Re:FDIC set to take First Republic Bank into receivership
by jtbayly on Saturday April 29, 2023 @11:25AM
(#35753802)
So what are the arguments for why not to just print as much money as the government needs?
If many people believe printing trillions of dollars doesn’t matter, then I’d like to hear why. I’d like to not have taxes…
Re:FDIC set to take First Republic Bank into receivership
by closeparen on Saturday April 29, 2023 @12:01PM
(#35754156)
The government needs money to buy goods and services. Extra cash chasing the same pool of goods and services is definitely inflationary.
It also needs money to do weird, dark magic with bank balance sheets so that businesses can continue to acquire the capital to maintain and grow the supply of goods and services. It’s less clear what extra money sloshing around the financial system does. In the post-2008 era, people were freaking out about it not doing enough.
- The nominal quantity of money ("print trillions of dollars")
- Aggregate demand ("buy everything in the world")
- The velocity of money ("give each resident a million dollars a month")
Increases in the quantity * velocity of money drive inflation in the long run: prices do not equilibrate immediately but have to be dragged up (or not, as the case may be) by supply and demand.