Society: The dilemma of US monetary policy and fiscal policy

Source: Taiwan Economic Daily

Economic Daily Society

U.S. President Bynden delivered the first economic policy speech at the end of January, criticizing the Republican Party's threat to threaten the upper limit of debt limit, which will endanger the US economy; Bayeng scolds Republican members such as McCarthy, the Speaker of the House of Representatives.On the other side, McCarthy said, "If we want the United States to embark on a better financial path, we must deal with irresponsible government expenses." McCarthy's point of view is obviously consistent with the long -term financial concept of the Republican Party, but as a ruling Democratic PartyYellen, the Treasury Secretary, warned that if the upper limit of debt is refused, the government will be suspended and a greater crisis will be caused.It is estimated that every day for the federal government to stop, it will lead to a loss of 300 million US dollars.

The contradiction between the two parties in the United States for increasing the upper limit of debt is not new. It ends once every other period. Each time, both parties have reached some compromises and finally realized the upper limit.Since 1917, the U.S. Congress has raised the debt limit of 108 times, and the frequency has been higher in the past 20 years. Almost every two years, it is estimated that this time will not be the exception.The United States is facing a dilemma of a monetary policy and fiscal policy unprecedentedly in danger.

Not long ago, Liu He, Vice Premier of the State Council of China, held a three -hour talks with US Finance Minister Yellen in Zurich, Switzerland.This talks made by Yelun to take the initiative to fly to Liu He to talk; this shows that Yellen is looking forward to and actively seize the opportunity to talk to Liu He, but what the talks are talking about, why Yellen is so so wayActive and active?

This is related to the current debt crisis in the United States.The size of US Treasury bonds in the United States was $ 8 trillion when Obama took office in 2009. After eight years, he stepped down to 16 trillion dollars. After that, Trump added Biden to six years, and he increased to 31.4 trillion dollars now.This period of time is just related to the financial tsunami that broke out in the United States in 2008, and the quantitative loose currency (QE) policy was adopted again and again.The national debt.

In other words, in order to deal with the economic downturn, the United States has adopted extremely positive and loose fiscal policies to issue a large number of government bonds.The Feds' Society was purchased with a large number of banknote printing. It should be said that after the financial tsunami in 2008, China and Japan helped a lot of busy and bought a large number of US debt. In addition, the FedIt was absorbed by QE, and the United States spent this period of time by sacrificing huge fiscal discipline and monetary discipline. At the same time, China and Japan have become the largest creditor country in the United States.

The development of the world is inseparable from logic. The key is that many logic cannot be appeared in the short term, and it can only be seen after a long time.The logic of monetary policy is that too many currencies will cause inflation sooner or later. The United States for ten consecutive years has finally increased the US prices (CPI) from April 2021, from the original 2%, breaking through 4%in one fell swoop.In early 2022, even more than 8%, forced Feds to raise interest rates to deal with inflation. Unfortunately, at this time, a crowd -right country such as China, Japan, and Saudi Arabia began to reduce its holdings for different reasons for different reasons.U.S. debt, which made the United States immediately face the crisis of unprecedented debt issuance -in the words of Yellen, it is difficult to liquidity in US government bonds.

For a long time, U.S. Treasury bonds have been welcomed by the market, mainly because the interest is not high but safe enough, but now, several large buyers have not bought it together, and even reduced their holdings.I can't sell it up; in the past, the Fed will take a shot at this time.The so -called unprecedented entanglement of monetary policy and fiscal policy has made Yellen helpless. He can only put down his body and "seeks" in Liu He. In the end, he still hopes that China can help and buy U.S. Treasury bonds.

Can Liu He be the master?Of course, it is not necessary. At most, it depends on Beijing's evaluation of the current Sino -US game situation.From a different perspective, the pressure of the US diplomacy and military sector today is not the US government's assists in Yellen's wings.