Was John Oliver correct in his attack on Jill Stein's use of Quatitative Easing?
Posted Oct 18, 2016, 11:33 PM UTC
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Yes. I liked his analogy "That is like saying you can make us energy independent by ordering the post office to invade Canada". Jill Stein's position literally has the same level of coherence. She doesn't even seem to understand the terms she's using or what they actually mean or what purpose they serve, and she doesn't know which parts of the government are responsible for them.
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The short answer is yes.
The long answer is that he's probably misinformed, but is substantially less misinformed than Jill Stein.
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The government does generate funds by printing money, the economic term is seigniorage. However, the government already accounts for any revenue currently generated by the quantitative easing already in place. If the government printed money to fund a specific policy this would undermine the independence of the central bank, causing inflation and potentially igniting a currency war with other nations.
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If the government printed money to fund a specific policy this would undermine the independence of the central bank, causing inflation and potentially igniting a currency war with other nations.
The Fed doesn't print money, so I'm not really sure what this means.
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The Fed controls the money supply, by expanding credit through the banking system.
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So how would the Treasury printing money to fund specific programs "undermine the independence of the central bank?"
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Well, if they minted an extra few trillon $ of coins to fund something, I think it would undermine the Central Bank. The treasury rather than the Central Bank would become the organization determining monetary policy.
EDIT: Corrected, "printed" to "minted".
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The Fed doesn't print money, so I'm not really sure what this means.
Do you not think this is being unnecessarily pedantic? It's fairly universal to describe creating base money as printing money.
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Generally, yes. But the original point was that government money printing will "undermine the independence of the central bank." But that's exactly what happens currently. They need to establish how printing money "to fund a specific policy" is somehow different than the normal, everyday printing that the government already does, from the perspective of the Fed.
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Here is the campaign's response:
Basically they admit he's right but that it's not the only option for tackling student debt.
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I saw his segment. Oliver is basically completely correct. I don't think he went far enough though on highlighting just how stupid a plan this would be.
A "bail out" for students is nothing like our bail out for banks. The US government/tax payers made a 71 billion dollar profit on the bailout. That is huge, and that is only counting TARP.
"Bailing out" students would be completely different. What are we going to do, go back a few years later and demand they pay us back everything we paid them plus 10% that amount? That is the only way I could see these scenarios potentially being similar.
In addition, what is she going to do in a decade, when new students accumulate debt just as generations before them have done? Bail them out again? Not likely. This is not a long term solution at all.
Thirdly, if the economy is at full employment as it would likely be in 2017 and especially by 2018, Stein's plan would be extremely inflationary.
Fourthly, college students are on average future middle-upper class members of society. The bail out is a giveaway to future upper-middle class people. This does not align with the ideas of income inequality at all. In addition, from a fairness perspective, is highly unfair to people over the last 20 years who have weighed the costs of college and paid off their debts like responsible adults
Also QE was never meant to bail out anything unlike TARP. It was meant to provide liquidity in the market and reduce the interest rate. Also the department that did the bail out wasn't even the Fed it was the treasury.
yea Stein lumped together QE and TARP in her "2.2 trillion bailout" so I thought I would too
Which isa fundamental flaw by her. They are two very distinctive actions taken by two very different institution. it just prove she has no idea what she is talking about. Plus IIRC the Fed money injunction into the system was for over collateralize securities that had a repayment history of something in the waters of 99%. Not the same thing as ''bailing out'' which is basically providing money to distressed asset.