The very short version of the “helicopter money” idea goes: in times like ours, send some cash directly to regular people, who can really use it, instead of having the government pass all of its stimulus money through banks, which tend to not use it the way we would like. In Bloomberg today, Mark Buchanan describes new research into mathematical models of economies that experience great inequality. In such economies, as inequality reaches a certain level, money starts naturally flowing towards the wealthy, which only makes inequality worse:
The researchers found another interesting effect — a “trickle up” flow of wealth quite different from the usual “trickle down” picture of supply-side economics. In an economy with appreciable inequality, capital tends to flow from those with less to those with more, generating a cascade of transactions along the way. Hence, policy interventions aiming to spur economic activity should work better if they inject money into the system at the lower end, rather than from the top.
Global governments have injected trillions of dollars into banks seeking to stabilize economies. Is cutting a few billion in checks to poor people such a wild idea?
Try it, why not?