With Corbyn’s “People’s QE”, the Bank of England would print money via digital ledger entries, similar to traditional QE, to either directly buy HM Treasury’s debt issuance, or directly transfer money to Treasury to pay for government expenditure. (Adam Posen, who served on the Monetary Policy Committee of the Bank of England, once suggested something similar.)
Ben Bernanke’s essay on Milton Friedman’s “Helicopter Money” proposal explained how the Fed would print money to pay for increases in Federal expenditure, tax cuts, or purchases of private assets.
Both of these proposals could infringe on central banks’ hard-won monetary policy independence by turning them into on-demand cash machines for fiscal authorities, although both have the support of at least some central bankers. It would be difficult for monetary authorities to terminate debt-financed fiscal expansion after it was set in motion: social pressure would make an exit politically difficult, for opponents to debt monetization would be labeled as “opponents to making QE fair again”.
People’s QE, of which I was the originator, is alive and well and apparently has the support of some central bankers. Let them step forward please: we need them.
Note how he skips over the problem of reversibility, the very thing which dooms Peoples’ QE as against normal QE.
And, of course, if it’s the same as Friedman’s Helicopter Money then Ritchie didn’t invent it, did he?