Financial Thought Leader Paul McCulley Says Both Fiscal & Monetary Helicopter Money Are Essential

When a fringe economic theory goes mainstream and is actually implemented by policymakers you better pay attention. The once-fringe theory in question is called Modern Monetary Theory, or MMT for short.  The assumption behind MMT is that massive government spending helps the economy grow to its full potential, including full employment, and also finance major programs like universal healthcare, free college tuition, and green energy initiatives. Sound familiar?  What about the burgeoning federal debt? Not an issue according to Federal Reserve Chairman Jerome Powell. In an interview on National Public Radio this week Powell   said: “Given the low level of interest rates, there’s no issue about the United States being able to service its debt at this time or in the foreseeable future.”  Enter today’s guest, Paul McCulley, who wrote an academic paperback in 2013 titled: “Helicopter Money, Or How I Stopped Worrying and Love Fiscal-Monetary Cooperation.”    McCulley is currently an adjunct professor at Georgetown business school where he teaches a very timely multi-disciplinary course combining law, economics, monetary policy, global finance, and behavioral finance.   I asked McCulley to explain why he believes helicopter money and the unprecedented fiscal and monetary cooperation we are seeing today is so essential, and not an issue.    WEALTHTRACK # 1739 broadcast on March 26, 2021 More info: https://wealthtrack.com/financial-though…ey-are-essential/ “Helicopter Money, Or How I Stopped Worrying and Love Fiscal-Monetary Cooperation” available https://www.interdependence.org/wp-content/uploads/2013/01/Helicopter_Money_Final1.pdf