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> To break up elite colleges therefore, all you need to do is break up the endowments. Siphoning resources from school endowments is actually quite easy. Wow s

> To break up elite colleges therefore, all you need to do is break up the endowments. Siphoning resources from school endowments is actually quite easy. Wow straight up suggesting we steal money from private institutions to give to politicians to decide how to redistribute it. Totally insane. The government prints $40 billion like it’s nothing. We literally just handed out trillions minted out of thin air. Maybe we should let the few groups and people that managed to actually accumulate money through their own systems keep the money? Highly likely they will be more effective stewards of capital than the money printing politicians.

ajross 4y ago
> We literally just handed out trillions minted out of thin air. It's so weird to see memes like this persist. No, no we didn't. Those spending bills were financed via deficit spending: they were loans. All spending bills are loans. The treasury department raises money by selling bonds. Every deficit dollar the government spends is a dollar it takes in from some investor somewhere who wanted to park money in US treasuries. Now, that comes with interest obligations. It's not "free". If the money gets spent rapidly vs. being left in a money market fund or whatever, then it can be a Keynsian growth stimulus or an inflationary pressure (which are pretty much the same thing). But it's not just printing money! That doesn't happen. People need to stop saying that. Why do people keep repeating something that is so clearly incorrect?
- zeusk 4y ago
  Because when the Federal Reserve buys those treasuries, you're creating money out of thin air (QE).
  - codelorado 4y ago
    This comment highlights the most crucial insight on QE: it is a relatively novel monetary policy innovation that was implemented as an emergency response to the 2008 crisis on a very large scale and, as such, we had no experience using it. 14 years later, we’re finding out what it means for an economy to have the Federal Reserve buy a large amount of US debt.
    - zeusk 4y ago
      QE isn't novel by any stretch, even in 2008. The Federal Reserve had a similar program back in 1930s around the Great Depression and the Bank of Japan has had a full-swing QE program since like 2001.
      - 0des 4y ago
        It wasn't that long ago the USA confiscated gold from its citizens via President Roosevelt's Executive Order 6102 in 1933.
    - jjeaff 4y ago
      I don't think we are finding out that much. Most other countries are experiencing the same inflation we are and not all of them deficit spent a lot during the pandemic. Nor do most even have that power. Surely some of the inflation and really low unemployment is due to QE. But it's likely a lot more of it is due to an economy growing while the active workforce is shrinking and external factors like the pandemic and war in Ukraine causing supply issues.
  - jjeaff 4y ago
    Notably, it's a temporary creation. As those bonds get paid off, along with interest, the fed must either roll that money over to buy more, or simply disappear it off their balance sheet. Which is part of what they are doing now with Quantitative Tightening or QT.
- scarmig 4y ago
  Obviously* it's not printing money literally. But it's increasing the money supply. When governments deficit spend, they deposit money in private sector banks, increasing their balance sheet. The net result of this is more dollars in and flowing through the economy. Which is... printing money, pretty much. The idea that it's some kind of moral failing or inherently irresponsible is silly, but the description isn't some crazy conspiracy theory. * I'm sure some people have the idea that Jerome Powell is walking up to a printing press, turning a crank, and literally printing money. But I'm also pretty sure that no one here is under that misconception.
  - yata69420 4y ago
    > But I'm also pretty sure that no one here is under that misconception. I'm a little less sure every time I read one of these threads.
  - imtringued 4y ago
    You call it printing but it happened in response to the private sector desiring to increase its net savings which can only happen if another party goes into further debt. By this logic, saving money is printing money because the money in your bank account is taken out of circulation and stagnates on your bank account, that stagnant money is added on top of the usual supply needed to keep the economy running. This is quite literally a conspiracy theory. Don't you see how ridiculous this framing is?
- yieldcrv 4y ago
  The COVID relief bills were actually a one-time exception to a 100 year old reality. 1) Congress directly modified the Federal Reserve's charter to give money directly to private persons. 2) There were also payments directly from the US Treasury. 3) There were also things that involved that traditional convoluted process of the Treasury selling more bonds to the international market and pretending not to know that the Federal Reserve is the biggest buyer showing up. In this case, because of 1), we really did create several trillion out of thin air, from the Federal Reserve itself. Basically Congress always could, but didn't. Easiest way to accumulate dollars is to scare people into believing dollars won't be relevant. Although the US otherwise doesn't simply dilute the money supply with direct issuances for nothing, opting to primarily create dollars in exchange for corporate bonds and treasuries, there is a market tolerance and demand enough for dollars to support a much greater level of it. Disclaimer: I'm not advocating for anything.
  - jjeaff 4y ago
    What individuals did the fed give money too? The stimulus payments were paid through the US Treasury like any other congressional spending bill.
