Cash is a vital part of the monetary system and the overall money supple. Central banks can manipulate the amount of cash available and this effects the price of goods and interest rates. This cash that is made available can be loaned by banks and with a multiplier effect can produce many more times the amount.
According to our textbook, one of the Ten Principles of Economics in Chapter 1 is that prices rise when the government prints to much money. Presently our Government is injecting cash into our economy in different programs in COVID-19 bills from unemployment benefits to rock bottom home mortgage loan rates and many other programs intended to keep the economy moving some and to keep people relatively safe, and in their homes.
But where is that money coming from? According to the New York Times, "out of thin air". Many methods of fiscal policy are attempted to manage the trillions of dollars needed for COVID relief. Historically speaking, an informal wall separated the Government for the Federal Reserve with the Government setting policy and spending tax dollars and the FED managing the cash available to ensure proper a proper functioning economy.
In today's world the US government is spending money and increasing its debt and the FED has indicated it will finance an unlimited amount of Government debt. This puts these two entities working closer together than they have historically.
I currently feel that with massive increases of virus outbreaks and with the flu season coming, winter in the majority of the U.S., that money should be spent to control this virus. My habits have changed and so have millions of others and these changes to the economy have effects throughout the nation and beyond.
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