United States Considering Issuing “Helicopter Money”

The United States is officially looking at a proposal often referred to as “helicopter money.” In a press briefing today related to the effects of the coronavirus on the economy, Steve Mnuchin, the Director of the Treasury, stated that they are “looking at sending checks to American’s immediately.”

Frequently referred to as helicopter money within financial discussions, the concept, as per Wikipedia, is a “proposed unconventional monetary policy, sometimes suggested as an alternative to quantitative easing (QE) when the economy is in a liquidity trap (when interest rates near zero and the economy remains in recession).” The term was coined by economist Milton Friedman in the late 1960’s as being a policy similar to dropping money out of a helicopter to demonstrate monetary expansion.

In the latest scenario, Mnuchin today did not define a set amount of funds that would be issued to Americans, or whether it would be on an individual or per household basis. The measure was being considered as it has immediate affects on American households, versus that of a payroll tax holiday for which the effects would not be felt for six to eight months. In referencing the amount, Mnuchin indicated that they “may be a bit bigger than what’s [been indicated] in the press.”

The timeline for the proposed monetary policy was defined as being within the next two weeks.


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