    - deleted 4y ago
      [deleted]
    - imtringued 4y ago
      Stop that, you are breaking the illusion. People want a petty conspiracy theory. People approximate this and think they can just reduce it to one government office when the truth is that literally every single participant in the economy is responsible. If I had to dumb it down I would say that the economy tries to be in balance. If the government appears to be doing one thing, it isn't alone, there are private companies and private individuals doing the complement. In macro economy it is quite common to split an economy into two asymmetric entities. You, and the rest of the economy. If you earn, they spend, if they spend you earn. If you borrow (known as printing in conspiracy theory jargon), they save (in aggregate), if they save, you borrow. Of course I am assuming that the balance is being maintained. If someone spends less than they earn, they save but if there is no net borrowing the balance is being disrupted. What happens then is deflation but that implies that the economy is in disequilibrium and must shake off some of the people earning more than they spend. It is kind of ironic that savers want deflation because in a perfect market they would get fired and wouldn't be allowed to work more which prevents them building up more savings.
- AlbertCory 4y ago
  > People need to stop saying that. Why do people keep repeating something that is so clearly incorrect? Because they have a better understanding of it than you do. The Fed buys government bonds, aka "Quantitative Easing." That is printing money. They started doing that after the 2007-8 recession, because just lowering the interest rate to zero wasn't doing enough (in their view). They didn't want to have negative interest rates like some countries did, so QE was the only choice.
  - imtringued 4y ago
    QE isn't printing money, it is a way to blend treasuries into a finely chopped liquid so that your bank can keep the asset side of its balance sheet just as liquid as it's deposits. Due to liquidity preferences people prefer liquid assets over illiquid assets and therefore demand compensation to give up liquidity. Since the yield on capital is falling, people prefer holding straight up money over investing it themselves in risk bearing assets, this means banks are being flooded with short term demand deposits that can be pulled out at any time. What QE does is effectively make all banks hold treasuries collectively. If one bank sends $1000 to another bank it doesn't have to sell treasuries at the current market rate and instead they just transfer the bank reserves which are a claim on $1000 worth of treasuries. As demand deposits become a greater share of financial capital, the risk of a bank run on a specific bank becomes higher and higher. Basically any bank is at risk of becoming instantly insolvent. The problem here is keeping excessive savings in money instead of capital.
    - AlbertCory 4y ago
      I hate to resort to cliche, but it's just so apropos here: You are missing the forest for the trees. You know all the details but none of the big picture. QE is increasing the money supply. Since you object to the pejorative "printing money" we can stop using that phrase. It's increasing the money supply.
      - ajross 4y ago
        > QE is increasing the money supply. So are home mortgages. So is giving your brother $200 to make rent. So is buying the AR-15 you've been saving for. The money supply is elastic, and responds to economic activity. Harnessing that truth as an engine of growth is the fundamental insight of modern economics.[1] The contention upthread was some ridiculous hyperbole about "minting dollars out of thin air", and the truth is that... nothing of the sort is happening. At all. [1] And by extension, arguing against it piecewise like this is tantamount to demanding we all go back to a barter economy backed by hoarded treasure.
rgrieselhuber 4y ago
How much have those endowments grown through tuitions paid (and increased) by the growth of student loan debt? If there is to be loan forgiveness, it should be paid back from the endowments.
- ryan93 4y ago
  The endowments would run out instantly. And you would destroy great research institutions. Some people just enjoy destruction
  - rgrieselhuber 4y ago
    It’s not about destruction but equity. Tax-funded student loans should not be used to grow endowments and should be sequestered. Let donors fund the endowments if they care about the research institutions. Return the people’s money to the people.
    - Jtype 4y ago
      Take an economics course.
      - rgrieselhuber 4y ago
        Which economics course explains the workings of endowment funds at elite schools and the flow of money from student loans?
    - ryan93 4y ago
      Donors do fund endowments. The schools most dependent on tuition have very small endowments. You don’t seem to know anything about this
      - rgrieselhuber 4y ago
        Are you saying that no tuition backed by student loans ends up in endowment funds?
imtringued 4y ago
I honestly don't understand this colloquial language of "printing money" just call it what it is, borrowing money or just plain old debt. There is no need for secret ingroup language or additional indirection, there is no conspiracy here. The real world is more boring than you think. The government borrowed money and increased its debts by trillions of dollars, that alone is insane enough, there is no need for some mythical "money printing" that is supposed to be the last straw that breaks the camels back.
- seibelj 4y ago
  However you want to phrase it, politicians can pass a bill and get $2 trillion to hand out instantly. They don't need to seize money from private institutions and billionaires to fund their waste.

