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Economists talk about having two main tools: monetary and fiscal policies. Traditionally monetary policy is driven by the Fed and fiscal policy is driven by the
by guelo 9y ago
Economists talk about having two main tools: monetary and fiscal policies. Traditionally monetary policy is driven by the Fed and fiscal policy is driven by the government, this disconnect means that the two can work at cross-purposes, such as when the Fed is raising rates while the government is talking about boosting the economy with business tax cuts.
In reality the state has basically unlimited power to affect the economy, but it chooses to limit what levers are allowed to be used in order to provide stability and confidence. And also out of morality-driven ideology of the same sort the that gave rise to Bitcoin.