The people who make decisions about interest rates have no authority over fiscal policy, and the people that control fiscal policy (who theoretically could cobtrol monetary policy as well) have segregated themselves from interest rate decisions in large part to avoid fears that they will monetize the debt undermining confidence im the currency.
In fact I'd prefer everything to be on-chain rather than credit rating agencies being months behind. Especially if the Fed is raising rates so quickly!
In fact, I'd prefer UBI to be phased in as an alternative to the banking system, together with corresponding taxes on negative externalities. Like this:
https://en.wikipedia.org/wiki/Carbon_fee_and_dividend
When Andrew Yang ran, I met with his campaign and made https://yang2020.app for them. I really asked them to be a TWO-issue campaign, tying the UBI to carbon taxes, but he never did that. So he didn't have a good answer to "how are we going to pay for it". And to this day, the Forward Party needs to make a good case for it.
I don't believe these kinds of things can be done at the national level, which is why I started Intercoin: https://community.intercoin.app/t/new-ubi-movement-mayors-ci...
Why was reducing rates in response to the COVID crisis a "problem"?
This "banks are victims from Fed rate policy" narrative is not accurate. A bond portfolio consisting entirely of 10-30 year hold-to-maturity securities is absolute, pure greed and insanity. Any bond manager not engaging in degenerate activity will hold a mix of bond maturities.
This is the bank equivalent of putting all your clients' money into a single stock ticker, and people are doing incredible mental gymnastics to claim that SVB was a victim of external forces
If you want to get money out of the economy, this is the opportunity to tax negative externalities, the very things you want to have less of. But the central planners instead reach for the wrong tool: raising interest rates. They should be flexing their fiscal policy muscle. It should be a tax bonanza on fossil fuels, plastic pollution, overfishing and much much more! You can solve actual environmental issues this way!
Well, when people default on their loans and can't refinance them, they'll default and that money will disappear from the economy. That's on the bank underwriters, and that's when their balance sheets deserve to go lopsided. Not because of central planners raising interest rates.
I far, far prefer a UBI to the Banking System for putting money in people's hands. An underwriter at a bank guesses whether a business will be able to repay a loan with interest over 10 years. A consumer knows whether they want to buy something today with their UBI money. I'd prefer the money enter the system via consumer choices, not underwriters at banks.
People often ask "how can we afford UBI". They don't understand how money is issued and destroyed. The banks currently issue the money with zero reserve requirements, and it's only destroyed when people can't afford to pay the loans. We could equally just ask "how can we afford the banking system?" We can afford either system, it's just a question of who gets the actual money, and I'd rather consumers make that decision. Because then it goes towards things people actually need, as opposed to making fatcats richer.