this post was submitted on 21 Sep 2023
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Well, I mean, if you want the German government to cover the cost, they don't magic money up out of the air. They get it via taxation of industry and workers.
If what you're saying is "I am running a company in an energy-intensive industry and I want subsidies paid for by non-energy-intensive industry," okay, but you're still pulling it from industry and workers.
Those companies had decades to transition their production processes to be more efficient and most of them actively lobbied against such policies that would enforce it onto them. π»
I am not an economist by any stretch but I've understood this much: The ECB literally can create money out of thin air. The issue is just that money in and of itself is meaningless. The interesting bit is the ratio of money in circulation vs. goods/services available for purchase.
Even expanding the money supply doesn't "magic money up out of the air" in the sense to which I'm referring.
If the ECB expands the money supply, it generates inflation. That effectively taxes everyone holding euros or euro-linked assets and transfers the real wealth associated with that to whoever winds up with the new money being created.
Actually, it can't. The issue is not printing it, the issue is issuing it: The way reserve banking works is that when the central bank wants to increase the amount of money in circulation it lowers the interest rates banks have to pay for ECB euros, which the banks then use to give out loans in private bank euros (hence reserve bankings -- the banks can lend out more book money than they hold in ecb money).
The reason why the Eurozone has been in deflation or just barely scraped past is that the banks weren't willing to give out loans -- they were consolidating, reducing risk, because believe it or not they don't like being nationalised and having bureocrats breathe down their neck. (if nothing else that gets in the way of shady business).
There were talks about "helicopter money", that is, right-out giving every citizen money, no questions asked, to spend, an excellent idea but the thing never materialised not in the least because the infrastructure to do it simply isn't there and getting politicians to cooperate in something that looks suspiciously like a UBI (even if short-term and all in all a low amount) is an uphill battle. It's probably one of the reasons why the ECB is now thinking very loudly about a digital euro as then they could simply do it based on the stability mandate they already have.
Every other country in the world just issues bonds/debt to generate this "magic money up out of thin air". Yes it's eventually paid back through taxes but you fix the problems and then the industries your helping pay it back over time. That's how debt works.
As you point out, if it issues bonds, the government is going to pay that back, plus interest.
The issue isn't that Germany cannot get access to capital. The issue is that he can't assert that industry and workers shouldn't be hit with the bill, because they're going to be paying it, one way or another. It might be companies in a different sector than his own, which I expect is what he hopes to see. But one way or another, it's going to be workers and industry.
Minus inflation.