Adair Turner, an academic, policymaker, and member of the House of Lords, in his new book, “Between Debt and the Devil: Money, Credit, and Fixing Global Finance”, argues that countries facing the predicament of onerous debts, low interest rates, and slow growth should consider a radical but alluringly simple option: create more money and hand it out to people. “A government could, for instance, pay $1000 to all citizens by electronic transfer to their commercial bank deposit accounts,” Turner writes. People could spend the money as they saw fit: on food, clothes, household goods, vacations, drinking binges—anything they liked. Demand across the economy would get a boost, Turner notes, “and the extent of that stimulus would be broadly proportional to the value of new money created.”The figure of a thousand dollars is meant to be strictly illustrative. It could just as easily be five thousand dollars or ten thousand dollars — however much was needed to drag the economy out of the doldrums. The funding would come from the central bank, the Federal Reserve, which would exploit its legal right to create money. Central banks do this by printing notes and manufacturing coins, but they can also create money by issuing electronic credits to commercial banks, such as JP Morgan and Citibank. Under Turner’s proposal, that’s what the Fed would do—give banks newly created money, which would be passed along to their account holders. Merry Christmas, everyone!It’s a deadly serious proposal, actually, and its author is a sixty-year-old English technocrat renowned for his intellect and his independence. If, despite Turner’s impressive credentials, the words “hyperinflation,” “Weimar Republic,” and “Robert Mugabe’s Zimbabwe” are whirling around in your head, he would certainly understand. “My proposals will horrify many economists and policymakers, and in particular central bankers,” he writes. “‘Printing money’ to finance public deficits is a taboo policy. It has indeed almost the status of a mortal sin.”But it’s also a proposal that serious economists have broached before. In 1969, Milton Friedman argued that money financing could provide an alternative to Keynesian debt financing. Faced with a chronic shortfall of demand in the economy, Friedman said, the government could print a bunch of money and drop it from helicopters. In 2003, Ben Bernanke, who was then a governor at the Fed, suggested that such “helicopter drops,” or their electronic equivalent, could provide the Japanese government with a way to lift its economy out of a decade-long slump. In Britain, Jeremy Corbyn, the leader of the Labour Party, had suggested that the Bank of England could pay for some infrastructure spending by printing money.So far, these ideas have gained little traction. Bernanke, after taking over the Fed, in 2006, seldom mentioned his earlier proposal. Even Paul Krugman, who is usually a big supporter of stimulus programs, has distanced himself from Modern Monetary Theory, pointing to the danger of inflation from excessive monetary growth. Turner, however, insists that creating money may be the only way of generating a decent rate of economic growth and escaping the current predicament.
Question
Adair Turner, an academic, policymaker, and member of the House of Lords, in his new book, “Between Debt and the Devil: Money, Credit, and Fixing Global Finance”, argues that countries facing the predicament of onerous debts, low interest rates, and slow growth should consider a radical but alluringly simple option: create more money and hand it out to people. “A government could, for instance, pay $1000 to all citizens by electronic transfer to their commercial bank deposit accounts,” Turner writes. People could spend the money as they saw fit: on food, clothes, household goods, vacations, drinking binges—anything they liked. Demand across the economy would get a boost, Turner notes, “and the extent of that stimulus would be broadly proportional to the value of new money created.”The figure of a thousand dollars is meant to be strictly illustrative. It could just as easily be five thousand dollars or ten thousand dollars — however much was needed to drag the economy out of the doldrums. The funding would come from the central bank, the Federal Reserve, which would exploit its legal right to create money. Central banks do this by printing notes and manufacturing coins, but they can also create money by issuing electronic credits to commercial banks, such as JP Morgan and Citibank. Under Turner’s proposal, that’s what the Fed would do—give banks newly created money, which would be passed along to their account holders. Merry Christmas, everyone!It’s a deadly serious proposal, actually, and its author is a sixty-year-old English technocrat renowned for his intellect and his independence. If, despite Turner’s impressive credentials, the words “hyperinflation,” “Weimar Republic,” and “Robert Mugabe’s Zimbabwe” are whirling around in your head, he would certainly understand. “My proposals will horrify many economists and policymakers, and in particular central bankers,” he writes. “‘Printing money’ to finance public deficits is a taboo policy. It has indeed almost the status of a mortal sin.”But it’s also a proposal that serious economists have broached before. In 1969, Milton Friedman argued that money financing could provide an alternative to Keynesian debt financing. Faced with a chronic shortfall of demand in the economy, Friedman said, the government could print a bunch of money and drop it from helicopters. In 2003, Ben Bernanke, who was then a governor at the Fed, suggested that such “helicopter drops,” or their electronic equivalent, could provide the Japanese government with a way to lift its economy out of a decade-long slump. In Britain, Jeremy Corbyn, the leader of the Labour Party, had suggested that the Bank of England could pay for some infrastructure spending by printing money.So far, these ideas have gained little traction. Bernanke, after taking over the Fed, in 2006, seldom mentioned his earlier proposal. Even Paul Krugman, who is usually a big supporter of stimulus programs, has distanced himself from Modern Monetary Theory, pointing to the danger of inflation from excessive monetary growth. Turner, however, insists that creating money may be the only way of generating a decent rate of economic growth and escaping the current predicament.
