Helicopter Money: The Risk of Catastrophe

As of late, Eric Lonergan has had negative interest rates in his crosshairs. Helicopter money is a much sounder policy, he says, and goes on to cite a single study “proving” a precise, positive, and unshakable link between tax rebates and spending. The same “proof” is not available for negative interest rates, he says, which will probably reduce demand anyway (see David Einhorn’s Jelly Donut).

As you can tell, I find his argument full of speculation. It is intelligent, well-reasoned speculation, but speculation nonetheless.