From what I know, the government can make cash out of thin air, but this causes inflation levels to rise. Or is everything they’re giving out just their surplus?
In: Economics
1) Fed interest rates are historically low and were so even when they shouldn’t have been.
2) The money they are giving out isn’t really in excess for most people but instead just a replacement for lost income. And it is just keeping consumer spending afloat, not causing a buying boom.
3) There might be some inflation going on with food right now, also the housing market but that isn’t because of stimulus.
Interestingly some have theorized it is possible to have a system where UBI or government spending replaces Federal Reserve credit as the main way money enters the economy.
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