One problem with monetary policy is that new money (lowered rates) isn’t distributed evenly across the population of consumers. It’s a little like a Pachinko machine, where you drop the ball in the top and hope it ends up in a particular bucket. It only works if people spend their savings, and right now, that hasn’t been happening. In theory, their bank should be spending it for them, in the form of business to business loans, but corporate lending has been somewhat disconnected from GDP growth for some time now, if you exclude security speculation from GDP growth (which I do because security markets are supposed to cause growth, not be the growth). One result has been increasing levels of wealth disparity. We don’t need more money in the system, we need to distribute what there is more evenly (not perfectly evenly).
One problem with monetary policy is that new money (lowered rates) isn’t distributed evenly across the population of consumers. It’s a little like a Pachinko machine, where you drop the ball in the top and hope it ends up in a particular bucket. It only works if people spend their savings, and right now, that hasn’t been happening. In theory, their bank should be spending it for them, in the form of business to business loans, but corporate lending has been somewhat disconnected from GDP growth for some time now, if you exclude security speculation from GDP growth (which I do because security markets are supposed to cause growth, not be the growth). One result has been increasing levels of wealth disparity. We don’t need more money in the system, we need to distribute what there is more evenly (not perfectly evenly).
Confiscatory taxes, anyone?