It’s time for a more radical approach to quantitative easing, writes Fran Boait in Newsweek, 2nd November 2016.

Here’s a short extract:

If central banks are picking corporate bonds to buy with the newly created money, why can’t it try harder to get that money directly into the real economy? Rather than pump money into financial markets, economists and campaigners are calling for new money created via QE to be spent through the government into the real economy on either investment in infrastructure, housebuilding, or a cash payment to citizens. Known as “QE for People” or “monetary financing,” under this proposal, new money would be created by the central bank — just as with QE — but would then be spent directly into the economy by the government. This would boost investment, employment, and incomes. This approach would also require the Treasury and Bank of England to think through how monetary and fiscal policy should work together to create a fairer, more balanced economy.

This might sound radical, but compare it to the current extraordinary situation. Today, it’s considered good and desirable if banks create money, regardless of whether they use it to lend to businesses or to blow up property bubbles. It’s acceptable for central banks to pump billions of newly created money into financial markets, or use it to lower costs for corporations that are already sitting on huge piles of cash. However, it’s taboo to suggest that the central bank could create money and get this money into the real economy through government spending. It’s time to break that taboo.

Read the whole article here.