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>People who decry central banks managing the supply of money seem only to have one, bad argument, "intuitively, money is a commodity and printing dilutes its va

>People who decry central banks managing the supply of money seem only to have one, bad argument, "intuitively, money is a commodity and printing dilutes its value" -- well money is not a commodity. No. I'm saying inflation through money printing is mathematically equivalent to taxation, as it causes the same level of loss in buying power. Since one of these is more transparent in what is actually happening (taxation), that one should be used. Additionally money printing largely affects people who hold cash which is primarily poor people. Anyone who has money invested in the marked will not be affected. Taxation can be applied selectively. Money printing is effectively a hidden tax (thus not gaining the unpopularity it deserves), which selectively favours the rich, to which a better - or at least more honest - approach exists. Not to mention that money printing is controlled by people who were never elected and have no mandate from the electorate.

mjburgess 4y ago
It's not a dilution of value when the risk is deflation; and at zero-inflation, it's not a tax because it encourages growth by investment. So it's only a "tax" if it (1) causes inflation to rise; and (2) rise above the level which promotes growth. Neither of those conditions obviously obtains in the era of QE. Indeed, (1) never did.
- nwienert 4y ago
  You’ve made up three things, each without convincing rhetoric let alone evidence, and then put QED at the end.
  - mjburgess 4y ago
    I presume I'm speaking to a person who understands the evidence for each, and that the argument is about how one frames QE. There are videos, no doubt, if you want to understand why a positive rate of inflation promotes growth, and hence why central banks are legally obligated to "print money" to ensure a 2% target. The relevant disagreement here, I think, isn't the basic economics. Its under what conditions the "'deliberate' inflation = tax" view is correct. Since it is correct under some conditions. I'd dispute that it accurately describes the last decade of central bank policy, which on the whole, seems fairly successful at avoiding a post-crash depresson, and a post-pand. depression.... Both seem highly implausible feats done via taxation.

mjburgess 4y ago

It's not a dilution of value when the risk is deflation; and at zero-inflation, it's not a tax because it encourages growth by investment. So it's only a "tax" if it (1) causes inflation to rise; and (2) rise above the level which promotes growth. Neither of those conditions obviously obtains in the era of QE. Indeed, (1) never did.

nwienert 4y ago
You’ve made up three things, each without convincing rhetoric let alone evidence, and then put QED at the end.
- mjburgess 4y ago
  I presume I'm speaking to a person who understands the evidence for each, and that the argument is about how one frames QE. There are videos, no doubt, if you want to understand why a positive rate of inflation promotes growth, and hence why central banks are legally obligated to "print money" to ensure a 2% target. The relevant disagreement here, I think, isn't the basic economics. Its under what conditions the "'deliberate' inflation = tax" view is correct. Since it is correct under some conditions. I'd dispute that it accurately describes the last decade of central bank policy, which on the whole, seems fairly successful at avoiding a post-crash depresson, and a post-pand. depression.... Both seem highly implausible feats done via taxation.