Bernanke's Helicopter Is Warming Up: Larry Summers - First Pilot

Submitted by Tyler Durden on 09/13/2013 - 16:17

"A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money ."

- Ben Bernanke, Deflation: Making Sure "It" Doesn't Happen Here, November 21, 2002