The island country of Porto Ricoco’s economy was in the shitter. There was high unemployment and stagnating standards of living for all but the most well off. Elected government officials had tried everything to get the people back to work and, in desperation, called Nobel Prize winning economist and recently hired UN Charter Reserve Chairman (of the the newly created UN central bank), Paul Krugman to see if he had any suggestions.
Not surprisingly, he did. Via a 5 hour Skype presentation he told them that, in his vast experience, nearly all economic downturns are caused by a lack of demand. What was needed was a way to bolster consumer demand. He asked the officials how much money the average citizen in the country had available to them. The resounding answer was ‘Not much!’.
‘Of course’, Krugman explained with a slight air of having stated the blindingly obvious. ‘The answer is simple. The people need money to spend. I may have just the thing.’
Less than a month later, after a hand picked team of econometricians at the Federal Reserve had run countless financial models that told them, in detail, how much money was required, Paul Krugman was off to the rescue in a very large helicopter loaded with barrels of random denominations of freshly printed UN cash to save the day.
This was a real bucket list day for the economist. As his first official act as UN Bank Chairman he was going to, literally, provide helicopter money to the poor people of a struggling economy. Many times he had written about the efficacy of cash injections, but never did he dream he would be able to be there to actually make it happen.
Hanging out the window of the chopper as it was taking off, Krugman said out loud to himself, ‘I love the smell of fiscal stimulus in the morning.’ Cruising low over the Hudson River, you could almost hear the sound of Ride of the Valkyries playing from the outside speakers on the chopper. You almost felt sorry for the recession. It didn’t stand a chance.
They made excellent time, until the rogue storm, ironically named ‘Tweeter’, sprang up out of nowhere and battered the cash laden helicopter. The craft struggled to stay aloft. The pilot radioed to his passenger. ‘Mr Krugman, we have to dump this cargo or we may not make it.’
‘It’s Chairman, thank you very much’, he replied curtly back over the intercom.
After a pause, ‘OK. Mr. Chairman. We need to lighten the load or we may not get out of this alive.’
‘Over my dead body’ was the defiant answer. ‘This is once in a lifetime. Fly on, soldier!’
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