[ascorbic]

My naive question is why so few governments or central banks tried implementing QE as helicopter money, rather than for bond purchases. It seems to my (undergrad-only econ) perspective that the person in the street is far more likely to put the money to use in the economy.

[aianus]

Bond purchases or helicopter money is essentially the same thing.

1) The government sprays more money around in welfare and salaries than they raise through taxes

2) The government issues bonds

3) The central bank prints money to buy those bonds

It's equivalent to the central bank printing money to pay for welfare programs and salaries (which go to common people in the streets)

[ascorbic]

QE books purchases aren't about allowing the government to borrow more. In any rich country the government can borrow as much as it wants. It's about crowding out private purchases of those bonds so that those lenders will lend to businesses and people instead. I'd be willing to bet that a $1000 tax refund is more likely to be spent than an extra $1000 that banks may or may not lend to someone.

[dmichulke]

I disagree, buying bonds benefits above all bond holders, read funds and investment banks. The people only get the money way down in the food chain.

[fyi1183]

I've been wondering the same thing. A few points come to mind:

It's easy trot out the "but the bureaucracy!" argument.

Helicopter money is in-your-face money creation which brings out the gold bugs and inflation hyperventilators. QE as practiced is in comparison too mysterious for people to latch on to effectively.

Helicopter money was never really championed by anybody in the first place, so nobody really had to argue against it.

It's really unfortunate that a perfectly reasonable policy never got a fair chance. I do think it has a lot to do with ideological bias especially among central bankers, and with the fact that a lot of people on the left, who should naturally be in favour of such a policy, are too averse to studying economics and finance thoroughly enough to participate effectively in such discussions.