Flat tax on cash holdings, which poor people don't have.
It's a negative tax on debt, which poor people tend to hold. It doesn't apply to assets.
Now if wages don't keep track with inflation, that's not a tax, it's an employer reducing wages.
I'm sure that's upsetting for wealthy people with investments
For the mom working 3 jobs at Macdonalds, as long as Macdonalds continues to pay an inflation linked salary, her debts being whittled away, that's great news.
Now if Macdonalds can cut salaries relative to inflation, that's a whole other problem.
Huge assumption. Wages have not kept up with inflation since the 1970’s. Know what has? Asset prices. Guess who owns stocks/gold/real estate?
Sure, having your debt reduced by 6% or whatever is good, but the government could also easily forgive all federally owned college debt and 100% reduction is certainly better than 6%. Increasing the minimum wage is another example. That would more directly benefit that mom with 3 jobs more than inflation.
Whatever your political goals are, there is likely a much more powerful tool to accomplish them than nudging the inflation rate up or down a few percentage points.
Thank you!! This is the first time I've heard someone acknowledge this since the "inflation crisis" started. Inflation is good for student debt holders.
The other thing is that costs go up. The impact of this is much greater if you are poor which could also affect your ability to actually pay the loans. One has to eat after all.
So imho, it's a lot more complicated for an individual. Sure for a corporation that borrows tens of millions for a new capital expenditure it makes debt cheaper. But that may or may not translate to someone that is poor and paying off debt.
They hoodwinked an entire generation of children into going six-figures in debt, made the high school diploma worthless etc.
Before: -HS degree -no debt -immediately start a factory job that makes enough for an average home, 2 cars, and a spouse that doesn’t work
Now: -4 year degree, delaying income in prime years -graduate with a small house-worth of debt, with no house -your new job’s earnings in real terms is barely enough to rent -your spouse has to work too -have to make one car work
The American people have been robbed of their prosperity and sold a bucket of lies.
A country? The federal reserve is run by private individuals. It is a private bank. Don't let the name fool you.
Maybe we say it is private but the government serves as the board :)
Seeing the tension over the years the Chairman, the President, and Congress implies to me that the government does not have absolute authority over the Fed.
>The Board of Governors--located in Washington, D.C.--is the governing body of the Federal Reserve System. It is run by seven members, or "governors," who are nominated by the President of the United States and confirmed in their positions by the U.S. Senate.
Not everyone who works for the Fed is appointed, but that is also true of the Supreme Court, Congress, the FBI, or any other part of the government. The leaders are political appointees and they oversee a bureaucratic system that includes many workers who are ostensibly apolitical.
>Seeing the tension over the years the Chairman, the President, and Congress implies to me that the government does not have absolute authority over the Fed.
Once again, just like the Supreme court. Both of these entities are designed to be more independent of the day-to-day political squabbles of the president and Congress.
[1] - https://www.federalreserve.gov/aboutthefed/structure-federal...
It does not only happen at the central-banking level, but it's another tool used by them. Let me give you a similar example, not directly involving central banking, from my country. Paulo Guedes is the founder of BTG Pactual bank. He goes on and funds the candidate Jair Bolsonaro for presidency. Once elected, Bolsonaro appoints Guedes to Ministry of Economy. His monetary policies decisions makes the USD/BRL go from R$3.71 to R$5.70. November/2021 comes by and pandora papers are released. We find out the dude has almost 10 million USD stashed in offshore tax-heavens. His decisions made his personal fortune grow by 14 million BRL(equivalent to 956 years of minimum wage).
This does not involve central banking directly but the idea is the same: put the financial elite in positions that allow them to make large scale decisions to grow their personal fortunes while affecting the lives of all others. It's a scam.
Your entire point rests on this premise and once we accept this premise we acknowledge the entire government is already compromised. Once that happens why does the central bank matter when everything that follows could be accomplished some other way through that already compromised government? That is my fundamental point. It isn't that the central banks don't have power. It is that a central bank's power pails in comparison to the overall government. Therefore conspiracies theories about taking over the government to gain control of the central bank don't make much sense.
I agree.
>Once that happens why does the central bank matter
I guess it matters because public awareness is necessary for us not to allow history to repeat itself. As Ford once said: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
But it is a symptom rather than a cause of the corruption. The energy spent on raising public awareness about this would likely be better served drawing attention to what we both seem to think is the underlying problem, the outsized influence that the wealthy have on the government.
There are a countless other ways a country can do this and most of those are more targeted. The tax code is the most obvious example. Inflation is a flat tax of a few percentage points. If the goal is to wield power, it is much more important to control the tax code and move the income tax from 0% (generally true before the 16th Amendment in 1913) to 91% (1954-1963) or from 91% back down to 37% (the current rate). Blaming central banking as the primary cause for these issues just doesn't make sense to me.