Yes, which is why I am trying to discuss the effects of different government policies. Stopping at "the problem is government" only makes sense if you're taking a principled approach of rejecting all government intervention, which you're not doing. Your argument is framed as if it's coming from that position, but you've been skipping criticism of the largest source of monetary creation which is why I've been saying you've been giving it a pass.
> I think it's wrong to take that for granted.
This is literally just a pillar of the Federal Reserve's explicit mandate. If monetary inflation from the deficit isn't high enough to create the target price inflation, then the Fed steps in and lowers interest rates to create enough monetary inflation to make up the difference.
> If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on.
Okay, thank you for finally expressing a judgement between different government interventions for creating price inflation. I completely disagree with your statement (I'd say that giving new money to "banking endeavors" mostly just goes to driving up the leveraged-everything bubble). But at least now that you've actually made the argument explicitly (rather than having it be implicit from a whole host of unvisited assumptions), we can even just agree to disagree.
>If monetary inflation from the deficit isn't high enough to create the target price inflation, then the Fed steps in and lowers interest rates to create enough monetary inflation to make up the difference.
The Fed does more than just this of course. You also have cause and effect mixed up. By the act of manipulating the bond market and dumping money into the economy, the Fed lowers interest rates. The target is stated in terms of rates but it is not the case that the rates increase money supply. If the rates were lowered through natural market activity, there would be no consequent effect on the money supply.
>Okay, thank you for finally expressing a judgement between different government interventions for creating price inflation.
I think you're splitting hairs. The government has limited control over inflation, because of its spending obligations. They cannot arbitrarily limit inflation without bankrupting themselves. But inflation is an onerous tax on everyone, and the idea that we "need" inflation is preposterous. It would be better to have a stable unit of currency and to let prices fall as necessary. This phenomenon reflects the reality of supply and demand, and facilitates effective financial planning by individuals and businesses. Inflation, even under the pretense of "price stability" aka money evaporating 2 to 10 percent per year, is not helpful in the slightest. It penalizes savers and the poor to benefit people who make bad investments and waste resources.
Although I am kind of an expert on all of this, having studied it for several years now in depth, I don't have time to argue with people about such things on HN at the moment. I just want to encourage you to question what you've been told about the necessity of inflationary policies over sound money, and the actual reason our government keeps imposing this inflation tax on people. It's covering up for its own dysfunction, not trying to help you. Government spending and other fiscal programs caused most bubbles we've seen in our lifetimes. Everything... College debt, real estate bubbles, multiple stock market bubbles. The Fed likely caused or at least prolonged the Great Depression by trying to buy all the gold from people, then tried to profit from it by increasing the price artificially. The whole point of that exercise was to enrich the government and certain insiders while establishing a precedent that the government can do whatever the fuck it wants, regardless of what the Constitution says about property rights or what can or can't be used as money.
Yes, which is why I am trying to discuss the effects of different government policies. Stopping at "the problem is government" only makes sense if you're taking a principled approach of rejecting all government intervention, which you're not doing. Your argument is framed as if it's coming from that position, but you've been skipping criticism of the largest source of monetary creation which is why I've been saying you've been giving it a pass.
> I think it's wrong to take that for granted.
This is literally just a pillar of the Federal Reserve's explicit mandate. If monetary inflation from the deficit isn't high enough to create the target price inflation, then the Fed steps in and lowers interest rates to create enough monetary inflation to make up the difference.
> If the Federal Reserve issues credit for worthwhile private banking endeavors, it is much more likely to be productive than anything the government spends money on.
Okay, thank you for finally expressing a judgement between different government interventions for creating price inflation. I completely disagree with your statement (I'd say that giving new money to "banking endeavors" mostly just goes to driving up the leveraged-everything bubble). But at least now that you've actually made the argument explicitly (rather than having it be implicit from a whole host of unvisited assumptions), we can even just agree to disagree.