Mary: This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at printing money. Mike, I’ve heard people say that the federal government is financing its programs for people and businesses during the coronavirus by simply printing money. Is this true, and if so, is it bad?
Mike: Summary Answer
- First, programs from the President and Congress are financed by borrowing
- Government issues investments, called Treasury securities, and anyone can buy
- Traditionally these investments are sought after
- One big buyer is often the Federal Reserve, and if they buy, the Fed finances by effectively printing money
- Second, the Federal Reserve itself has set up separate lending programs to help during the virus crisis
- These are also financed by printing money
- Not bad if value of dollar doesn’t sink, meaning inflation doesn’t jump
- So far, no sign of that
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.