While the United States Armed Forces (private mercenaries) are in Afghanistan and the Philippines defending “all freedom-loving people everywhere in the world,” Benjamin S. Bernanke, a member of the Federal Reserve Board of Governors, delivers his “Helicopter Speech” to the National Economists Club, in the District of Columbia:

       [T]he U.s. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.s. dollars as it wishes at essentially no Cost.  By increasing the number of U.s. dollars in circulation, or even by credibly threatening to do so, the U.s. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.  We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

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       A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.

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       [P]eople know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.  Hence they will believe the government’s promise not to “take back” in future taxes the money distributed by means of the tax cut.

       NOTE: Bernanke was referring to Milton Friedman winner of the Nobel Prize for economics who derisively

       [restored 11/26/2023] Thanks to Freedom’s Phoenix and Jim Lorenz for this entry.