On Jun 20, 2013, at 2:47 PM, Julio Huato <[email protected]> wrote:
> Doug wrote: > >> I'd say, "We're done here. We need fiscal policy." > > Not sure. One of the legally-mandated goals of the Fed is full > employment. I'm no expert in the legal aspects of Fed policymaking, > but I'm sure loopholes could be found that -- with due creativity -- > would permit the Fed to hand cash directly (or almost so) to > communities, working people, municipalities, etc. If the Fed can buy > 1 trillion USD in mortgage-backed securities, then it could in > principle be able to buy securities issued by the City of Detroit or > the Boro of Brooklyn or financial vehicles created by them ex > professo. If these measures were obstructed politically, then the Fed > could respond politically demanding publicly that Congress grants it > the legal instruments to implement said goal. If the political > actions by the Fed were to be blocked, then we could all resign in > protest. It could do these things, sure. But the point of buying MBS's etc. was to support their value and keep interest rates down. I want to shift resources from elite private consumption to nonelite consumption and public investment. For that, I'd say fiscal policy is the way to go - partly debt-, and partly tax-financed. The gov should take away with one hand and give to the other. Having a central bank do these things is a way to avoid the struggle over the allocation of resources. Doug _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
