The notion of Universal Basic Income (sometimes known as helicopter money), where a central bank stimulates growth by giving all citizens of a country a fixed monthly income regardless of their economic status, is steadily travelling from a fringe idea to a credible position. This growing presence of helicopter money in mainstream political discourse was demonstrated earlier this month, with Dutch banking giant ING commissioning a European wide survey into attitudes towards the idea (read the full report here). The survey asked nearly 12,000 people across the continent - including those in the UK- to consider helicopter money, and the results were interesting, if conflicted. First off, the idea was popular -far more so than might have been expected, with 54% of those being asked
To what extent do you think it is a good or bad idea for the ECB/central bank of your country to distribute money to all people aged 18 years or older (a policy often referred to as helicopter money)? I think the idea is …
answering 'Very good', with only 14% considering the idea bad, and the rest split between neutrals and 'don't knows'.
On the other hand, ING made a lot of noise about the fact that only 26% of respondents would spend all the money they received, with 52% claiming they would save it - as they note, this would go against the point of helicopter cash, as the money wouldn't be pumped back into the economy, although we can't help but feel that lots of people often have intentions of saving money, but far fewer achieve to.
ING concluded the following alternative methods were perhaps better calls:
"To increase the share of helicopter money spent, an alternative could be to hand out time-limited spending coupons that could only be used by the owner of the coupon (to prevent selling). Given the reluctance of consumers to spend helicopter money, this suggests that a larger impact might be achieved if it were given to the government to finance projects."
Regardless, the very existence of this report suggests that a policy that could quite conceiveably make a material differnce to the life of those lower down the wealth spectrum is comiong closer to being acheived. Of course, once Brexit drops, that's a party we won't be joining...