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One Way To Make Money Appear In Workers' Pockets

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The Tampa Tribune

Published: December 20, 2008

Confidence in the wisdom of the custodians of the economy has taken a big hit this year. The people in charge of our investments and our taxes no longer seem so conservative, so diligent or so smart.

The Securities and Exchange Commission missed the biggest pyramid scheme in world history that happened right under its nose, if the astonishing accusations against money manager Bernard Madoff prove true.

The implications of that $50 billion fraud, coupled with all the other minor schemes taking money out of the economy, are hard to calculate but are bound to hurt. The Tampa Bay area was a hotbed of mortgage fraud, which is one reason the bursting housing bubble is doing so much damage here.

The Madoff scam hit wealthy investors, big banks and pension funds. But the price will somehow get passed on to all of us everyday workers and consumers, who ultimately are where wealth originates.

More aid needs to be redirected at Middle America, and fast. And as we've said before, the present economic crisis has left people feeling shocked, much like they felt seven years ago.

When trust goes down, costs always go up. A good example is the higher security and military costs required since Sept. 11.

The costs of this year's emergency bailouts and liabilities that the federal government has agreed to cover now exceed the total cost, adjusted for inflation, of all the major wars the United States has ever fought, according to CNSNews.com. The news agency compared war costs estimated by the Congressional Research Service to the value of the bailouts, calculated by Bloomberg News.

The bailouts seem to be giving almost everybody a turn at the feeding trough, except taxpayers. That's why a crazy idea is worth thinking about: fill helicopters with money and rain $20 bills on American cities, suburbs and farms.

Of course, that wouldn't work. The tallest, fastest and meanest among us would get most of the loot. But it's a classic cure for an economy beset with falling prices and frightened consumers.

In 2002, before he was head of the Federal Reserve, Ben Bernanke mentioned the idea in a speech on how to defeat deflation: "A money-financed tax cut equals Milton Friedman's famous 'helicopter drop' of money." You can read the whole speech on the Internet at www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/200... to see how he got the nickname "Helicopter Ben."

A form of the idea could actually work. A sensible version is proposed by a Republican congressman from Texas, Louie Gohmert. He wants to suspend all federal income taxes and payroll taxes for January and February. Check your paycheck stub to see how much it would boost your spending power.

We aren't endorsing the idea, but it's far from the worst one we've heard this recessionary year.

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