CP - Peoples Qualitative Easing - Michigan 7 2023 BFHGR

People’s QE CP --- BFGHR
Notes
This counterplan can use a little more work during the season if you want to make it a prime generic, but it has a lot of potential. Ana and Avi did basically all the work --- and did it in just two research sessions --- excellent job!! Politics is the primary net benefit, but the internal net benefit is an option as well. I would do a little background reading on the People’s QE before reading the CP. It works best against BI affs.
Top Shelf
1NC --- Shell
Text: The United States federal government should substantially increase monetary distribution in the United States by implementing Quantitative Easing for the People.
The CP unlocks monetary policy’s hidden potential. It’s distinct from the plan and comparatively more effective than fiscal policy – avoids political gridlock.
Eric Lonergan, 08-26-2019, acro hedge fund manager, economist, and writer, "Reply to Larry Summers," Philosophy of Money, https://www.philosophyofmoney.net/a-reply-to-larry-summers/
An ‘Either-Or’ approach to fiscal and monetary policy is mistaken
Larry Summers has delivered a pointed and sweeping critique of the prevailing consensus among central bankers. He rightly asserts that reliance on further interest rate cuts, asset purchases and forward guidance is likely futile and potentially counter-productive.
I think most of the macroeconomic policy and analysis community would agree with Larry’s diagnosis, as far as it goes. Central bankers, too. They may not say so as bluntly in public, but they do behind closed doors. Mario Draghi’s assertion that a more pronounced downturn in the Eurozone would require a fiscal response is tantamount to the same thing.
My concern with this emerging consensus is four-fold:
1. The assertion that monetary policy is not fit for purpose given existing tools ignores the power of a series of monetary policy innovations, including dual interest rates. Freeing a targeted lending rate from the deposit rate, as the ECB could do with the TLTRO is clearly monetary policy and undeniably effective. Actually doing this requires widespread intellectual support.
2. Central bank independence is a considerable institutional achievement, abandoning it due to a lack of intellectual leadership and political courage could set back macro policy-making for decades.
3. If ever it was clear what the fundamental problems with fiscal policy are, they are evident today in spades. Markets are literally paying governments to ease, and they appear either incapable or aggressively unwilling. The one exception appears to be America’s President who has little regard for constitutional or political checks and balances, the rule of law, or the separation of powers. If America really wants to descend into crony capitalism, arm him with the need for monetary and fiscal cooperation.
4. Our current predicament is a failure of the mind, and a lack of political courage. Macroeconomists who aspire to be Keynes risk rationalising the modern-day Herbert Hoovers in Europe, and global Trumpists elsewhere.
1. Monetary policy has the power
Larry Summers is entirely correct to be sceptical of the effects of further rate reductions, QE or forward guidance. He is right to hammer this home, because markets seem convinced that central banks will continue to pursue these policies despite falling share prices of banks (market-based evidence that negative rates are hampering intermediation), and theoretical arguments why the marginal effectiveness of interest rate reductions and QE diminish.
Yet none of this is true of dual interest rates, which he oddly ignores. The marginal effect of dual interest rates increases. Consider the ECB’s targeted long-term refinancing operation (TLTRO). Under this programme the ECB can make targeted loans to banks at whatever maturity it chooses, at an interest rate it wants. There is no legal, operational or administrative reason why the interest rate on these loans cannot be freed entirely from its deposit rate. In one single monetary operation, all of Larry’s legitimate concerns evaporate.
Two ways in which TLTROs can be used have been outlined. Either the ECB could operate with dual interest rates and announce, for example, a 10-year targeted lending scheme at say -2%, equivalent to 10% of Eurozone GDP, with strict conditions similar to those on existing TLTROs. Alternately, it could make perpetual loans at zero-interest available to all Eurozone citizens, using the banking system to administer the loans.
To be absolutely clear, both of these monetary operations are legal, monetary, and subject to the mandate of the European central bank. They are monetary because they involve the creation of money on the central bank’s balance sheet, there is no involvement of any national treasury, and they are administered through the banking system. That is the definition of monetary policy.
