Re:2020 had some significant silver linings
by AnimalMuppet on Friday December 25, 2020 @12:12PM
(#25537615)
Right, and this is specifically to avoid things like hyperinflation.
Do you trust Congress to manage the money supply? I don't. I think they'd use it to buy votes rather than to do what's good for the country, and the result would be disaster.
The central bankers are hired for a fixed-term (though renewable) and are given a mandate:
> The Federal Reserve works to promote a strong U.S. economy. Specifically, the Congress has assigned the Fed to conduct the nation’s monetary policy to support the goals of maximum employment, stable prices, and moderate long-term interest rates. When prices are stable, long-term interest rates remain at moderate levels, so the goals of price stability and moderate long-term interest rates go together. As a result, the goals of maximum employment and stable prices are often referred to as the Fed’s “dual mandate.”
* https://www.federalreserve.gov/faqs/what-economic-goals-does...
If 'printing money' helps to accomplish that mandate they will do so, but they will (theoretically/ideally) not print money just because it would be convenient for political purposes.
It should also be noted that in most/may modern economies, private banks actually create the money the supply through issuing loans:
* PDF: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
Good video by Ben Felix on the topic:
* https://www.youtube.com/watch?v=K3lP3BhvnSo