On Why Conservative Republican Politics are Just Plain Wrong
Monetary policy is a useful too in targeting inflation and stable growth during good economic times. It provides the gas, and the brakes, to economic growth as needed.
But, Monetary policy is ill suited to shake nations out of broad, and severe economic downturns, for the Federal Reserve (Central Banks) has a limited toolbox when it comes to matters of expansionary policies.
The Fed can target short term borrowing rates down to zero. Which is nearly where US Fed Funds rate (the primary monetary control mechanism, and the inter-bank overnight unsecured lending rate) has been for 3+ years now.
Then there are the so called repurchase agreements - Fed buys large swaths of securities from primary dealer banks, thus injecting more money (money supply) into the economy - and they have not helped. Banks are happy to hoard the cheap money. They are scared of lending. Banks have been demanding egregious levels of collateral securing new lending. Not that there is a robust demand for new loans.
The Fed's last resort, and I hope it is never executed, is printing money. Literally. We are familiar with such 'experiments' in Argentina, and elsewhere. Monetary inflation is the firestorm of economic destruction. It makes everything we own, and have, including money, worthless. Ten Thousand Dollars for a cup of coffee is not a palatable option.
The 'Fed", collectively Mr. Bernanke and his fellow governors of US Federal Reserve Banks, is now, and has been for some time, at the point of impotence. No amount of monetary Viagra (excuse the mixed metaphor) will help get a rise (pun is intended) out of this US economy.
Federal 'austerity' programs, during recesscionary times, are a recipe for economic disaster. The US experimented with it in the pre-Great Depression of 1930s years, and the consequences are known to all. The way out, looking into the economic rear view mirror, was the New Deal - a Federal spending program of enormous proportions. It built the Hoover Dam, and the US Interstate highway system, among others. It created millions of jobs, putting families back on their feet, and the US on track to become the largest global economy.
The US is mired, has been so for 3+ years, in economic depression. Yes folks, it is a depression for millions are unemployed, and have lost everything. Millions are unable to find employment. Some, and that is in the hundreds of thousands, have quit looking for jobs. While politicians will jump on every good economic data release coming out of the Bureau of Labor Statistics, it is a fact the the American economy is stalled, and depressed.
Yet, the Right Wing 'nut jobs' of the Tea Party, and the Conservative Republicans (forced by right wing nut jobs of the Tea Party) keep beating the drums of fiscal austerity - cutting fiscal spending. Rep. Paul Ryan, Erik Cantor, Speaker Boehner, and even the presumptive Republican nominee - Mitt Romney - are prescribing severe fiscal spending cuts as elixir. At the same time these Conservatives are proposing further tax incentives and tax cuts for USA Inc., for the wealthy, and for high income families. The rhetoric, that spending cuts (savings) should be deployed into tax cuts for the rich (spending), for the rich are job creators is asinine. Hiring a few more chauffeurs is not going to do it.
For the US to bootstrap itself out of this economic depression, we need gigantic fiscal spending. By the US Federal Government.
Austerity be gone. Else we will.
Monetary policy is a useful too in targeting inflation and stable growth during good economic times. It provides the gas, and the brakes, to economic growth as needed.
But, Monetary policy is ill suited to shake nations out of broad, and severe economic downturns, for the Federal Reserve (Central Banks) has a limited toolbox when it comes to matters of expansionary policies.
The Fed can target short term borrowing rates down to zero. Which is nearly where US Fed Funds rate (the primary monetary control mechanism, and the inter-bank overnight unsecured lending rate) has been for 3+ years now.
Then there are the so called repurchase agreements - Fed buys large swaths of securities from primary dealer banks, thus injecting more money (money supply) into the economy - and they have not helped. Banks are happy to hoard the cheap money. They are scared of lending. Banks have been demanding egregious levels of collateral securing new lending. Not that there is a robust demand for new loans.
The Fed's last resort, and I hope it is never executed, is printing money. Literally. We are familiar with such 'experiments' in Argentina, and elsewhere. Monetary inflation is the firestorm of economic destruction. It makes everything we own, and have, including money, worthless. Ten Thousand Dollars for a cup of coffee is not a palatable option.
The 'Fed", collectively Mr. Bernanke and his fellow governors of US Federal Reserve Banks, is now, and has been for some time, at the point of impotence. No amount of monetary Viagra (excuse the mixed metaphor) will help get a rise (pun is intended) out of this US economy.
Federal 'austerity' programs, during recesscionary times, are a recipe for economic disaster. The US experimented with it in the pre-Great Depression of 1930s years, and the consequences are known to all. The way out, looking into the economic rear view mirror, was the New Deal - a Federal spending program of enormous proportions. It built the Hoover Dam, and the US Interstate highway system, among others. It created millions of jobs, putting families back on their feet, and the US on track to become the largest global economy.
The US is mired, has been so for 3+ years, in economic depression. Yes folks, it is a depression for millions are unemployed, and have lost everything. Millions are unable to find employment. Some, and that is in the hundreds of thousands, have quit looking for jobs. While politicians will jump on every good economic data release coming out of the Bureau of Labor Statistics, it is a fact the the American economy is stalled, and depressed.
Yet, the Right Wing 'nut jobs' of the Tea Party, and the Conservative Republicans (forced by right wing nut jobs of the Tea Party) keep beating the drums of fiscal austerity - cutting fiscal spending. Rep. Paul Ryan, Erik Cantor, Speaker Boehner, and even the presumptive Republican nominee - Mitt Romney - are prescribing severe fiscal spending cuts as elixir. At the same time these Conservatives are proposing further tax incentives and tax cuts for USA Inc., for the wealthy, and for high income families. The rhetoric, that spending cuts (savings) should be deployed into tax cuts for the rich (spending), for the rich are job creators is asinine. Hiring a few more chauffeurs is not going to do it.
For the US to bootstrap itself out of this economic depression, we need gigantic fiscal spending. By the US Federal Government.
Austerity be gone. Else we will.
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