2. An abnegation of duty
Some economists will get hung up on how the Bundesbank will react, or what the effects are on the central banks’ balance sheets. That is precisely the problem we face – an abnegation of duty hidden behind a lack of political and intellectual courage. A central bank’s balance sheet is accounting fiction. Macroeconomists and central bankers need to make this explicit. There are no circumstances where a monetarily sovereign central bank cannot fulfil its mandate, whatever its accounting capital is. Tiered reserves, IOR, and prudential regulations give central banks a complete toolkit to control future inflation, should it ever materialise.
This goes to the heart of the challenge of central bank independence. The best arguments against did not relate to legitimacy (I’ll come back to this) but concerns about priorities. Astute observers feared that academic economists and central bank officials would get lost in arcane and irrelevant debates, fiddling while Rome burns. Examples? Absurdist debates about whether or not cash transfers are ‘permanent’, banal jargon such as ‘state contingent forward guidance’, which roughly means ‘we’ll change our minds depending on what happens’, requesting indemnities against ‘losses’ on asset purchase schemes, and pedantry over the monetary/fiscal distinction – which is in fact crystal clear.
The debate about central bank independence needs restatement. Many seem confused into thinking that because central bank officials are not directly elected this means they lack legitimacy. High functioning democracies have checks and balances, and separations of power. Legitimacy resides in fulfilling mandates determined by democratic process. There are very good and relatively obvious reasons why well-functioning societies decided to give control of money printing to independent central banks. Whatever you think about Boris and Trump you don’t want them to think they can just print at will. There is a difference between money and debt – and it matters. Government bonds, in a market, need to be accepted voluntarily by others. In a free market, potential lenders can say no. Base money, however, can always be created. This is the confusion often created by discussions of MMT. Most well-functioning democracies want fiscal authorities to face constraints, and they want democratically-mandated central banks to produce money subject to the objectives of price stability and full employment.
Loss of legitimacy is a failure to fulfil a democratic mandate. If it really is the case that central bankers cannot fulfil their mandates, they will have lost legitimacy, and our collective cyclical and political fortunes will become entirely subject to the whims, eccentricities and vested interests of whichever small group of politicians hijack elections. There is no evidence that this is either what we want or in our collective interests.
To be absolutely clear, elections are the lifeblood of democracies. But so are checks and balances – otherwise we end up with minority rule, myopia and a grotesque manipulation of public ‘opinion’.
3. Mythical fiscal efficacy
Counter-cyclical fiscal policy now resembles a mythical Greek god – some fantastical winged creature which will swoop from the sky and save us all, if only the community of economists could agree upon it and abandon cutting interest rates. There is nothing to stop governments engaging in brilliantly effective fiscal policy. Honestly, they have not been held back by MIT professors’s equations pointing to the power of monetary policy. The reality is that they are either incapable of doing so, or unwilling. There are huge inherent problems with using fiscal policy to stabilise economies. Party politics is a fight between political vested interests. Policy cannot be changed mid-week by conference call in response to an abrupt change in economic data. Infrastructure spending can take decades of planning. In the Eurozone, effective fiscal policy is illegal.
There is a significant danger that Summers’s arguments simply rationalionise the confused instincts of Northern Europe’s aspiring Herbert Hoovers: negative interest rates are a disaster, recessions are a good thing, and if there’s an economic contraction we’ll look after ourselves with a trivial stimulus.
4. Courageous central bankers need intellectual support
Thankfully, there are a small number of global central bankers to whom most of this is relatively obvious. They need political and intellectual support. There is absolutely no reason for Larry Summers and other policy thought leaders in macroeconomic not to get behind an aggressive and coordinated programme of dual interest rates globally. The debate should be focused on how these lending programmes should be targeted and what their scale should be. An innovative financial structure for the Fed may also be needed, as it increasingly looks hamstrung by post-crisis legislation. But rationalising central bank apathy and fiscal incompetence is an intellectual turn for the worse. We already have failing fiscal authorities, do we want our central banks to fail too?
