Helicopter money called "harmless distraction"

The "helicopter money" debate has gained traction with former Fed policymaker calling it "a harmless distraction" and "illegal for Fed" in comments on his Twitter page.

Writing on BloombergView, Narayana Kocherlakota argues:

Global central bankers' quest for unconventional ways to stimulate weak economies has generated a lot of excitement about "helicopter money," a policy that entails creating money and giving it directly to people or the government to spend.

The excitement seems unwarranted to me and misses the important point: The government has all the borrowing and spending power it needs to boost the economy and get inflation up to the desired level, if only it had the will.

Fiscal and monetary policy makers can cooperate to generate desired inflation. The government can provide stimulus, and the central bank can help by allowing that stimulus to push upward on prices. But the impact is the same whether the government finances the spending with debt or new money. Why confuse matters by talking about helicopters?

Still, the controversy surrounding the topic makes me believe the talk about "helicopter drop of money" is unlikely to subside anytime soon.