Iain Dale writes:
There is absolutely no guarantee that the £75 billion quantitative easing will improve liquidity in the economy, and the big danger is that in the long term it could lead to an inflationary problem.
Dale is right that there is no guarantee that quantitative easing will work. Then again, there’s no guarantee that if it isn’t done, the economy will get better without it.
But Dale is wrong when he says this:
Nothing, and I mean nothing, will ever convince me that printing money is the solution to our problems.
Nothing? Not even a detailed mathematical model, based on tested assumptions, that demonstrates it will work? A consensus of economists saying it’s a good idea? The success of similar policies in other countries? Note that I’m not saying that any of these things exist for quantitative easing; what I am saying is they’re the sorts of evidence that ought to persuade a rational person that a policy is a good idea. To resolutely believe that a policy won’t work, regardless of the evidence, isn’t a rational position — it’s a religious one.