Money for nothing, for everyone: This is supposedly the next stage of the treatment program for today’s debt-addicted economic system. Milton Friedman’s hypothetical scenario of giving every citizen direct money transfers in a desperate bid to stoke inflation is gaining traction with growing legions of mainstream economists.
In their theory-addled brains, a massive one-off injection of central bank-conjured money into people’s bank accounts would do wonders for the real economy — in particular a terminally stagnating one like Europe’s. Rather than creating asset price inflation, as QE has done, it would fuel consumer price inflation. This is seen as the solution to the recently created and now unpayable mountain of debt: the central bank would simply erode it away via inflation.
In April, however, the ECB dashed such hopes, at least for the immediate future. “It’s not on the table,” ECB Executive Board member Peter Praet told a bunch of economists who’d been pushing for an answer at a conference organized by the Center for Financial Studies in Frankfurt.
That’s not to say that the ECB is opposed on principle to the idea of showering people with money they’ve done nothing to earn. It just depends what kind of people…
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