It seems unfortunate to give up a useful tool for managing the economy just because it can't be structured to provide everyone an equal amount of benefit. Should we end small business programs because not everyone's wealthy enough to own a small business?
I'd see the problem if it worked how I've sometimes seen it described, where rich people and banks are just getting free gifts of cash, but that's not accurate.
I don't see why it's unfortunate if there's an equally good tool that is more egalitarian.
Congress could give the Fed the power to, rather than just buy bonds (or whatever it is they do) introduce money to the economy simply by giving everyone money.
I understand that it is not exactly true that the rich are getting free money for nothing. But the whole reason we're talking about this here is that someone pointed out that all the new money supply from the Fed is finding its way straight to people and corporations that don't have anything better to do with it than buy assets, the prices of which continue to grow as a result, even while the GDP rate is plummeting.
Lastly, I'm totally open to the idea that someone will come along and explain to me why my idea for how the Fed should give everyone money is just not workable. If that happens, I'll be happy to have learned something useful. But it's definitely not clear to me, a priori, why it wouldn't work if it wouldn't.
>I'm totally open to the idea that someone will come along and explain to my why my idea for how the Fed should give everyone money is just not workable.
Congress has this power, and can always use it. The fed doesn't have this power, and that's because a bunch of unelected bankers aren't supposed to be making political decisions about wealth distribution.
Read up on the difference between fiscal stimulus and monetary stimulus...it's impossible to have an intelligent discussion on this subject without knowing how those things differ.
Fiscal stimulus is when the state pays money that it already has (or that it borrows for the purpose) into the private sector so that private entities will have cash and engage in spending.
Monetary stimulus is when the central bank increases the supply of money in the economy to control the value of a unit of currency as measured relative to units of goods and services, which in theory can have similar effects on people's spending behavior.
Either can be done with any degree of fairness or unfairness.
And neither necessarily has to be done by the mechanisms through which the world's governments have historically tended to do them.
I agree that I don't want a few unelected central bank officials making decisions about wealth distribution. That doesn't mean that congress can't specify a different mechanism for them to introduce money into the economy.
> Should we end small business programs because not everyone's wealthy enough to own a small business?
The job of financing ventures should be done by private parties and the banking industry, not by government, but since they are too preoccupied chasing assets with cheap money they can't be bothered to.
I'd see the problem if it worked how I've sometimes seen it described, where rich people and banks are just getting free gifts of cash, but that's not accurate.