I think the real reason “responsible” policymakers fear printing free money even when doing so would solve problems is a fear that the ignorant masses, once they solve one problem this way, will demand free money as the solution to all problems. The Pringles ads used to boast “once you pop, you can’t stop” which in my case is basically true. Consequently, prudence dictates that I never buy a can of Pringles to eat “just a few” chips since in practice I’ll end up eating the whole damn thing.
Most of the time you can’t solve economic problems by printing up free money and handing it out and people know that. So Very Serious People fear that if do solve an economic problem with the printing of free money that the public’s appetite will become insatiable. The conventional wisdom seems to be that something like this (rather than the more parsimonious “Richard Nixon was a bad president”) theory explains the Great Inflation of the 1970s. On the fiscal side, I generally think that similar Pringles Logic rather than some more nefarious conspiracy explains a lot of the behavior of Ari Berman’s austerity people. VSPs don’t think the public can handle the message that sometimes deficits matter a lot and sometimes they don’t matter at all and sometimes they ought to be larger.
In both cases, the idea is that it would be better not to solve present-day problems because doing so might confuse people into pressing for similar solutions in different situations. In turn, it probably reflects the social and economic isolation of elites. If the unemployment rate for the social peers of the highly educated middle aged people who hold the levers of power were 9 percent, they would decide that present-day problems are sufficiently pressing to make it worthwhile to solve them.