Posts Tagged ‘casey stengel’

Printing money?

10 June 2009

Trivia question:  How much money has the Federal Reserve printed in its entire ninety-five-year history?

Answer:  $0.  The Bureau of Engraving and Printing, part of the federal government’s Department of the Treasury, prints all the money.  And none of those bills become “money” (i.e., part of the money supply, M1 or M2) until they’re held by the public anyway.

Am I being pedantic?  After all, those dollar bills are “Federal Reserve Notes” and are delivered to the twelve Federal Reserve Banks upon request.   I don’t think it’s pedantic, though, as there’s a world of difference between printing money and dropping it from a helicopter (as described in countless economics classrooms and which would be very inflationary) and how those bills actually do hit the street (generally not covered in econ classes, an omission that has always mystified me*, and which is not so inflationary).

Anyway, what brought on this post is the constant chatter in the media and the blogosphere about how the government or the Fed is printing money.   (Of course this chatter is most pronounced on the right.  The three minutes I heard of Limbaugh’s show this year were devoted to some witless sarcasm about we should all be allowed to print counterfeit money because the government is already doing it.  Har de har.)

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