The digitization of helicopter money at the Federal Reserve?

Helicopter money in the digital age?

That’s what a couple of former central banks are suggesting according to Bloomberg News. The Federal Reserve is reportedly planning to send money directly to Americans’ bank accounts in the next financial crisis.

Simon Potter, the head of the Federal Reserve Bank of New York’s markets group, and Julia Coronado, an economist for the Fed’s Board of Governors, have come up with innovative solutions to boost stimulus and relief efforts. The trick is to come up with a monetary tool called recession insurance bonds that are instantly wired to Americans.

“It took Congress too long to get money to people, and it’s too clunky. We need a separate infrastructure,” said Potter. “The Fed could buy the bonds quickly without going to the private market. On March 15 they could have said interest rates are now at zero, we’re activating X amount of the bonds, and we’ll be tracking the unemployment rate—if it increases above this level, we’ll buy more. The bonds will be on the asset side of the Fed’s balance sheet; the digital dollars in people’s accounts will be on the liability side.”

Coronado contends that “[by] getting money to consumers you can limit the depth and duration of a recession.”

In other words, this is the policy of helicopter money, but it involves digits and a digital infrastructure.

Indeed, you can expect the evolution (or devolution) of the U.S. central bank in the coming years, particularly if former Vice President Joe Biden wins the election since he and his campaign are suggesting a third mandate of racial equality for the Eccles Building.

What a fun time it’s going to be on the monetary policy side!

Money printer go brrr? Nope. Keyboard inputting go brrr.