I took one course in economics. I thought it was boring, hated it, and got a C. Last econ. course I ever took.
That’s why I need people like Matt Taibbi, regular writer for Rolling Stone, to explain such topics as Quantitative Easing. I’ll get to that in a minute, but let me quote one paragraph from Taibbi’s June 6 article entitled “The Mad Science of the National Debt.”
Here’s a quick and easy rule: Any time any politician, pundit, TV talking heard or self-proclaimed financial expert starts comparing the U.S. federal budget to anything other than the U.S. federal budget, that person is automatically full of shit and should be instantly voted off the conversational island, if not outright beheaded.
The government can manipulate the economy by fiscal policy (taxing and spending, done by Congress) or by monetary policy (influencing the money supply, done by the Federal Reserve Board). Since Congress is completely paralyzed and full of fools like Paul Ryan, almost the entire burden of fighting this recession has devolved to the Federal Reserve Board. Bernanke and the Board have put billions into the economy under the innocuous-sounding program known as Quantitative Easing. The money involved so far dwarfs the Obama stimulus plan. And what happens when QE slows down? Well, that could be a problem.
If you’d like to read the article, go to <http://www.rollingstone.com/politics/news/the-mad-science-of-the-national-debt-20130522>. I believe if Matt Taibbi had been my econ. teacher, I might have gotten an A.
One thing to consider is that during QE, the Fed is buying assets. This benefits the stock market and Wall Street. Brokers and Hedge Fund Managers gain financially from this process. The money would have been better spent on helping Main Street.
ReplyDeleteSome fund managers make $1 million A DAY! They don't need the help. Yet, the bridge near my house in Penn Forest has metal spiking up from it and had to be fixed 3 times this year.
That's the problem when the Fed is the only institution trying to help. It has limited powers. Congress theoretically could pass a stimulus package that would fix your bridge, but Congress can't even pass a bill curbing the increase in college student loans.
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