1NC --- Shell --- Internal NB
The United States federal government should substantially increase monetary distribution in the United States by implementing Quantitative Easing for the People.
The counterplan is QE for the people, which solves growth.
Eric LaRose 16, Data Scientist at Microsoft, Degree in Public Policy from Georgetown, formerly worked at the Federal Reserve Bank in Richmond, "Helicopter Money", https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/econ_focus/2016/q2/pdf/jargon_alert.pdf
Since the global financial crisis, central bankers around the world have considered and sometimes used a number of unusual policy tools, including quantitative easing (QE) and negative interest rates, in an attempt to stimulate economies and fight deflationary pressures. Now some economists and policymakers are thinking about adding another item to this toolbox: helicopter money.
No, the use of helicopter money wouldn’t involve money actually falling from the sky. But it would involve a much more direct method of getting money into the hands of citizens than central banks have used before. Under traditional expansionary monetary policy, the Fed attempts to stimulate the economy indirectly by lowering the interest rates faced by banks, causing them to borrow and make more loans. In turn, the interest rates faced by businesses and consumers decrease, providing economic stimulus. In contrast, helicopter money would consist of the central bank creating money and then distributing it directly to the public through fiscal transfer payments — for instance, by financing a government spending increase or tax cut or, more drastically, by mailing a check directly to each household.
The idea of helicopter money stems from a 1969 essay by Milton Friedman, who envisioned a hypothetical scenario in which a helicopter drops $1,000 on a community in a one-time event that doubles every individual’s cash balances. In the long run, Friedman concluded, this event would do nothing more than double the nominal price level. But in the short run, Friedman believed the “helicopter drop” could increase real output, since prices would take time to adjust and firms might initially mistake inflation for real price increases.
Economic events over the past quarter-century have caused the idea to be taken more seriously as a possible tool to increase both output and inflation. In the mid-1990s, Japan began experiencing deflation, and in a famous 2002 speech, Ben Bernanke mentioned helicopter money as a possible last resort for the Fed to fight deflation should it ever reach the United States. Over the past few years, more figures have publicly discussed the idea as near-zero interest rates have weakened the ability of conventional monetary policy to further stimulate aggregate demand. Although a close aide to Japan’s prime minister has opposed it, many experts speculate that the Bank of Japan may pursue this policy in the coming years.
In addition to lowered interest rates, the Great Recession saw the use of QE, in which central banks use newly created money to buy assets from financial institutions. Conceptually, helicopter money is quite similar — some supporters call it “QE for the people.” Many believe that QE failed, however; they argue that banks did not increase lending to consumers in response to this massive liquidity increase, blunting its effects. In contrast, helicopter money could get around this problem by eliminating the middleman and putting money right in the hands of consumers, possibly providing stronger stimulus than QE. As Columbia University economist Michael Woodford put it, “the fact people get an immediate transfer should lead them to believe that they can afford to spend more.”
Solves climate change. Otherwise, extinction.
Francis Coppola 19, MBA from Cass Business School, contributor to Financial Times, cited by the NYT and the Washington Post, author of "the case for People's Quantitative Easing", 7/26/2019, page online.
Climate change
There is scientific consensus that the Earth’s climate is warming, which is radically changing the nature of the planet.10 There are profound implications for the future of humanity and indeed for life on earth as we know it. Already, the effects are becoming apparent: ice caps are melting, sea levels are rising, global temperatures are the highest on record and the incidence of extreme weather events is increasing. According to the Governor of the Bank of England, climate change threatens both financial stability and long-term prosperity.11
But greening the global economy will be phenomenally expensive, and there is very little time left in which to make a significant difference.12 Only central banks have the power to create the quantities of money needed to decarbonize the whole world before it is too late. Central bank financing of green initiatives, low-carbon technologies and renewable energy projects undertaken by governments and public investment banks around the world may be the only realistic way of funding what will be the world’s largest ever development project. If governments and central banks can conquer their fears and agree to cooperate, it may not be too late to use QE for the People to help to save the planet.”
