I think a lot of the discussions about Central Bank Digital Currencies or households having checking accounts at the Federal Reserve end up confusing political problems for technical ones.
We all know there's better ways to deliver counter-cyclical macro policy and that neither QE nor rate policy nor hoping for a good one-off stimulus bill are great ways to revive the economy after a downturn.
The question is, do political leaders want to establish standing facilities that get money to households in a downturn, or do they prefer the existing system, where recessions are opportunities to weaken labor, and elected officials retain the discretion to act or not.
That's the debate that matters. After that, there's probably multiple ways to deal with putting money in people's hands directly, whether it's CBDCs or something like that. But just coming up with a superior technical solution doesn't solve what is the real challenge.
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