That may be true but I still think we're headed for a big correction in education long term, both economically and in terms of cultural influence.
The moment the money enters the teachers account it is no longer taxpayer money. The same is the case for the university. How they spend the tuitions is entirely upto them.
The government borrowed money and increased its debts by trillions of dollars, that alone is insane enough, there is no need for some mythical "money printing" that is supposed to be the last straw that breaks the camels back.
It's so weird to see memes like this persist. No, no we didn't.
Those spending bills were financed via deficit spending: they were loans. All spending bills are loans. The treasury department raises money by selling bonds. Every deficit dollar the government spends is a dollar it takes in from some investor somewhere who wanted to park money in US treasuries.
Now, that comes with interest obligations. It's not "free". If the money gets spent rapidly vs. being left in a money market fund or whatever, then it can be a Keynsian growth stimulus or an inflationary pressure (which are pretty much the same thing).
But it's not just printing money! That doesn't happen. People need to stop saying that. Why do people keep repeating something that is so clearly incorrect?
Which is... printing money, pretty much. The idea that it's some kind of moral failing or inherently irresponsible is silly, but the description isn't some crazy conspiracy theory.
* I'm sure some people have the idea that Jerome Powell is walking up to a printing press, turning a crank, and literally printing money. But I'm also pretty sure that no one here is under that misconception.
I'm a little less sure every time I read one of these threads.
Because they have a better understanding of it than you do.
The Fed buys government bonds, aka "Quantitative Easing." That is printing money. They started doing that after the 2007-8 recession, because just lowering the interest rate to zero wasn't doing enough (in their view). They didn't want to have negative interest rates like some countries did, so QE was the only choice.
You are missing the forest for the trees. You know all the details but none of the big picture.
QE is increasing the money supply. Since you object to the pejorative "printing money" we can stop using that phrase. It's increasing the money supply.
So are home mortgages. So is giving your brother $200 to make rent. So is buying the AR-15 you've been saving for. The money supply is elastic, and responds to economic activity. Harnessing that truth as an engine of growth is the fundamental insight of modern economics.[1]
The contention upthread was some ridiculous hyperbole about "minting dollars out of thin air", and the truth is that... nothing of the sort is happening. At all.
[1] And by extension, arguing against it piecewise like this is tantamount to demanding we all go back to a barter economy backed by hoarded treasure.
Unfortunately for you, "printing money" is a meme that sticks.
[1] Magical Monetary Thinking
Surely some of the inflation and really low unemployment is due to QE. But it's likely a lot more of it is due to an economy growing while the active workforce is shrinking and external factors like the pandemic and war in Ukraine causing supply issues.
1) Congress directly modified the Federal Reserve's charter to give money directly to private persons.
2) There were also payments directly from the US Treasury.
3) There were also things that involved that traditional convoluted process of the Treasury selling more bonds to the international market and pretending not to know that the Federal Reserve is the biggest buyer showing up.
In this case, because of 1), we really did create several trillion out of thin air, from the Federal Reserve itself. Basically Congress always could, but didn't. Easiest way to accumulate dollars is to scare people into believing dollars won't be relevant.
Although the US otherwise doesn't simply dilute the money supply with direct issuances for nothing, opting to primarily create dollars in exchange for corporate bonds and treasuries, there is a market tolerance and demand enough for dollars to support a much greater level of it. Disclaimer: I'm not advocating for anything.
People approximate this and think they can just reduce it to one government office when the truth is that literally every single participant in the economy is responsible. If I had to dumb it down I would say that the economy tries to be in balance. If the government appears to be doing one thing, it isn't alone, there are private companies and private individuals doing the complement.
In macro economy it is quite common to split an economy into two asymmetric entities. You, and the rest of the economy. If you earn, they spend, if they spend you earn.
If you borrow (known as printing in conspiracy theory jargon), they save (in aggregate), if they save, you borrow. Of course I am assuming that the balance is being maintained. If someone spends less than they earn, they save but if there is no net borrowing the balance is being disrupted. What happens then is deflation but that implies that the economy is in disequilibrium and must shake off some of the people earning more than they spend. It is kind of ironic that savers want deflation because in a perfect market they would get fired and wouldn't be allowed to work more which prevents them building up more savings.
In any case, I think I was incorrect about the nature of the direct lending program, here is the report from Congress about the CARES Act (the first pandemic relief bill) and how its "expanding the Fed’s traditional role beyond lender of last resort to the banking system and even beyond the more expansive role it took in the 2007-2009 financial crisis"
Its really not a simple "treasury does this, federal reserve does that"
These programs are not handouts, they are loans. The Fed did this in 2008 when they bought bonds and even stock in some big companies.
Overall, the Fed made a big profit on all of that when the bonds were paid back with interest and the stock was sold back in tranches over time as the market recovered.
Disagree that QE-2020 was a "one-time event." I can think back 13 years to 2009 and recall both monetary and fiscal stimulus to provide post-2008 relief.
Wow straight up suggesting we steal money from private institutions to give to politicians to decide how to redistribute it. Totally insane.
The government prints $40 billion like it’s nothing. We literally just handed out trillions minted out of thin air. Maybe we should let the few groups and people that managed to actually accumulate money through their own systems keep the money? Highly likely they will be more effective stewards of capital than the money printing politicians.