Solution 1
Adair Turner, un académico, político y miembro de la Cámara de los Lores, en su nuevo libro, "Between Debt and the Devil: Money, Credit, and Fixing Global Finance", argumenta que los países que enfrentan el predicamento de deudas onerosas, tasas de interés bajas y crecimiento lento deberían considerar una opción radical pero atractivamente simple: crear más dinero y distribuirlo a la gente. "Un gobierno podría, por ejemplo, pagar $1000 a todos los ciudadanos mediante transferencia electrónica a sus cuentas de depósito bancario comercial", escribe Turner. Las personas podrían gastar el dinero como quisieran: en comida, ropa, bienes para el hogar, vacaciones, borracheras, lo que quisieran. La demanda en toda la economía recibiría un impulso, señala Turner, "y la magnitud de ese estímulo sería proporcional al valor del nuevo dinero creado".
La cifra de mil dólares se supone que es estrictamente ilustrativa. Podría ser fácilmente cinco mil dólares o diez mil dólares, lo que fuera necesario para sacar a la economía de la depresión. La financiación vendría del banco central, la Reserva Federal, que explotaría su derecho legal de crear dinero. Los bancos centrales hacen esto imprimiendo billetes y acuñando monedas, pero también pueden crear dinero emitiendo créditos electrónicos a bancos comerciales, como JP Morgan y Citibank. Bajo la propuesta de Turner, eso es lo que haría la Fed: dar a los bancos dinero recién creado, que se pasaría a sus titulares de cuentas. ¡Feliz Navidad a todos!
Es una propuesta muy seria, en realidad, y su autor es un tecnócrata inglés de sesenta años famoso por su intelecto y su independencia. Si, a pesar de las impresionantes credenciales de Turner, las palabras "hiperinflación", "República de Weimar" y "Zimbabue de Robert Mugabe" están dando vueltas en tu cabeza, él ciertamente lo entendería. "Mis propuestas horrorizarán a muchos economistas y políticos, y en particular a los banqueros centrales", escribe. "Imprimir dinero" para financiar déficits públicos es una política tabú. De hecho, tiene casi el estatus de un pecado mortal".
Pero también es una propuesta que economistas serios han planteado antes. En 1969, Milton Friedman argumentó que la financiación monetaria podría proporcionar una alternativa a la financiación de la deuda keynesiana. Frente a un déficit crónico de demanda en la economía, dijo Friedman, el gobierno podría imprimir un montón de dinero y soltarlo desde helicópteros. En 2003, Ben Bernanke, que entonces era gobernador de la Fed, sugirió que tales "soltar desde helicópteros", o su equivalente electrónico, podrían proporcionar al gobierno japonés una forma de sacar a su economía de una década de estancamiento. En Gran Bretaña, Jeremy Corbyn, el líder del Partido Laborista, había sugerido que el Banco de Inglaterra podría pagar algunos gastos de infraestructura imprimiendo dinero.
Hasta ahora, estas ideas han tenido poco éxito. Bernanke, después de hacerse cargo de la Fed, en 2006, rara vez mencionó su propuesta anterior. Incluso Paul Krugman, que suele ser un gran defensor de los programas de estímulo, se ha distanciado de la Teoría Monetaria Moderna, señalando el peligro de la inflación por un crecimiento monetario excesivo. Sin embargo, Turner insiste en que la creación de dinero puede ser la única forma de generar una tasa de crecimiento económico decente y escapar del predicamento actual.
Solution 2
Adair Turner, un académico, político y miembro de la Cámara de los Lores, en su nuevo libro, "Between Debt and the Devil: Money, Credit, and Fixing Global Finance", argumenta que los países que enfrentan el predicamento de de
Solution 3
Adair Turner, un académico, político y miembro de la Cámara de los Lores, en su nuevo libro, "Between Debt and the Devil: Money, Credit, and Fixing Global Finance", argumenta que los países que enfrentan el predicamento de deudas onerosas, tasas de interés bajas y crecimiento lento deberían considerar una opción radical pero atractivamente simple: crear más dinero y distribuirlo a la gente. "Un gobierno podría, por ejemplo, pagar $1000 a todos los ciudadanos mediante transferencia electr
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