This lessens the temptation for the fiscal authority to use the printing press to fund its public spending, thereby substituting a hidden tax of inflation in the future for taxes or spending cuts. History is replete with examples of what happens when central banks are not independent or become agents for a nation’s fiscal policy.
Just think of the hyperinflation in Germany between the World Wars of the last century, or in Italy before the euro, or in the numerous financial crises and high inflation rates in Latin American in more recent years, to name just a few. The consequences – higher inflation, currency crises, and economic instability – are not good.