Quantitative Easing. QE. I assume readers are familiar with this aspect of Mugabenomics. A turgid term for an elementary concept. Wherein the Federal Reserve Board (FRB) purchases treasury and mortgage-backed bonds from banks with “money” conjured from its own electronic printing press. This depresses interest rates, raises bond prices, sanctifies bank balance sheets and, reportedly, stimulates The Economy.
It is also a means of openly monetizing the national debt while surreptitiously enriching the banks. Those few of us who are not having our underwater assets purchased at par may think of it in more prosaic terms: a tax.
Here’s some context. Even after two “taperings” the FRB is purchasing securities at a rate of $780 billion/year. This is down from the prior rate of $1,020 billion. A thousand twenty billion. That’s an odd sounding figure. Perhaps “one trillion” will more tenderly caress the ear. In comparison, the whole of present federal spending is $3.5 trillion/year. So an equivalent 22% of federal expenditures are financed entirely by immaculate inception.
Well why not 100%? The FRB could simply quadruple QE to cover the tab and eliminate federal taxation entirely. And if so, do you think that’s free government you’re smelling?
But to add a final con to this text, how far would one have to recede into the primordial mists before reaching a time when current QE would have accommodated the entire federal apparatus without any supplemental taxation? That is, when the government would simply be printing every dollar used to pay for all operations. Well that was very long ago indeed. An epoch the archeologists call…1983.
But dollars aren’t the only item America is printing. We can boast of growth in all key metrics.
And perhaps most importantly…
Printed debt, printed citizens, printed dispossession, on a printed dollar…Printed profits, printed plutocrats, printed strife, and printed squalor. This is your Kakistocracy.