Open market operations are okay but currency and bonds are fairly interchangeable. The government does not need the banking system to create money: in a fiat system, it can print all we need.
In a fiat-money system, governments have the capacity to pursue full employment and price stability at all times by endeavouring to keep the budget deficit in line with non-government net saving intentions. The practice of issuing government debt in such a system is a meaningless exercise, and choosing to focus on government debt as a policy target at the expense of full employment amounts to behaving as if the government is operating under a commodity-backed monetary regime and faces the same socially destructive constraints.
Parable of a Monetary Economy | heteconomist.com
No comments:
Post a Comment