Author: George Selgin
Thanks to crisis-era changes to its operating procedures, the Fed now enjoys practically unlimited powers of quantitative easing (QE): it can buy as many assets as it likes while still controlling inflation. So far, QE has been a weapon for combating recession. But if certain politicians have their way, the Fed may be forced to use it not for macroeconomic purposes but to finance backdoor spending. That’s The Menace of Fiscal QE.
In his brief study, George Selgin reviews the movement favoring fiscal QE, shows how it threatens both the Fed’s independence and democratic control of government spending, and counters claims that it offers a low-cost means for financing such spending.
