What is helicopter money? | government distributing free money | why government gives free money? | why is free money given by government to the people

What is Helicopter Money?

Helicopter Money

By reading this name helicopter money you should have made an image in your mind that what it should be, so basically helicopter money doesn't mean that money is dropping from a helicopter all over the country. Its concept is even simple than its name.

The need for Helicopter money arises when there is an economic slowdown in the country or the GDP of the country is lower. The government sets aside some amount of money from its reserves and then the government has to circulate this money in the residents of the country by which the people will have more money to spend wherever they want. This will give a mild start to the businesses, which were going to be closed due to the economic slowdown.


This Helicopter Money process is a cycle that is run by the government by which the country's GDP increases and initially some amount comes back to the government when the business owners and citizens pay tax on their spending.

In this process the money is given to the citizens through cash form or any coupon form. Because if the government gives coupons, the people have to buy something off or they cannot use the offers on the coupon. 

This initially boosts the businesses which were going to shut down. Then the production of the companies also increases as the demand increases and resulting it into hiring people for jobs because the workload increases and the company has to increase the staff numbers to provide the demands.

This whole situation leads to more jobs to the citizens and the GDP of the country increases and by which the people who have got new jobs now they will earn money and the government now will levy taxes on them which will generate income for the government. This looks a very successful decision in such economic slowdowns but if you see practically, the government has to print more money to give more money and this will result in a degradation in the value of the currency of that country which will again affect the economy adversely. 

This concept was once used, and in history, this experiment was not considered that successful, this concept is trending very much nowadays thanks to our economic condition because of Covid-19.

I hope you have understood this concept of helicopter money. Keep reading my blog for this kind of interesting information.