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So I had a thought and wondered /biz/ thought of it
First ignore errors on the exact working of the Fed because this post will get somethings wrong
How would the economy respond to:
>The Fed simply creating enough money to finance the government for a year. Assume a debt free exchange of money creation
>This would be done instead of QE programs that have currently cost over the total Federal Budget for a years operation
>No taxes would be collected this year, everything would be financed by this monetary expansion
Now obviously inflation would be an issue, but the monetary supply is already expanded by similar amounts with QE. So in my mind it would simply be shifting already possibly occurring inflation into a form that allows no taxes for a year. This would eliminate all DWL for a year and allow an economy with no tax but all benefit to exist for at least a year. Would this create effective growth?
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>>1573477
Nigga almost got his neck snapped.
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>>1573508
Yeah he and his friend are retarded
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>>1573477
>>The Fed simply creating enough money to finance the government for a year. Assume a debt free exchange of money creation
What is their incentive. If they start doing retarded arbitrary shit like this more people might realize the whole thing is a scam.
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>>1573523
Well the goal of the fed is maximize employment and in theory help the economy. So if they are able to purchase enough bonds in larger amounts than the entire Federal budget's cost in the hope of accomplishing this goal, why not try the same with eliminating the need for taxation for a year and see the results? Surely the abscence of tax for a year could more directly accomplish the goal of stablizing the economy or creating growth
On the scam point thats another issue
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>>1573534
What would the effect be of 4 trillion worth of inflation? Would it outweigh the benefits? I think it wouldn't.
And what about states with sales tax vs those without? Or even the differences on a state by state basis?
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>>1573540
So you weigh taxation better than potential inflation
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>>1573546
It's not "potential" inflation, it is inflation.
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>>1573549
Fair enough. So the inflation is worse than the taxation on economic health, or net equal making it have no gain
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>>1573555
I think the devaluation of the USD would be worse than the benefits for the average person, but I really don't know, I'm not an economist.
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