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0 pointscriddell6y ago0 comments

That seems like it would be a terrible idea. The ability to create money up until the point of inflation seems like a key tool to manage economic disasters like COVID-19.

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6 comments · 1 top-level

cwhiz6y ago· 5 in thread

There’s no inflation when the fed buys corporate bonds or bails out failed corporations. It is just propping up the market.

If the fed had given that money directly to consumers we might have inflation problems. They’ll never do that. Socialism only exists in America for corporations.

mrep6y ago

The fed cannot give directly to consumers. However, congress can and did give directly to consumers with the 1200 check, the 600 a week increase in unemployment, and indirectly by funding payroll for small businesses and the airlines. However, that created a whole lot of debt which the fed has been predominantly buying with their printed dollars as you can see in their balance sheet [0].

[0]: https://www.federalreserve.gov/releases/h41/current/h41.htm

cwhiz6y ago

The fed is legally barred from directly lending to businesses or households except for in an emergency where they can do virtually anything they want.

Congress authorizes $300 billion in direct checks to consumers. The remaining $2.7 trillion went to businesses.

The fed has separately printed several trillion dollars lending to businesses, buying corporate bonds, and other actions.

What should the stock market be at right now? Who knows. We have no way to know because we won’t allow the market to tank.

criddellOP6y ago

When there's no worries about inflation, is there a downside to the fed doing this?

MiroF6y ago

> There’s no inflation when the fed buys corporate bonds or bails out failed corporations. It is just propping up the market.

Respectfully, please read an economics textbook.

cwhiz6y ago

Trillions printed, inflation flat.

Please tell me more.

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