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This is risky, because if the fed accidentally injects too much money by buying back too many bonds, they can always un-inject it by selling the bonds back (and
by anchpop 6y ago
This is risky, because if the fed accidentally injects too much money by buying back too many bonds, they can always un-inject it by selling the bonds back (and banks are compelled to buy). This lets the fed be more aggressive because it knows that if it goes too far and starts seeing more inflation than it intended, it can always walk back its decision. But there's no realistic way to do that after having given $1000 to every adult.
- tylerhou 6y agoTaxes?
- notriddle 6y agoThe Fed can't make taxes. Congress makes taxes, but Congress is subject to popular approval, and the population don't like tax hikes.
- tylerhou 6y agoThe Fed also can't give $1000 to everyone.
- jackcosgrove 6y agoChanges in tax rates require Congress to act. Too slow moving to be a money supply control.