Also why, exactly, are they buying the exact assets that they are buying (govt. debt, high-yield bonds, etc..) and why not others (e.g. stocks or put money into startups)? And then, what happens if a debtor pays back its debt? Is that money consequently getting "erased" again (just like it's been created)? What happens if a debtor defaults on its debt? Does that money then just stay in the economy, impossible to drain out? What is the general expectation of the central banks? What percentage of the debt is expected to default and how much is expected to be paid back?
And specifically in the case of central banks buying govt. debt: Are central banks considered "easier" creditors than the public? What would happen if a country defaults on a loan given by a central bank? Would the central bank then go ahead and seize and liquidate assets of the country under a bankruptcy procedure to pay off the debt (like it would be standard procedure for individuals and companies)?
If Central Banks can create money without negative effects, then
- why tax people?
- why even work? Can't we just print enough money for everyone and live happily ever after?
I realize these questions are quite provocative and their answering only explains if it will work but not how or when it will fail.
Printing money is actually more or less equivalent to a tax, because it reduces the value of the existing money supply.
> - Can't we just print enough money for everyone and live happily ever after?
No, because printing money redistributes wealth, it doesn't create it.