Usually inflation happens, so to speak, by default. It exists practically always, no one pays attention to it, and no one particularly discusses it, except for narrow specialists. But there are situations when, for various reasons, the general public suddenly takes notice. More troubling still, sometimes the “excuse” in the form of “prices are rising because it’s the merchants’ fault” stops working, and the matter escalates to a discussion of states’ monetary policy. By the way, this is happening more and more often. So, in these situations, the discussion is usually built around the question: “Have we printed too much money?”
There are two implicit assumptions here. First, it is assumed that someone may know how much money needs to be printed—and for whom. Second, it is assumed that money, however much is printed, enters the economy evenly, that is, it is produced exclusively for the needs of “the economy as a whole.”
For example, if you add some water to a pool already full of water, its level will rise by a certain amount. This amount will always be the same if you add the same volume of water to the same pool. Approximately such logic you will see in the reasoning of the economic mainstream, if you manage to break through its terminological and pseudo-mathematical defenses.
However, if mainstream representatives like Krugman or Bernanke were to be consistent, they would have to allow everyone to print dollars, not just Federal Reserve banks. If the whole issue, as they say, is “quantitative easing,” and not who gets the new money first, then counterfeiting in general is not a problem and not a crime. If you can print papers of the right quality—just get a license and print, what’s the problem? If he believes that Bernanke knows how many bills are needed for the easing to actually work—there is also no problem; one could simply organize reporting. After all, one could just give money to people. With electronic payments, distributing it is not difficult. The fact that Keynesians do not give out money and do not advocate for home free banking suggests that the issue, apparently, is still not so much about quantitative easing, but about who gets the new money first.
The state would never engage in inflation if its effect were limited to “rising price levels.” Inflation is not an effect on some abstract “levels” that somehow magically allegedly stimulates the economy—new money always enters the system at specific points, rather than being dispersed in a thin layer across the entire economy at once. “Dispersal in a thin layer,” generally speaking, is obviously a meaningless activity. It is precisely the ability to create money out of thin air at the points the government needs that causes inflation.