Monetary Policy works (Devil's Advocate)Submitted by 12th on Tue, 08/20/2013 - 09:01
Monetary Policy works because it keeps business stable giving established people more time to learn, build, save, and invest by staying in business longer.
Even survivalists say that more business learning is key to whatever happens in the future. Monetary Policy ensures more business learning by more people in the past, present, and at least short term future.
Standing adults with more experience to take care of kids is the kids' best shot to survival no matter what happens in the future of the world. This justifies any jeopardized future opportunities brought upon the kids by Monetary Policy.
Monetary Policy ensures that when the economy slows down it still stays active, giving technological advances time to restore the economy again. Example: 1990s tech boom. This is when interest rates can be raised so they can be lowered again when the economy slows down.
Monetary Policy ensures easier access to money via government during slow times in business. Once technology again causes the economy to improve, government can tighten up since easier access to money can be had in business. This cycle can be repeated indefinitely.
Currency devaluations at a slow, controlled rate of under 10% is not a problem since it's temporary by nature and not intended to be hoarded. This is more than justified by creating a business environment for each individual to invest in anything tangible at their discretion, be it real estate, precious metals, or anything else of their choosing.
An inflation rate of this sort is actually a good thing since it encourages spending and reduces the liability of debt holders. Look at the prosperity of the US in the 20th century with it's slow inflation as proof. Sure the dollar dropped to only 3% of it's worth over 100 years but that is a long time. Still reflects a yearly decline in value of less than 10%.
Monetary Policy allows for wealth distribution to the less fortunate, which benefits the economy because the total number of people with discretionary income is higher. So more people are able to spend.
This is also why nationalized health care is a good thing, as well as mandatory auto insurance. It ensures that the people are able to operate higher on Maslow's hierarchy of needs since they aren't focused at any given time so much on food shelter and health. It also helps the economy because it allows more workers to more freely move between companies since their health care plans would be stable for their families, regardless of who if anyone they are currently working for.