- Bloomberg.com – Jim Bianco: The Fed Has Given MMT Proponents Ample Ammunition
The idea that the government can print money to spark the economy is not that much different than quantitative easing – with one big exception.
If this sounds familiar, it should. MMT is basically a sibling of quantitative easing. While QE allowed the Fed to print money to buy securities such as U.S. Treasuries, mortgage bonds and bad loans, MMT proposes printing money to fund the government. The Fed has hailed QE as a success, bringing the economy back from the brink. Former Fed Chairman Ben S. Bernanke was even anointed as Time magazine’s “Person of the Year” for 2009. Vice Chairman Richard Clarida said last month the central bank would solicit opinions on how to round off the edges of its new tools such as QE. Simply put, these tools are here to stay.
- The Wall Street Journal – (November 15, 2010) Open Letter to Ben Bernanke
The following is the text of an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, along with investors and political strategists, most of them close to Republicans
We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.
- Bloomberg – (July 14, 2016) Bernanke Floated Japan Perpetual Debt Idea to Abe Aide Honda
Prominent foreign economists drawn into nation’s policy making
Honda emerges as an ideas matchmaker for the prime minister
Bernanke at the Tuesday meeting said Japan should carry on with Abenomics policies by supplementing monetary policy with fiscal stimulus, according to Hamada. Bernanke told Abe that the BOJ still has instruments to further ease monetary policy, said Yoshihide Suga, Japan’s top government spokesman. The central bank didn’t reveal what Kuroda and Bernanke discussed. Hamada said helicopter money wasn’t mentioned with Bernanke on Tuesday. Suga denied an earlier report in the Sankei newspaper that officials around Abe were considering helicopter money as a policy option…in April the former Federal Reserve chief warned there was a risk Japan at any time could return to deflation. He noted that helicopter money — in which the government issues non-marketable perpetual bonds with no maturity date and the Bank of Japan directly buys them — could work as the strongest tool to overcome deflation, according to Honda. Bernanke noted it was an option, he said.
- Liberty Blitzkrieg (blog) – Michael Krieger: Federal Reserve Chairman Appears on 60 Minutes – Why Now?
The increased popularity of MMT in the public conversation is proof of this. People are starting to wonder why the central bank can print money and buy assets to save the portfolios of baby boomers, yet the public can’t simply print money for stuff like healthcare, education and roads. The Fed intentionally obfuscates what it does (money printing) with terms like “quantitative easing,” but people are starting to get the joke. The Fed doesn’t want people thinking about such things.