On printing money and hoping


Via The Cobden Centre, a good article by Liam Halligan, Policy makers must do more than print money and hope for the best:

Quantitative easing might seem the easiest option but it is storing up major problems for the future.

Now, the Western world’s policy response amounts to printing money and heaping debts upon debts, while shoving the banking sector’s losses on to the general public – and, particularly, their children and grandchildren. This is perhaps the most systematic act of inter-generational theft the world has ever seen. But that’s not the point – at least for now. The point for now is that QE and the related fiscal boosts simply are not working.

Serendipitously, I just gave my Cobden Radio interview, explaining that QE and credit expansion in excess of real savings makes more trouble for the future, creating economic structures which must come to an end, not sustainable prosperity.

The good news is that while Liam can write this:

As Simon Johnson has written: “The finance industry has effectively captured our government – and recovery will fail unless we break the financial oligarchy that is blocking essential reform.” Strong words from a former chief economist of the International Monetary Fund – but no less true for that.

There is a bill making its way through Parliament which points the way to serious reform. Douglas Carswell’s financial reform bill has its second reading on 19 November.

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