"tackling inflation would be easier if the Fed could pull money out of people’s checking accounts"
The Fed can't do this, but the Feds certainly could, through the mechanism of a wealth tax or raising marginal rates. Your entire argument (which I certainly agree with) offers robust support for managing the economy more through direct fi…
"tackling inflation would be easier if the Fed could pull money out of people’s checking accounts"
The Fed can't do this, but the Feds certainly could, through the mechanism of a wealth tax or raising marginal rates. Your entire argument (which I certainly agree with) offers robust support for managing the economy more through direct fiscal transfers and taxation; much less through the Fed and rates; and not at all through QE. Replace modern monetary policy with old-school fiscal policy, in other words.
Taxation is the opposite of stimulus - if stimulus is a contributor to inflation than taxation would be a helpful way out. The trouble of course is that politics doesn't necessarily abide by those rules. Ideally, the Fed is the "adult in the room" that doesn't have to bow to political pressure and can to the unpopular things when necessary.
The Fed's job is easier if fiscal policy is rowing in the same direction.
"tackling inflation would be easier if the Fed could pull money out of people’s checking accounts"
The Fed can't do this, but the Feds certainly could, through the mechanism of a wealth tax or raising marginal rates. Your entire argument (which I certainly agree with) offers robust support for managing the economy more through direct fiscal transfers and taxation; much less through the Fed and rates; and not at all through QE. Replace modern monetary policy with old-school fiscal policy, in other words.
Taxation is the opposite of stimulus - if stimulus is a contributor to inflation than taxation would be a helpful way out. The trouble of course is that politics doesn't necessarily abide by those rules. Ideally, the Fed is the "adult in the room" that doesn't have to bow to political pressure and can to the unpopular things when necessary.
The Fed's job is easier if fiscal policy is rowing in the same direction.