> We could give money to people/government directly
The Fed doesn’t have the legal authority to give individuals money. That’s why the Congress is passing stimulus bills.
Moreover, buying assets is different from handing out money. When Congress gives every American $1,200 money, the money is spent. There is no balancing entry on the government's balance sheet. When the Fed lends a dollar or buys securities, it spends cash and gains assets.
The Fed could lose money on those assets. But that risk profile is night and day to the federal government's. (This difference also makes a dollar of fiscal stimulus more powerful than one of monetary spending.)
There are other differences between fiscal and monetary policy, a topic with lots of literature behind it. Congress controls fiscal policy. It has outsourced monetary policy to an independent Fed.
The Fed doesn’t have the legal authority to give individuals money. That’s why the Congress is passing stimulus bills.
Moreover, buying assets is different from handing out money. When Congress gives every American $1,200 money, the money is spent. There is no balancing entry on the government's balance sheet. When the Fed lends a dollar or buys securities, it spends cash and gains assets.
The Fed could lose money on those assets. But that risk profile is night and day to the federal government's. (This difference also makes a dollar of fiscal stimulus more powerful than one of monetary spending.)
There are other differences between fiscal and monetary policy, a topic with lots of literature behind it. Congress controls fiscal policy. It has outsourced monetary policy to an independent Fed.