Two types of paper: the case for Federal Reserve independence

This essay argues that central bank independence is more important today than at any time in history. Because fiscal incentives for inflation grow as government debt grows, and in view of the huge run-up in government debt in the 1980s, with prospects for continued growth in the 1990s, we believe that the principal mission of our nation's central bank is at risk. Our aim is to provide a convincing case for the view that the power to spend money and the power to print money must be separate and independent powers within the government.