ks.234
Half way to Infinity
MMT has nothing to do with Friedman's 'helicopter money'. That's random transfer payments for whomever finds a bag of money in a field. It's not targeted spending. They could just put in a box under the bed.The newly created money was indeed swapped for bonds (mostly government, some corporate) but it was a swap and the balance sheets of the (commercial) banks stayed the same size and just shifted in composition. The idea was to increase liquidity and therefore stimulate the economy.
It was a pretty shit idea and they should have actually printed money and given it to people (aka "helicopter money"). But mostly they were hamstrung by the government that had completely abandoned fiscal policy at the very worst possible time so they (and therefore us) were basically screwed.
This 'newly printed money' swapped for bonds to 'create liquidity'. QE is not bond sales it is bond purchases and then returning the reserves to their position of being excess reserves in the banking system, since they somehow think this puts the banking system in a more stable lending position. Though we know they don't need (or want) excess reserves.
In reality bonds didn't stop getting sold anyway, they still did it because they have a fixed mechanism - no matter how meaningless it is - for justifying fiscal injections.