showered on the banks in recent years, money the banks have then refused to lend out, this might be the best way to get consumer spending going. 

Jenkins writes about helicopter money:

"Ministers pleaded with bankers to lend it on to firms in the high street, but the banks preferred to keep it for themselves, to cover their gambling debts and bonuses. Dropping the stuff from helicopters is more effective since it does what it says on the tin: it instantly unleashes demand. It is an emergency blood transfusion straight into the veins of the economy, through high-street tills, job recruitment, restocking, warehouses and order books. It does not pass through the constricted arteries of bank managers."

He even invokes the name of Milton Friedman as someone who would agree with him (you don't get more right-wing than that.)

It's a really interesting read.