Skipper

Simon Jenkins has been banging onb for some time about the dreadful timidity of UK economic policy. No investment produces no grwoth while quantitative easing to the tune of 320 billion remains with the banks, mysteriously unspent but probably used to reduce debt. Jenkins seeks to take inspiration from the Olympics: why not use imagination and daring?
He quotes the unlikely advice of Tony Blair: 'play unsafe'. Jenkins' idea is to direct money into the hands of every citizen: one thousand smackers to be spent before Christmas. Wouldn't this unblock the economy? Consumers go out and buy stuff which manufacturers have to make; ergo, we have economic growth and jobs. Simples! However, I see at least a couple of problemettes with this unorthodox answer.

Firstly, so much of our manufacturing capacity was destroyed during the eighties, we have only about 16% of the economy engaged with it. Most of the 'helicopter money' would make its way into the coffers of German, US or Chinese companies.

Secondly the author of this 'helicpter money' idea, Milton Friedman, the great Chicago economist, used it as an analagy not to achieve economic growth but to warn of nascent inflation. An excellent Economics blog puts the argument this way

Assuming this is a onetime event, the most likely outcome will be a similar return to the ex ante position only with higher nominal prices. With more money, consumers will bid up prices and as prices increase, people will save more until savings are back to about 5.2 weeks worth of cash balances. How the transition will play out is anyone’s guess as preferences and prices are always in flux, but society will eventually end up no better or worse off than before.
This view foresees a spurt of inflation until things return to normal. The greater the casshinjection, one assumes, the greater the inflation, with all the evils associated with this condition- we oldies remember it well from the seventies.

So 'playing unsafe' has its dangers, some of them extreme. What slightly surprises me about the measured, Establishment Jenkins, is that he is advising the goverment to adopt exactly the mindset which, when adopted by bankers in New York and London, brought the structure of international economics crashing down around their heads.