quarta-feira, janeiro 16, 2013

Helicoptering

How Keynesians Hijacked Milton Friedman's Helicopter por Gary North:
Milton Friedman .. described the distribution of fiat money in terms of a metaphor: a helicopter full of paper money. It drops this money on the population below.
What the metaphor does not show is what Austrian School monetary theory emphasizes: the new money is introduced at specific points in the economy. It is spent into circulation by the national government, which sells its IOUs to the official counterfeiter: the central bank. The national government gets first access to this money. It then spends it. The recipients of this government spending get access to the newly created money earlier than other citizens do. So, prices in general do not rise uniformly. They may not rise at all if overall economic production increases. What always rises is government spending. This fact, not the general price effects of counterfeit money, is the heart of any accurate analysis of central bank money.
From the beginning, Keynesians loved his metaphor of the helicopter full of paper money. Why? Because that metaphor portrayed the central bank as a supplier of free goods .. Fiat money issued by a central bank therefore allows the government to buy more power and influence in the overall economy. Central bank fiat money subsidizes the national government.
The metaphor of a helicopter full of paper money serves the purposes of Keynesians and monetarists. But it is not a correct metaphor. It is also not relevant to the process of monetary inflation.

The correct metaphor is a bag man. A bag man acts as an agent for the mob. He carries currency in bags to pay off corrupt politicians.

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