Apologies for the lazy here; I'm just pasting in my comments from a discussion on economic policy on G+, responding to some fellow liberals who are hoping to see Obama make an end-run around congress and direct coins to be minted that would be used by the executive branch to directly fund discretionary funding to end the budget deadlock.
I think this is a bad idea for a number of reasons. Pasting a few:I don't see the current system as being arbitrary with regards to its ends though; it is not resource-tied, but those resources are themselves arbitrary so fiat currency is, IMO, absolutely fine. The question is, what metrics guide our fiscal policies? I believe that right now financial stability is a major guiding principle, and that taking action to nullify our debt in the form of printing our way out would be catastrophic for such stability; the action would be too large to serve both ends.
I agree with you that there are injustices in the current order. I would like to see them fixed using a different means. But yes, regarding your specific points, banks are more accountable, and banks are also to some limited extent instruments of government (because of the degree to which they are regulated). A bank going under is a big deal; your neighbour declaring bankruptcy is not. I would be delighted to see a comprehensive shift in how we pay for education though.
Quantatative easing is in fact inflationary and dangerous. It was an emergency measure for a fiscal crisis, and even then it was rightly controversial. We should not use tools like that for political fights though; if it can be fixed by congress, congress should be the one to fix it. The balance of powers we have is one of the good ideas in our constitution. If we deadlock in congress, the pressure should be on to fix that, because it's a reflection of our society itself deadlocking.
The broader discussion is here. As always, feel free to disagree with me.
The original poster, JamesS, is somewhat less liberal than me (AFAIK, he's not a socialist, just a pretty-left-wing liberal), but much less technocratic and often, IMO, a bit kooky (in politics and some of his other conclusions). He's interesting though, and worth reading.