This presidential candidate seems to want to turn the U.S. into Venezuela
Green Party presidential candidate Jill Stein has her own plan to make America great again. That's turning it into Venezuela.
That, at least, is what her proposal to have the Federal Reserve pay for everybody's student loans and perhaps their healthcare too would do to our economy. Inflation would skyrocket, the dollar would collapse, and the inevitable price controls would create shortages of basic goods. In other words, the full Chavez.
Not that Stein seems to get any of this. Indeed, she thinks that quantitative easing—which is when the Fed buys bonds with freshly-minted dollars—is just "a magic trick that basically people don't need to understand any more than that it is a magic trick." According to her, it "canceled" the "debt of Wall Street" by "essentially writing it off as a digital hat trick." So it's only fair, she says, that we do the same for student loans.
This is wrong. QE didn't buy bonds that the banks owed to other people. It bought bonds that the banks were owed from other people—specifically, homeowners and the U.S. government. Paying a bank $100 for $100 worth of bonds is no more a bailout than paying Starbucks $5 for $5 worth of lattes is. Still, though, Stein's not wrong that there is some magic to this. Just not the kind she thinks. What do I mean by that? Well, when the Fed buys a U.S. Treasury bond from a bank, it turns a debt that the government owed to somebody else into a debt that it owes to itself—so it's like it doesn't exist. QE, then, didn't erase Wall Street's debts, but Uncle Sam's.
https://www.washingtonpost.com/news/wonk/wp/2016/09/19/this-presidential-candidate-seems-to-want-to-turn-the-u-s-into-venezuela/
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