Let me introduce you to John Maynard Keynes, one of the two most influential economists of the 20th Century (we will meet the second one later).
Perhaps more than any economist in history, Keynes is known for his memorable quotes, with my personal favourite being, “In the long run, we are all dead,” a critique of his contemporaries who spent lots of time building long-term economic models but had very little advice to offer governments trying to fix current issues in the economy.
Today, though, we are most interested in Keynes’ thoughts on a central bank financing its federal government’s deficit. Let’s hear from the man himself:
“The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.”
Strong words and