The Menace of Fiscal QE
As the Federal Reserve struggles to fulfill its mandate in a low-interest rate world, it faces another challenge: new threats to its hard-won independence. Due to crisis-era changes to its procedures, the Fed now enjoys practically unlimited powers of quantitative easing: it can buy all the assets it likes while still controlling inflation. The Menace of Fiscal QE is a systematic study that shows how it threatens both the Fed’s independence and democratic control of government spending. Finally, this book proposes a way to rule-out fiscal QE without limiting the Fed’s ability to counter slumps.
Praise for The Menace of Fiscal QE
"While monetary and fiscal policy can be coordinated and conscious of one another, conflating the two would be perilous--for our economy and our democracy. In The Menace of Fiscal QE, George Selgin explains why. You should read and heed his warning."
— Peter R. Fisher, former undersecretary of the U.S. Treasury
"A fascinating critical overview of an idea that is gaining traction left, right, and center."
— Peter Conti-Brown, author of The Power and Independence of the Federal Reserve (2016)
"George Selgin's wide-ranging and deep analysis and proposals deserve wide attention and debate."
— Sir Paul Tucker, former deputy governor of the Bank of England and author of Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State (2018)
"A must-read for anyone making or analyzing monetary policy."
— Darrell Duffie, Stanford University Graduate School of Business