Piezoe you really need to learn this subject because... when they credited 4 trillion to the member banks... those were Federal Reserve dollars created with a keystroke. Bernanke even says that and you know it. Its kind of funny that you are trying to say the federal reserve notes were tied to debt because they were used to purchase assets. You want to know why it is so funny... read you currency... it is itself a note... a debt instrument created by the Federal Reserve. It is not a debt or IOU created by an auction. This US money has not been tied to anything since 1971. What you write about it being tied to debt makes no sense --- it is debt of the Federal Reserve ab initio. It is useful because the US govt declares it to be our legal tender Again... your obfuscation of this issue is entertaining and talented. But, it is still bullshit. And please, refrain for logical fallicies using respected economic texts. let the texts speak for themselves in context... no one who wrote those books would confuse the govt selling bonds with a central bank creating money.
I believe in: A level playing field. I believe that: Every citizen should pay some taxes. I believe in: A consumption tax.
There is a very important distinction between printing and regular Treasury- Fed Operations. Bernanke was right when He said they weren't printing . But he should have stopped at that point, because he confused a lot of people when he said that what they were doing was akin to printing, but not exactly.. There is a common misconception that what the Fed was doing was the exact equivalent of printing. It wasn't. The distinction is this, and it is a very important distinction. Both printing by the Treasury and bond purchases by the Fed can by used to inject new money into the economy. Technically any time the mint, which is under the Treasury, not the Fed, turns on the presses, that's printing. But printing is not normally used to expand the money supply beyond what is justified by population, gdp growth, and destruction of old currency. Printing is not how the money supply is normally expanded and contracted. That is done by the Fed buying and selling Treasury bonds on the secondary market. Printing allows no reverse mechanism, other than, I suppose, burning money in a bonfire. However expanding the money supply by buying bonds allows the money supply to be contracted later by selling the bonds that were bought. Buying and selling Treasury bonds is just a normal everyday operation that all well managed Central banks do, and it is not called printing by economists, because it isn't printing. And it certainly is not the exact equivalent of printing. Printing to pay a government's debts is only done as a desperate measure when the government's bonds are virtually worthless. Printing leads to hyperinflation. We haven't had any hyperinflation, and if you look at the money supply during QE you will see that it was well contained. Had the Fed been doing the exact equivalent of printing, you would have seen hyperinflation! Both printing and Fed Bond buying can expand the money supply, and in that way only they are equivalent. Printing and Fed bond buying both involve the "creation of money out of thin air", as y'all like calling it, however the money "created" by the Fed is created only temporarily because when the Fed's bonds are later sold the money pumped into the economy is taken back out. I don't like to use the expression "created out of thin air", though it grabs one's attention, because it's inaccurate. Actually that's what happens if a government "prints". Then it truly does create money out of thin air. It is more accurate, and less misleading, to recognize that the Fed creates money in exchange for securities. Every dollar pumped into the economy by the Fed's bond buying is tied to debt, and therefore money supply expansion can be reversed later when the Fed's securities are sold. When money is printed, it is not tied to debt! You did not see any hyperinflation, because the Fed was NOT doing the exact equivalent of printing. If inflation heats up, the Fed can sell bonds, raise the discount rate or even increase the bank reserve requirement. And they can cool off market bubbles by increasing the margin requirement. (IMO Greenspan should have used this tool during the tech bubble, along with regulating mortgages of course.) The Fed has more than enough arrows in its quiver to handle most any situation, so long as Treasury bonds remain attractive to buyers at reasonably low interest. The Fed did not "print" despite what a thousand talking heads on talk radio say, ten thousand videos on youtube claim, or how many creatures have been sighted on Jekyll Island. None of these folks understand the difference between expanding the money supply by printing and expanding it by buying bonds.
This caught my eye. While virtually every adult citizen does pay taxes. Not all of them pay federal income tax. I suppose it is the federal income tax you meant when you said you thought every citizen should pay some taxes. Is that what you meant? If so, would it follow that every citizen should have enough income to pay at least some income tax?
I'm good with that part. Except Ben DID say what the fed is doing IS akin to printing. Your opinion is duly noted. But I'm going with the former chairman on this one.