Peoples QE

KomradeBishop

In the UK, Corbyn and his shadow chancellor, have endorsed a policy they dub 'Peoples QE', which finally puts into mainstream political/economic discussion, the idea of having the Bank of England - when it fails to meet its inflation rate targets by conventional means, as well as by regular QE (printing money for the banking system) - trying to meet its targets by a new 'Peoples QE' policy, which is printing money and directing it into existing/new public service programs:
http://positivemoney.org/2015/09/john-mcdonnell-qe-for-people-will-entail-an-independent-bank-of-england/

Where QE fails to pump enough money through banks into the real economy, to meet inflation targets - largely due to the lack of demand for loans - Peoples QE would be almost directly putting money into the real economy, and stimulating Aggregate Demand in the process.

This is similar to - but is definitely not the same as (hence warrants its own thread) - MMT, though the latter goes much further in the kind of policy proscriptions it advocates (the key additional policy identifying MMT, being the Job Guarantee).


What is nice about the way Peoples QE is framed though, is that it is definitively and specifically about maintaining:
1: Central Bank independence, and
2: Targeting and maintaining a specific inflation rate.

This is a much more simple and better framing, for advocating this kind of policy, than what MMT'ers advocate - because it immediately makes it a lot harder to make arguments about excessive 'election giveaway' spending (due to central bank independence), or about excessive inflation (the policy is specifically about targeting a set level of inflation - and the money creation is directly in control of the central bank, not government).


This type of policy is probably the most direct and greatest threat that there is though, to all of right-leaning as well as NeoLiberal-Left-leaning politics/economics (i.e. to types who, during a recession, are austerity/deficit-cutting/balanced-budget/surplus advocates), and would permanently remove a lot of power over society from the banking/financial/business sector - so it tends to be subject to a greater amount of sneering and uncivilness (mainly trying to attack credibility instead of arguments), than almost any other political/economic topic I know of.

KomradeBishop

Even the ECB president Draghi is now saying - in a roundabout way - that this concept/policy should be getting a closer look, for helping EU funding/investment programs:
http://positivemoney.org/2015/10/mario-draghi-is-open-to-considering-helicopter-money/

Bizarrely, given how important and deeply political a topic this is, this is exactly the kind of topic that is not acceptable in political discussion on Boards, as it is deemed to be 'economic theory'.

It is good to see it finally thrust into mainstream political discussion at last though - this is guaranteed to slowly shift the overton window.