Re:One way to fight a coronavirus recession: $1k for every A...
by aeternum on Monday March 16, 2020 @08:36PM
(#22600088)
I generally agree, there is significant benefit to having the central bank operate independent from government. I'm not advocating any change there.
The central bank could keep that independence but simply distribute the QE money to individuals as a one-time or traunched payment (I realize calling it a UBI is misleading as it implies it is ongoing). There should be no expectation that it is permanent or continues.
Re:One way to fight a coronavirus recession: $1k for every A...
by xyzzyz on Monday March 16, 2020 @08:43PM
(#22600154)
> The central bank could keep that independence but simply distribute the QE money to individuals as a one-time or traunched payment (I realize calling it a UBI is misleading as it implies it is ongoing). There should be no expectation that it is permanent or continues.
Right. This is a sensible (though unclear if the best) policy in context of exogenous shock. However, using this as a backdoor to introduce perpetual basic income of significant value, with some very vague hand-wavy plan how to pay for it on an ongoing basis, is rather silly, and that's what I was pointing out in parent posters.
The government could also just print itself lots of new dollars, it's even more efficient. We don't do that, because the central banks are independent from government, so QE is a roundabout way of allowing government to print more money in a way that doesn't create high inflation expectations in future.
The biggest reason we don't do such taxes though is because they would be extremely distortionary. It's super easy to evade USD cash tax: just don't hold cash, buy stocks or real estate or some other real property. The USD tax will artificially inflate those assets, while at the same time, will require new cash-denominated bonds to be have payouts indexed by inflation.