Most people think they know how money works. The Fed “prints” it, the government spends it, and sooner or later the dollar gets debased. Inflation, they say, is just the natural outcome of reckless policy.
Jeff Snider disagrees. Loudly.
Snider has built a reputation on arguing the exact opposite: that since 2008 we haven’t had too much money, but too little. That the global Eurodollar system — the real engine of dollar creation — broke down after the financial crisis, leaving the world chronically short of dollars. That’s why growth has been weak, why inflation undershot forecasts for years, and why interest rates kept falling despite “money printing.”
It’s a provocative take. And whether or not you agree with him, it raises an interesting question: if he’s right, what could the U.S. government actually do to spark real, lasting growth?
I asked an AI to walk through that scenario. What followed was part economics lesson, part policy brainstorm, and part reminder of how different the world looks when you start with the assumption that we’re dollar-starved, not dollar-soaked.
Here’s the long-form writeup of that conversation.
The Snider View: Fewer Dollars, Not More
Most people think of money as something the Federal Reserve “prints.” If the Fed expands its balance sheet or the government runs a deficit, the common assumption is that more money must be circulating, and therefore the dollar is being debased.
Snider’s view flips this upside down:
- The real global dollar system isn’t run by the Fed at all, but by private banks through what’s called the Eurodollar system — offshore dollar liabilities created through bank balance sheets, derivatives, and wholesale funding markets.
- That system was once the engine of global dollar liquidity, but since 2008 it has been sputtering. Banks pulled back from balance sheet expansion, interbank trust broke down, and collateral chains shortened.
- Instead of a flood of money, there’s been a chronic shortage of dollars in the places that need them most.
In this view, QE isn’t “printing money.” It just creates bank reserves — an accounting entry that stays locked in the Fed’s system. Unless banks are creating credit, those reserves don’t turn into circulating money.
That’s why Snider says: no, there is no dollar debasement. Instead, there’s deflationary pressure. It explains why interest rates keep grinding lower, why growth is persistently weaker than pre-2008, and why repeated rounds of “stimulus” have seemed to do so little.
COVID and the Inflation Debate
The most obvious challenge to Snider’s thesis came after 2020, when inflation surged to 40-year highs. Surely that was proof of debasement?
Snider disagrees. He argues the COVID inflation was primarily a supply shock:
- Factories, ports, and shipping lanes shut down.
- Energy supplies were constrained.
- Supply chains proved brittle.
- At the same time, fiscal transfers (stimulus checks, PPP loans) boosted short-term demand into a world of scarce goods.
Prices jumped, but not because the world was suddenly flush with money. Once supply normalized, inflation fell back. The absence of a runaway wage-price spiral, the relatively mild wage growth, and the sharp disinflation after 2022 all support his interpretation.
In short: the inflation spike doesn’t disprove the dollar shortage thesis. If anything, it shows that fiscal redistribution + broken supply chains can mimic debasement for a short time, but the underlying reality is still monetary tightness and weak growth.
If Snider Is Right, What Should Policymakers Do?
Assume Snider’s world is real. Assume the true constraint on growth is not too much money, but too little — too little collateral, too little balance sheet capacity, too little investment into real productive assets.
What then?
1. Fix the Monetary Plumbing
- More usable collateral. Tilt U.S. Treasury issuance toward “pristine” instruments (like T-bills and on-the-run securities) and use buybacks to concentrate liquidity.
- Elastic repo backstops. Expand the Fed’s standing repo facility, broaden access, and strengthen central clearing to reduce collateral squeezes.
- Regulatory tuning. Calibrate capital and liquidity rules so banks can support more credit creation without undermining safety.
- Global dollar backstops. Maintain swap lines and FIMA repo facilities to prevent offshore dollar squeezes from spilling over.
2. Crowd In Private Lending
- Targeted guarantees. Government can take the first-loss slice on clearly productive projects (energy, infrastructure, advanced manufacturing), while banks still underwrite.
- Permanent full expensing for investment. Lowering the hurdle rate for capex encourages firms to invest even in a tight-money world.
- SME support. Expand SBA programs, export credit, and specialized lending facilities for small firms that struggle most in a dollar-shortage regime.
3. Remove Supply Bottlenecks
- Permitting reform. A one-decision, one-shot-clock federal process could cut years of delay on infrastructure and energy projects.
- Energy abundance. Build out the grid, accelerate nuclear SMRs, expand gas pipelines, and invest in storage.
- Housing supply. Incentivize zoning reform and faster permitting to unlock new construction and lower shelter costs.
- Labor & skills. Immigration reform, childcare access, and licensing reform can boost the labor force.
- Trade resilience. Strengthen ports, rail, and friend-shoring of critical inputs.
4. Broaden Capital Formation
- Deepen private credit markets. Standardize reporting and securitization to channel more funds to productive firms.
- Stable tax policy. Reduce uncertainty by making investment provisions predictable and durable.
What Success Would Look Like
In Snider’s framework, you’d know it was working if:
- Repo and Treasury markets stop seizing up.
- Bank lending to productive sectors rises.
- Nonresidential fixed investment climbs.
- Permitting timelines shorten dramatically.
- Inflation remains low and stable, but growth and productivity improve.
The goal isn’t to stoke “more demand” with checks or QE. It’s to unclog the pipes, expand capacity, and make private investment actually flow.
Remembering How to Grow
Snider’s worldview is a bracing corrective. It says: stop obsessing about the Fed’s balance sheet and the specter of debasement. The problem isn’t too much money, but not enough of the right kind flowing through the right pipes into the real economy.
If that diagnosis is right, then the cure isn’t more “stimulus.” It’s rebuilding the monetary and real economy architecture that used to support growth. That means collateral, credit channels, energy, infrastructure, housing, and people.
In other words, the U.S. can remember how to grow — but only if it looks beyond the myths of money printing and starts fixing the deeper constraints that have held us back since 2008.
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