So we know Ace Magashule's macroeconomics are so dodgy that he can't tell quantity easing from quantitative easing (QE). And we know (or should) SA isn't really a candidate for QE, which advanced-economy central banks resorted to only because they'd already cut interest rates to zero to avert a global depression.
But let's pretend for a moment, frivolously, that SA is mad enough to implement the QE Ace and his populist friends seek. Have they thought about some of the more unanticipated consequences? They might not like them at all.
Take bonds. Cutting interest rates is the conventional monetary policy tool central bankers can use to stimulate their economies. But when the US Federal Reserve, Bank of England and European Central Bank couldn't lift their economies out of recession with conventional means, they resorted to unconventional QE instruments - such as buying government bonds.
That pumped huge washes of money into the hands of bond market investors, which they then invested in the stock market, the property market and other markets. The dollar weakened, share prices climbed, interest rates declined and money poured into risky assets everywhere, including into emerging markets. That included SA, which was able to ramp up public debt in the Zuma era partly thanks to international investors buying its bonds in large quantities.
No doubt Ace and friends are tempted by the prospect of expunging the government's R2.8-trillion of debt to avoid tough choices. But QE would merely make the Reserve Bank the owner of the debt, rather than get rid of it, with interest still payable. And while QE bond buying would pump money into the market and the economy, it wouldn't necessarily be our economy.
With almost 40% of government debt held by foreign investors, and almost 54% of Eskom's, much of that cash would just go to foreigners, who would invest it in other emerging markets, or at home.
Then there's the "wealth effect". QE by the world's largest economies was absolutely necessary, but it had unanticipated consequences, one of which was to make the rich even richer, by driving up prices of their shares and other assets. The result: rising inequality. Do we really want to widen SA's wealth gap any further?
And that's not to mention the ANC's aspiration to nationalise the Reserve Bank, which would become even more unaffordable because QE would increase the size of its balance sheet, no doubt prompting calls from its greedy foreign shareholders for an even larger payout.
If the prospect of hyperinflation doesn't convince the populists of the perils of QE in SA, the unanticipated consequences should. Of course, this is not about economic realities but about political proxy battles. But if this bizarre debate has been an education in economics for SA, that would at least be a plus.
• Joffe is a communications consultant and freelance journalist
