Tuesday, February 12, 2013

Welcome To The Club

A mostly serious person decides it's time for Ben (and his counterparts) to fire up the helicopter engines.
First, it is impossible to justify the conventional view that fiat money should operate almost exclusively via today’s system of private borrowing and lending. Why should state-created currency be predominantly employed to back the money created by banks as a byproduct of often irresponsible lending? Why is it good to support the leveraging of private property, but not the supply of public infrastructure? I fail to see any moral force to the idea that fiat money should only promote private, not public, spending.

I haven't really looked for it, but I hope one day some smart economists look at the distributional impact of the specifics of Fed quantitative easing in the age of the great recession. I'm guessing it made rich people a lot richer. All things considered I favored more fed action, but there was always another way. Fed-financed government spending and free money for all.