Interest rate cuts, the customary favoured option, have failed to stem the decline. So too has the turn to more unconventional “quantitative easing”, which has mainly benefited banks and wealthy investors speculating in stocks and real estate. Now much discussion centres around bypassing bank intermediation and electronically crediting individual accounts to boost consumer spending and modestly reflate the economy.
The fact that the scheme is associated with Friedman and his disciple Ben Bernanke makes it a more palatable political alternative to the right than public spending on infrastructure and other forms of fiscal stimulus which imply more state intervention in the economy.
It also converges with the economic thought of left-wing Keynesians, notably the adherents of the Modern Monetary Theory (MMT) school, who have long argued that unlimited “money printing” is non-inflationary so long as the economy is not operating at full capacity.
If states do implement the policy, however, you can be sure it will fall well short, like other reforms, of what MMT’ers and others on the left have in mind.