Helicopter Money Would Help People, Not Endangered Businesses

There’s a rush of interest in handing out $1,000 to every adult American—or some variant of that gambit—to soften the economic harm of the Covid-19 pandemic. Advocates of showering money on the public include fiscal conservatives such as Senator Mitt Romney, the Utah Republican, and Gregory Mankiw, the Harvard economist who was a chief economic adviser to President George W. Bush. The Trump administration wants to send out checks soon, possibly in amounts greater than $1,000 each, as part of a stimulus that could total $1.2 trillion.

Helicopter money, so called because it seems to fall from the sky, gets a lot of dollars out to a broad swath of the public. (The assumption is that the Federal Reserve won’t counteract the stimulus by sucking the dollars back out of the economy.) In contrast, a payroll tax holiday, which President Trump has advocated, helps only employed people who incur payroll taxes.