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re: Hedge fund manager Daniel J. Arbess calls for direct money printing to Treasury
Posted on 5/20/13 at 10:43 am to el duderino III
Posted on 5/20/13 at 10:43 am to el duderino III
quote:
I still dont understand how funding only the tax cuts would have enough of an impact on the money supply to not have to augment it with OMO's though.
Really? The U.S. takes in over $2.5 trillion in taxes a year. Pumping hundreds of billions of dollars ex nihilo into the economy every year would definitely have a huge impact on consumer prices.
I'm not saying that rate cuts wouldn't still be in order, but it would be rate cuts from 6% to 2.5% rather than from 6% to 0.5%. There's a huge difference there.
1
Posted on 5/20/13 at 8:18 pm to Doc Fenton
Oh ok I see why I was confused now. I was thinking of the tax cut amount relative to base money instead of M1 or M2. I was like, ok the fed jacked up the MB by over a trillion immediately following the 08 crisis, 5% or so of a few trillion...does not equal a trillion.
But yeah, now that I understand it, that does seem like it would be much more effective than ZIRP. Interesting stuff.
But yeah, now that I understand it, that does seem like it would be much more effective than ZIRP. Interesting stuff.
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