I agree that it’s unfortunate the central bank can only change interest rates. At the same time, fiscal policy often runs in the opposite direction. I wouldn’t be opposed to giving BoC some control over taxation, within a limited margin. It would give them one more tool so to speak.
We need less people controlling the money printers and interest mechanisms in my personal opinion. Some of these changes is reactionary to the USA devauling their own currency through exsesive monintary sepending, which is now uncapped till 2025(since being uncapped their national debt has increased by 1trillion dollars now ~32 trillion). And since our economy and most of the world is tied up with the USD its now causing problems. There is sestemic issues in the central banking systems that we use today(fractional reserve banking) and they(the issues) have been exploited for too long. I believe the next viable solution is a decenterilized finacial system and to take lobbying for policy influnce out of our societies. Seperate note billionaires need to pay taxes, they sequester more wealth then smog from lord of the rings and pay less tax then you reading this. Any got to head back to my behind wendys shift, want to see even more under the stock markets fuckery visit whydrs.org or drsgme.org(warning rabbit whole)
I wouldn’t be opposed to giving BoC some control over taxation
Why not just raise taxes, then?
I think that would be a better signal. After all, the poor who drive consumer inflation aren’t given loans and thus don’t feel interest rates directly. Interest rates only directly impact the rich who can shoulder increases for quite a while. And only after they’ve been feeling the pinch for a while will they start to cut spending where the poor are found. It might work eventually, but it is not a quick fix. Taxes can directly impact even the poorest among us right away.
But, of course, the whole reason the central bank assumed the inflation target mandate is because tax increases don’t sit well with the people. It is easier to have a “We tried nothing and we are all out of ideas. It is the central bank’s problem now.” scapegoat in the BoC. Giving them some control over taxes would defeat the purpose of them having the inflation target mandate (a mandate that only goes back to the 1990s).
That said, the BoC has a quantitative tightening lever they can use, in much the same way taxes could be used, to reduce liquidity. They are actively using this lever. Interest rates are not the only knob they have.
why not just raise taxes, then?
Because it’s politically unpopular despite being good fiscal policy. Give some control to the central bank, who aren’t beholden to angry voters.
I still don’t follow the logic. If people want higher taxes to combat inflation, they can simply raise taxes. If they don’t want higher taxes to combat inflation, why would they give power to the BoC to raise taxes to combat inflation?
