> It's analogous to hiring a contractor. The government wants a program, it simply outsourced the operation to another entity.
No, it isn't, explicitly so. The reason the Fed operates at arms-length is explicitly to avoid having the government set monetary policy. This degree of stability allows businesses to plan and reduces their currency risk. Otherwise you face D vs. R every 4-8 years totally reversing monetary policy.
> It should remain relatively constant. That's the entire point of a unit of exchange. There might be periods where the relative demand for the currency outstrips the supply, and if it becomes such a dramatic situation as your presented in your contrived example, then it would cease to be useful as a currency, and something else would/should become the currency.
Yes, and my whole point is to avoid a large dramatic change you apply small amounts of pressure over time. This is called managing the money supply. And once you agree that this kind of adjustment achieves your objective of "relatively" stable currency (it does), then we can talk degrees, but we're now having a very different conversation.
> Congress has the power to coin and regulate value, per the US constitution. I'm not sure how we ended up talking about the US specifically here, I'm referring to governments generally.
Government handles the fiscal policy, federal reserve handles monetary policy. They're explicitly separated. This is true in many developed countries in the world operating under a central banking model, including Canada (Bank of Canada), and all of Europe (ECB) and England (Bank of England -- privately owned from 1694 to 1946).
> Government handles the fiscal policy, federal reserve handles monetary policy.
This is entirely semantics.
> And once you agree that this kind of adjustment achieves your objective of "relatively" stable currency
I can prove to you that it doesn't result in a stable currency. See the purchasing power of the US dollar over the last 100 years.
> This is called managing the money supply
That's what you call it. I call it theft. If an individual does not have the power to create money, then neither should a group of individuals, regardless of what color robes they're wearing.
> Otherwise you face D vs. R every 4-8 years totally reversing monetary policy
I don't think there's any risk there. They're the same party, both are spend-spend-spend.
No, it isn't, explicitly so. The reason the Fed operates at arms-length is explicitly to avoid having the government set monetary policy. This degree of stability allows businesses to plan and reduces their currency risk. Otherwise you face D vs. R every 4-8 years totally reversing monetary policy.
> It should remain relatively constant. That's the entire point of a unit of exchange. There might be periods where the relative demand for the currency outstrips the supply, and if it becomes such a dramatic situation as your presented in your contrived example, then it would cease to be useful as a currency, and something else would/should become the currency.
Yes, and my whole point is to avoid a large dramatic change you apply small amounts of pressure over time. This is called managing the money supply. And once you agree that this kind of adjustment achieves your objective of "relatively" stable currency (it does), then we can talk degrees, but we're now having a very different conversation.
> Congress has the power to coin and regulate value, per the US constitution. I'm not sure how we ended up talking about the US specifically here, I'm referring to governments generally.
Government handles the fiscal policy, federal reserve handles monetary policy. They're explicitly separated. This is true in many developed countries in the world operating under a central banking model, including Canada (Bank of Canada), and all of Europe (ECB) and England (Bank of England -- privately owned from 1694 to 1946).