2NC ---Solvency Run---Helicopter Money
The counterplan solves. It has the central bank implement regular helicopter drops
Francis Coppola 19, MBA from Cass Business School, contributor to Financial Times, cited by the NYT and the Washington Post, author of "the case for People's Quantitative Easing", 7/26/2019, page online.
I will now discuss the forms that this type of QE for the People can take.
1. Helicopter drops
Friedman’s ‘helicopter drop’ is a form of short-term demand stimulus. Friedman insisted that the helicopter should only fly once. In practice the helicopters might fly more than once, if the recession is deep, but they should not need to continue flying forever. Of course, these days, no one would drop bank notes from helicopters. In developed countries, most people have bank accounts. The central bank can simply credit bank accounts. Alternatively, the central bank could send a cheque to every individual.
Many people have more than one bank account, however. How would the central bank ensure that each individual only received one payment? Some kind of authentication would be needed. Furthermore, about eight per cent of the population in developed countries do not have bank accounts. These people include some of the poorest in society – homeless people, for example – for whom a bank account is impossible because they have no fixed address. Excluding them from the helicopter drop would be unfair. It would also reduce its effectiveness, since these are the people most likely to spend the money rather than save it.
One way for the central bank to deliver one-off helicopter money might be for every individual to have an account at the central bank. The central bank would simply credit these accounts according to need. An alternative might be to issue prepaid cards which would be accepted by retailers.
Aff gets rolled back, but counterplan solves.
Frances Coppola 20, MBA from Cass Business School, contributor to Financial Times, cited by the NYT and the Washington Post, author of "the case for People's Quantitative Easing", "How Central Banks Could Use Digital Cash to Deliver Universal Basic Income," 3/30/2020, https://www.coindesk.com/policy/2020/03/30/how-central-banks-could-use-digital-cash-to-deliver-universal-basic-income/
CBDC = Central Bank Digital Cash
Frances Coppola, a CoinDesk columnist, is a freelance writer and speaker on banking, finance and economics. Her book “The Case for People’s Quantitative Easing” explains how modern money creation and quantitative easing work, and advocates “helicopter money” to help economies out of recession.
With the advent of the coronavirus pandemic, Universal Basic Income has suddenly become big news. Many people are now calling for governments to give everyone a regular income with no work requirements – since we want most people to stay at home and not work – with no means testing (that is, adjusting for income).
However, delivering universal basic income is problematic. Governments lack the up-to-date information on identities and addresses needed for physical delivery of money or pre-paid cards. And checks or bank transfers shut out the unbanked. That leaves a gap for a new institution to step in, like a central bank, which could issue a digital currency as an efficient way of delivering a universal basic income.
Universal basic income (UBI) is a cash income that is paid to every individual regardless of their circumstances. It is paid:
Regularly (i.e. not one-off “helicopter drops”)
Directly (i.e. not via an intermediary such as a bank)
To the individual, not the household or family
Unconditionally, i.e. without work requirements or means testing (though it may be taxed away at higher incomes)
Universally, i.e. to everyone irrespective of their age, gender, race, religion, class, income or any other characteristic.
Government already gives regular payments to benefit claimants. Many of these are intermediated through banks, but programs such as Food Stamps bypass banks. However, because Food Stamps have a restricted use, they are often traded by the poor for money, since people can’t live on basic foodstuffs alone. Also, many benefits, even if paid in cash, tend to go to the household rather than to individuals, creating hardship for, say, women in abusive relationships. In the U.K., where I live, the Conservative government’s flawed Universal Credit system shows how harsh work requirements can deprive people of the means to live, while pushing people too fast to go without benefits creates a disincentive to work. Welfare systems are, by their nature, both complex and perverse.
The present crisis has stretched welfare systems beyond their limit and demonstrated go

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