ajross 4y ago

> We literally just handed out trillions minted out of thin air. It's so weird to see memes like this persist. No, no we didn't. Those spending bills were financed via deficit spending: they were loans. All spending bills are loans. The treasury department raises money by selling bonds. Every deficit dollar the government spends is a dollar it takes in from some investor somewhere who wanted to park money in US treasuries. Now, that comes with interest obligations. It's not "free". If the money gets spent rapidly vs. being left in a money market fund or whatever, then it can be a Keynsian growth stimulus or an inflationary pressure (which are pretty much the same thing). But it's not just printing money! That doesn't happen. People need to stop saying that. Why do people keep repeating something that is so clearly incorrect?

zeusk 4y ago
Because when the Federal Reserve buys those treasuries, you're creating money out of thin air (QE).
- codelorado 4y ago
  This comment highlights the most crucial insight on QE: it is a relatively novel monetary policy innovation that was implemented as an emergency response to the 2008 crisis on a very large scale and, as such, we had no experience using it. 14 years later, we’re finding out what it means for an economy to have the Federal Reserve buy a large amount of US debt.
  - zeusk 4y ago
    QE isn't novel by any stretch, even in 2008. The Federal Reserve had a similar program back in 1930s around the Great Depression and the Bank of Japan has had a full-swing QE program since like 2001.
    - 0des 4y ago
      It wasn't that long ago the USA confiscated gold from its citizens via President Roosevelt's Executive Order 6102 in 1933.
  - jjeaff 4y ago
    I don't think we are finding out that much. Most other countries are experiencing the same inflation we are and not all of them deficit spent a lot during the pandemic. Nor do most even have that power. Surely some of the inflation and really low unemployment is due to QE. But it's likely a lot more of it is due to an economy growing while the active workforce is shrinking and external factors like the pandemic and war in Ukraine causing supply issues.
- jjeaff 4y ago
  Notably, it's a temporary creation. As those bonds get paid off, along with interest, the fed must either roll that money over to buy more, or simply disappear it off their balance sheet. Which is part of what they are doing now with Quantitative Tightening or QT.
scarmig 4y ago
Obviously* it's not printing money literally. But it's increasing the money supply. When governments deficit spend, they deposit money in private sector banks, increasing their balance sheet. The net result of this is more dollars in and flowing through the economy. Which is... printing money, pretty much. The idea that it's some kind of moral failing or inherently irresponsible is silly, but the description isn't some crazy conspiracy theory. * I'm sure some people have the idea that Jerome Powell is walking up to a printing press, turning a crank, and literally printing money. But I'm also pretty sure that no one here is under that misconception.
- yata69420 4y ago
  > But I'm also pretty sure that no one here is under that misconception. I'm a little less sure every time I read one of these threads.
- imtringued 4y ago
  You call it printing but it happened in response to the private sector desiring to increase its net savings which can only happen if another party goes into further debt. By this logic, saving money is printing money because the money in your bank account is taken out of circulation and stagnates on your bank account, that stagnant money is added on top of the usual supply needed to keep the economy running. This is quite literally a conspiracy theory. Don't you see how ridiculous this framing is?
yieldcrv 4y ago
The COVID relief bills were actually a one-time exception to a 100 year old reality. 1) Congress directly modified the Federal Reserve's charter to give money directly to private persons. 2) There were also payments directly from the US Treasury. 3) There were also things that involved that traditional convoluted process of the Treasury selling more bonds to the international market and pretending not to know that the Federal Reserve is the biggest buyer showing up. In this case, because of 1), we really did create several trillion out of thin air, from the Federal Reserve itself. Basically Congress always could, but didn't. Easiest way to accumulate dollars is to scare people into believing dollars won't be relevant. Although the US otherwise doesn't simply dilute the money supply with direct issuances for nothing, opting to primarily create dollars in exchange for corporate bonds and treasuries, there is a market tolerance and demand enough for dollars to support a much greater level of it. Disclaimer: I'm not advocating for anything.
- jjeaff 4y ago
  What individuals did the fed give money too? The stimulus payments were paid through the US Treasury like any other congressional spending bill.
  - deleted 4y ago
    [deleted]
  - imtringued 4y ago
    Stop that, you are breaking the illusion. People want a petty conspiracy theory. People approximate this and think they can just reduce it to one government office when the truth is that literally every single participant in the economy is responsible. If I had to dumb it down I would say that the economy tries to be in balance. If the government appears to be doing one thing, it isn't alone, there are private companies and private individuals doing the complement. In macro economy it is quite common to split an economy into two asymmetric entities. You, and the rest of the economy. If you earn, they spend, if they spend you earn. If you borrow (known as printing in conspiracy theory jargon), they save (in aggregate), if they save, you borrow. Of course I am assuming that the balance is being maintained. If someone spends less than they earn, they save but if there is no net borrowing the balance is being disrupted. What happens then is deflation but that implies that the economy is in disequilibrium and must shake off some of the people earning more than they spend. It is kind of ironic that savers want deflation because in a perfect market they would get fired and wouldn't be allowed to work more which prevents them building up more savings.
AlbertCory 4y ago
> People need to stop saying that. Why do people keep repeating something that is so clearly incorrect? Because they have a better understanding of it than you do. The Fed buys government bonds, aka "Quantitative Easing." That is printing money. They started doing that after the 2007-8 recession, because just lowering the interest rate to zero wasn't doing enough (in their view). They didn't want to have negative interest rates like some countries did, so QE was the only choice.
- imtringued 4y ago
  QE isn't printing money, it is a way to blend treasuries into a finely chopped liquid so that your bank can keep the asset side of its balance sheet just as liquid as it's deposits. Due to liquidity preferences people prefer liquid assets over illiquid assets and therefore demand compensation to give up liquidity. Since the yield on capital is falling, people prefer holding straight up money over investing it themselves in risk bearing assets, this means banks are being flooded with short term demand deposits that can be pulled out at any time. What QE does is effectively make all banks hold treasuries collectively. If one bank sends $1000 to another bank it doesn't have to sell treasuries at the current market rate and instead they just transfer the bank reserves which are a claim on $1000 worth of treasuries. As demand deposits become a greater share of financial capital, the risk of a bank run on a specific bank becomes higher and higher. Basically any bank is at risk of becoming instantly insolvent. The problem here is keeping excessive savings in money instead of capital.
  - AlbertCory 4y ago
    I hate to resort to cliche, but it's just so apropos here: You are missing the forest for the trees. You know all the details but none of the big picture. QE is increasing the money supply. Since you object to the pejorative "printing money" we can stop using that phrase. It's increasing the money supply.
    - ajross 4y ago
      > QE is increasing the money supply. So are home mortgages. So is giving your brother $200 to make rent. So is buying the AR-15 you've been saving for. The money supply is elastic, and responds to economic activity. Harnessing that truth as an engine of growth is the fundamental insight of modern economics.[1] The contention upthread was some ridiculous hyperbole about "minting dollars out of thin air", and the truth is that... nothing of the sort is happening. At all. [1] And by extension, arguing against it piecewise like this is tantamount to demanding we all go back to a barter economy backed by hoarded treasure.

