Re:The rich get richer and rates get lower
by onlyrealcuzzo on Thursday September 02, 2021 @09:06AM
(#28391558)
But the government can almost literally print money and did this time.
If the government sends people stimulus checks, pays for that with deficit spending, and that debt is monetized by the Fed purchasing it...
You had money that did not exist, that the Fed created on its spreadsheet to buy Treasuries to finance the Federal government... Sending people checks, unemployment, and businesses paycheck protection.
AFAIK, this was >$2T of the Federal Reserve's ~$7T balance sheet increase (~30%).
In normal times, the Federal government deficit spends, but the Federal Reserve's balance sheet does not increase to finance that.
Although the deficit is not paid for by taxes, the money created is not coming from the Federal Reserve.
If the government sends people stimulus checks, pays for that with deficit spending, and that debt is monetized by the Fed purchasing it...
You had money that did not exist, that the Fed created on its spreadsheet to buy Treasuries to finance the Federal government... Sending people checks, unemployment, and businesses paycheck protection.
AFAIK, this was >$2T of the Federal Reserve's ~$7T balance sheet increase (~30%).
In normal times, the Federal government deficit spends, but the Federal Reserve's balance sheet does not increase to finance that.
Although the deficit is not paid for by taxes, the money created is not coming from the Federal Reserve.
In this case, almost all of it did.