So the Bank of England is extending its so-called "Quantitative Easing" (QE) policy and creating another £50 billion of new money to buy Government bonds (gilts), on top of the £275 billion of "magic money" it has already conjured up, supposedly to stimulate the economy.
So far, there is precious little evidence that QE is actually stimulating the economy. There is however, plenty of evidence that it has damaged older generations and created inflation.
Despite billions of pounds of newly-created money, lending fell last year, high inflation sapped consumer confidence and growth weakened.
How should QE work? In theory, as the Bank buys gilts, their interest rate falls, driving down rates across the economy, and as the cost of borrowing falls, economic activity will rise.
That is the theory but what about the reality? In fact, sellers of gilts often buy overseas assets, which helps overseas economies. Large companies have plenty of cash now so falling gilt yields don't benefit them and banks are not lending on decent terms to the small companies crying out for credit.
Quantative easing is an assault on older generations
So buying gilts may not boost growth, but even worse, QE may actually harm the economy as falling interest rates on gilts directly damages pensions and inflation saps consumer confidence.
QE is actually an assault on older generations.
People recently or soon-to-be retired will have less money to spend as a result of QE forcing down annuity rates. Annuity rates fall as gilt interest rates fall. Around 10,000 annuities are sold each week and, once bought, annuities can never be changed, so QE has already made over a million pensioners buying at currently depressed rates permanently poorer. A £100,000 pension fund would have bought £7,800 a year pension annuity income in 2008, but now it will only buy around £5,800.
QE has also hit pensioners who choose income drawdown for their pension fund instead of annuities. The maximum income they can take is set by the Government's Actuary Department and lower gilt rates mean lower drawdown pension income, leaving pensioners with less money to spend, which hurts growth.
In addition, company pension deficits rise as gilt rates fall, so QE forces companies to divert money into their pension funds instead of using it to build their business and create jobs.
In short, QE gilt-buying will not work. The Government should instead harness the billions of pounds in pension funds to help stimulate employment and long-term growth by underwriting infrastructure projects.
In addition, it could use £50 billion of QE more effectively by lending directly to small firms, or underwriting new small company lending by banks, to help create jobs. Indeed, even dropping £50 billion in ten pound notes from a helicopter would increase spending and create more growth than the current policy.