CFR Proposes Household Bailouts

Did you get your bailout check? Well there may be one in your mailbox soon if the Council on Foreign Relations gets their way. The influential group, proposed an unusual way to stimulate the economy in an article titled “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People.”

Japan experienced a post-war boom that was described by some economists as a miracle. Between the five years between 1986 and 1991, the nation’s economy grew by almost one trillion dollars. The bubble burst in the early nineties, and public spending slowed until the national economy started shrinking.

In 1998, then future chairman of the Federal Reserve Ben Bernake suggested a means for the Japan to recover from its economic crash. by ending cash to Japanese households. The idea intended to drive up spending and demand. The government in Tokyo never adopted such a policy, and the economy there continues to stagnate.

The latest motion to provide cash payments directly to individuals was written by Mark Blyth and Eric Lonergan.

They wrote, “Central banks are now trying to run twenty-first-century economies with a set of policy tools invented over a century ago. By relying too heavily on those tactics, they have ended up embracing policies with perverse consequences and poor payoffs.”

Cash transfers from government to the public have been tried in the past. Milton Friedman, well known as a conservative economist, compared the idea to dropping cash from a helicopter. John Maynard Keynes, an economist from the early 20th Century, proposed burying cash in coal mines, in an effort to jump-start spending.

The Federal Reserve in the United States has attempted to stimulate demand for goods and services by lowering interest rates. These rates have been near zero for ye ars, without producing significant expansion of the economy.

So if you’re not concerned with inflation now, just wait until your bailout check arrives.