Three reasons I thought of for Quantitative Easing

Quantitative Easing is basically when the Federal Reserve prints more money to add to the economy. Some people call this "fiat currency" meaning phony or fake currency, but the practice of printing money most likely helps to prop up our society.

Reason 1 for Quantitative Easing that is always mentioned in the media is to stimulate the economy in order to bring down unemployment. Low interest rates and economic stimulation in an attempt to keep unemployment from reaching explosive levels. Explosive meaning possibly social disorder.

Reason 2 for Quantitative Easing. To help fund the Federal government. Yes, I read that somewhere around 40% of the Federal budget comes from borrowing money. Borrowing from creditors or basically borrowing from the Federal Reserve where we print our own money here in USA.

Various political and economic circumstances means the they can't collect enough taxes to fund the government, yet cutting things like the military and Medicare prove problematic. I've been listening to C-Span Radio. Hearing all these folks on Capital Hill testifying before various Congressional committees about how we just can't allow drastic cuts in Pentagon spending as well as other programs. Huge spending cuts that might happen if the Budget Sequester law goes into effect in January.

Remember; the Sequester was an across the board budget cutting deal agreed upon during the battle over raising the debt ceiling in summer of 2011. It applied to both military and domestic programs equally. Especially lots of Republicans are saying we just can't afford those kind of cuts to our military. Meanwhile not just Democrats say that Medicare must continue to meet the needs of our growing senior population. Major cuts translates into doctors turning away Medicare patients and it can be a life or death issue.

Think about all the veterans programs and Medicaid not to mention the very running of our Federal Government. Everything from Congressional salaries to the FBI and the Weather Service. I guess we do need the Federal Government to remain solvent.

A big problem with printing money; especially lots of money, is the threat of inflation. Even hyper inflation. Maybe it hasn't been hyper inflation, but over the past 20 years, or so, we have had significant inflation in certain sectors of the economy; like house prices in some of our cities. After something like the housing bubble that broke in 2008, money printing might be seen as a way to combat deflation. Basically, one can view printing money as a technique to preserve inflation that has already come down the pipeline.

Reason 3 for Quantitative Easing. To prop up high property values. During the real estate bubble, before 2008, property values soared; especially residential property in many parts of the country. Maintaining these high values in the face of a sagging economy is challenging. After the bust of 2008, values did drop and there was fear of deflation. The Fed has been stepping in to try and prop up the housing market. Not only that market, but a lot of jobs associated with it, like home contractors, furniture stores, real estate agents and so forth.

Seems like dropping property values becomes problematic with folks in debt and upside down in their homes. The Fed must see part of their job as to, at least try, to lesson economic pain and disruption. To, at best, try and muddle through.

Speaking of fiat currency, a lot of property values are fiat values. One might think we should just let the market crash. Let the values plummet. At least that might make houses more affordable for large segments of the workforce who tend to be making low wages. Related to this idea is the concept of not bailing out the banks. Many folks will say, they should have not bailed out the banks in 2008. They should have just let them fail.

I'm not necessarily a fan of banks, but one keeps remembering the old phrase, "be careful what you ask for as you might get it." Having our society crash seems exciting at first glance, but I think most folks would be afraid of it really happening. It could turn ugly even though it isn't necessarily guaranteed to turn ugly.

I don't know if people are wanting to give up most of their possessions and follow some kind of a different way of life. Especially post war baby boomers, who have now built up enough inertia making it harder to change course this late in the game. I'm a baby boomer, myself, but I don't have much in the way of possessions. I still have a Bohemian way of life living in a small room and only riding a bicycle. It can be an enjoyable way of life with health and lots of friends, but even someone like me could fear the falling apart of society.

The big money people kind of have us all over a barrel, but we basically have them over a barrel as well. It's called maintaining the Status Quo, or in other words, just getting by.