Chapter 11
What Have Others Written about Stimulus without Debt?
In the past few years there have been many blogs, short articles, and comments through various media about stimulus without debt and helicopter money. In this chapter I will review some of these writings and react to them. But I want to begin with an article written decades ago by Milton Friedman.
Milton Friedman’s Helicopter Parable Friedman (1969) asked readers to imagine, as a thought experiment, a helicopter drop of money on a fully employed economy with national output (income) $10,000 per capita, and money $1,000 per capita held by the population. Each dollar number is an average; some individuals have higher-than-average income or money, others lower. Friedman analyzed the effect of a helicopter drop of $1,000 per capita—a doubling of the money held by the population to $2,000 per capita. Initially Friedman assumes each person picks up an amount of money equal to the amount he held before. Each now has more wealth than before, 179
