KUALA LUMPUR – After being scoffed at by netizens for his “helicopter money” idea, mooted during a radio interview on Monday, Deputy Youth and Sports Minister Wan Ahmad Fayhsal Wan Ahmad Kamal is now imploring his detractors to read up on modern monetary theory.
In a Facebook post yesterday, the Bersatu youth chief – known for his penchant for using academic jargon – rebutted criticisms that Malaysia will suffer from hyperinflation if Bank Negara Malaysia (BNM) prints more currency to be directly disbursed to the people.
“Those unclear [on it] will make false assumptions that hyperinflation will happen like what happened in Zimbabwe. This is not true. Read and understand this,” he said, referring to an explanation on the theory by the economy bureau of Bersatu’s youth wing.
“Helicopter money” refers to the act of printing a large sum of new money and then distributing it among the public to stimulate the economy during a recession, akin to a helicopter dropping emergency supplies during tough times.
Modern monetary theory posits that printing more money is not the sole cause of inflation, which is instead caused by a country’s failure to produce enough food and goods for the people to spend their money on.
“Modern monetary theory argues that the money cycle which enters the financial market needs to be balanced with product output (process output) so that it can stabilise supply and demand in the market,” said Fayhsal.
“The theory emphasises the need for government-printed money to be fully utilised in the development sector so that it can create more job opportunities and produce more products in the market.
“The injection of more money into the market will not inflate it if spending is spurred.”
Fayhsal had suggested that BNM should print out more money during a segment on the BFM radio station. He also remarked on the need for the central bank to forgive debts to help those in need.
“We can couple this (forgiving debt) with a helicopter money monetary policy, where the central bank can directly print money and give it to the people so that they can spend it," he said. – The Vibes, November 19, 2020
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