In summary: QT need to stop, now. Our financial stability, the decline of inflation and the chance of avoiding recession all depend on it.
QT is the method by which we reduce inflation.
The first thing to say is that the size of a central bank’s balance sheet is almost utterly inconsequential, unless it is too small. All that the size in question indicates is the amount of money that the central bank has created on behalf of the government for whom it acts to support the functioning of the economy for which that government is responsible. Let’s be clear: someone has to create that money.
QE created lots of money. As Spud would agree. We then got inflation – the result of too much money. Which even MMT agrees is possible. Therefore, QT reduces the amount of money, reduces the inflation.
It’s entirely true that MMT suggests increasing taxes in order to reduce the amount of money. Run a bidget surplus (say) and cancel the money that way. But it’s still, at heart, the same thing. Reducing inflation by reducing the amount of money.
“We must stop QT in order to reduce inflation” is simply ignorant. But then Spud…..