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There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creatio

by danjoc 10y ago

There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor. Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.

notahacker 10y ago
I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false. The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2 https://research.stlouisfed.org/fred2/series/M2 M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE https://research.stlouisfed.org/fred2/series/BASE QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable. It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
- danjoc 10y ago
  >The M2 growth figures are available and published by Fed sources. Sorry, typo. I meant M3. https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_publish_M3_index https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...

by danjoc 10y ago

notahacker 10y ago

I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false. The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2 https://research.stlouisfed.org/fred2/series/M2 M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE https://research.stlouisfed.org/fred2/series/BASE QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable. It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)

danjoc 10y ago
>The M2 growth figures are available and published by Fed sources. Sorry, typo. I meant M3. https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_publish_M3_index https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...