There’s an old adage in economics that the best way to cure deflation is to drop money from helicopters. Clearly this phrase isn’t older than mid-20th century, because before that time we didn’t have helicopters… we also didn’t have manipulative central banks. But now we have both, and they are about to join forces.

The helicopter statement isn’t meant literally. It conveys how central banks approach an economy when mainstream – and even out of the mainstream – monetary policies have failed.

By all accounts, central banks from the euro zone to Japan fit this description, and our own Federal Reserve is getting closer every day.

When the financial crisis first hit, the central banks did what they always do. They lowered interest rates. The goal was to entice borrowers to take on more debt, which they would arguably spend on goods and services, thereby giving the economy a positive jolt.

We all know what happened next.

It didn’t work.

A main reason, which seemed just as obvious at the time as it does today, is that developed economies weren’t suffering from a business cycle recession; they were suffering from a balance sheet recession. It wasn’t that the current expansion ran out of steam. It was that borrowers simply ran out of borrowing capacity.

As consumers – mostly home buyers – we’d taken on all the debt we could and then some.

The long list of bad actors and schemes, including shadow banks, mortgage mills, derivatives, NINJA loans, etc., were all set in motion to feed the desire of regular people to get in on the casino money that was flowing from real estate. Where else could a work-a-day, $50,000 per year Average Joe put down a little cash (or even no cash) and walk away eight months later with a $20,000 profit?

The feeding frenzy drove entire industries, like home building and furniture. But it couldn’t, and didn’t, last. The basis for the growth wasn’t earned income, it was borrowing, which eventually reaches a limit, even when it’s extended by sub-prime lending and predatory practices.