rgrieselhuber 4y ago

How much have those endowments grown through tuitions paid (and increased) by the growth of student loan debt? If there is to be loan forgiveness, it should be paid back from the endowments.

ryan93 4y ago
The endowments would run out instantly. And you would destroy great research institutions. Some people just enjoy destruction
- rgrieselhuber 4y ago
  It’s not about destruction but equity. Tax-funded student loans should not be used to grow endowments and should be sequestered. Let donors fund the endowments if they care about the research institutions. Return the people’s money to the people.
  - Jtype 4y ago
    Take an economics course.
    - rgrieselhuber 4y ago
      Which economics course explains the workings of endowment funds at elite schools and the flow of money from student loans?
  - ryan93 4y ago
    Donors do fund endowments. The schools most dependent on tuition have very small endowments. You don’t seem to know anything about this
    - rgrieselhuber 4y ago
      Are you saying that no tuition backed by student loans ends up in endowment funds?

imtringued 4y ago

I honestly don't understand this colloquial language of "printing money" just call it what it is, borrowing money or just plain old debt. There is no need for secret ingroup language or additional indirection, there is no conspiracy here. The real world is more boring than you think. The government borrowed money and increased its debts by trillions of dollars, that alone is insane enough, there is no need for some mythical "money printing" that is supposed to be the last straw that breaks the camels back.

seibelj 4y ago
However you want to phrase it, politicians can pass a bill and get $2 trillion to hand out instantly. They don't need to seize money from private institutions and billionaires to fund their waste.