The Spectator’s Notes | 22 November 2008

‘A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.’ So said Ben Bernanke, now the chairman of the Fed, in a speech about how to ward off the ‘extremely small’ chance of deflation, which he delivered in 2002.

‘A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.’ So said Ben Bernanke, now the chairman of the Fed, in a speech about how to ward off the ‘extremely small’ chance of deflation, which he delivered in 2002. Today, deflation looms, and Gordon Brown seems to want ‘money-financed’ (i.e. paid for by printing money) tax cuts. The Conservatives have responded by promising to cut loose, from 2010, from their adherence to Gordon Brown’s huge spending plans. They will be the responsible party. In terms of exposing Mr Brown on the prudence which was once his strongest point, the Tories are putting themselves in the right place for an election campaign.