Re:Disturbing Rise of Modern Monetary Theory (MMT)
by 0x8BADF00D on Monday January 21, 2019 @03:35PM
(#18963385)
> The Fed's actions jumpstarted the economy by creating this massive inequality and has left out many behind.
This should not be surprising to anyone.
Bernanke’s stated goal was to inflate asset prices through QE, so that consumers would feel an increased “wealth effect”[1] and spend more.
The lie at the root of this policy is that spending == productivity which is probably the biggest bald-faced lie ever told. We don’t call an overleveraged man with 30k in credit card debt rich or productive. That would be absurd.
Yet it is this lie that is at the root of quantitative easing and the overleveraged American economy.
[1] https://www.federalreserve.gov/newsevents/other/o_bernanke20...
Why?
1. Because there are people alive with large debts on the other side of those inflated assets. Any deflation will kill the lender (if borrower defaults) and the borrower (if the asset's value declines or they can't make any more payments)
2. There are entire populations unable to make asset purchases because assets are too expensive, thus they are left out.
The Fed's actions jumpstarted the economy by creating this massive inequality and has left out many behind.