Pages

Jump to bottom

4 comments

1 lostlakehiker  Thu, Sep 13, 2012 12:30:10pm

The discussion here takes it as axiomatic that when the Fed does something it describes as intended to help the economy, the action it takes does in fact help the economy.

The GOP, correctly or mistakenly, tends to the view that when the value of the dollar is uncertain going forward, because the Fed is unpredictable and may from time to time decide to issue however much extra money it thinks is needed to boost employment, this undermines long term prospects.

Consider, for instance, home mortgages. If inflation is high, then banks must charge a high interest rate just to cover the inflation. But potential buyers may be wary of borrowing at interest rates which would be punitive if inflation moderated. Nobody knows. The deal falls through.

We've been through this several times already. Issuing money to offset a rise in real GDP, or to offset a drop in the velocity of the money already circulating, is not inflationary. Issuing money when there is no corresponding increase in real GDP, and when the velocity of money has stabilized, drives up prices and disrupts commerce. And what if the velocity of money picks up? What shall then be done with all the money already issued? The fed can sponge it up again, but only at the price of creating further distortions and disruptions.

Milton Friedman, who did after all win a Nobel Prize in economics, explained in great detail the hazards of putting inflation control on the back burner.

2 Bulworth  Thu, Sep 13, 2012 12:56:32pm

Inflation has been on the front burner. Addressing unemployment hasn't been on any burner.

3 wrenchwench  Thu, Sep 13, 2012 4:53:06pm

The Fed is the reason our economy is recovering better than Europe's is. Ron Paul should move to Spain.

4 Bob Dillon  Thu, Sep 13, 2012 10:40:01pm

Theoretically "this time it's different" because the program is open-ended, and the mortgage debt purchases can continue indefinitely.


This page has been archived.
Comments are closed.

Jump to top

Create a PageThis is the LGF Pages posting bookmarklet. To use it, drag this button to your browser's bookmark bar, and title it 'LGF Pages' (or whatever you like). Then browse to a site you want to post, select some text on the page to use for a quote, click the bookmarklet, and the Pages posting window will appear with the title, text, and any embedded video or audio files already filled in, ready to go.
Or... you can just click this button to open the Pages posting window right away.
Last updated: 2016-01-01 10:29 am PST
LGF User's Guide RSS Feeds Tweet

Help support Little Green Footballs!

Subscribe now for ad-free access!Register and sign in to a free LGF account before subscribing, and your ad-free access will be automatically enabled.

Donate with
PayPal
Square Cash Shop at amazon
as an LGF Associate!
Recent PagesClick to refresh
3 Midwest State Polls Trump at ~35% Approvalnbcnews.com These three NBC/Marist polls were conducted August 13-17 — after the Aug. 12 unrest and violence in Charlottesville, Virginia, and in the midst of Trump’s multiple responses to the events. In Michigan, 36 percent of voters approve of Trump’s ...
Rocky-in-Connecticut
3 hours, 14 minutes ago
Views: 108 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
Ten Sailors Missing After U.S. Warship, Tanker Collide Near Singapore SINGAPORE (Reuters) - Ten sailors are missing after a U.S. warship collided with an oil tanker east of Singapore before dawn on Monday, tearing a hole beneath the waterline and flooding compartments that include a crew sleeping area, the ...
Thanos
6 hours, 35 minutes ago
Views: 146 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
University of Texas Removes Four Confederate Statues Overnight AUSTIN, Texas — University of Texas President Greg Fenves ordered the immediate removal of statues of Robert E. Lee and other prominent Confederate figures from a main area of campus, saying such monuments have become "symbols of modern white ...
Thanos
6 hours, 37 minutes ago
Views: 182 • Comments: 0 • Rating: 0
Tweets: 1 • Share to Facebook
Shares: 0
Comments: 0
: 0
Why You Can’t Take a Flag to a National Cemetery Why You Can't Take a Flag to Arlington (or other national veteran cemeteries) Stars and Stripes, reprinting with permission an article from the Washington Post, explains why you cannot take a flag to Arlington National Cemetery (or any other ...
Anymouse 🌹
2 days, 12 hours ago
Views: 307 • Comments: 0 • Rating: 2
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
Another Democrat Starting Trump Impeachment Process Come on guys, get behind the bill. All of us. we should get behind this bill as it emerges as fast as we attacked the BCA. Following Donald Trump’s equivocating of white supremacists and those who oppose them in ...
Unshaken Defiance
3 days, 21 hours ago
Views: 535 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 1
Comments: 0
: 1
How Militias Became the Private Police for White Supremacists Magazine Guns to a protest? Clubs? We can not tolerate anti American militias. The bloody weekend in Charlottesville that began with several hundred chanting white supremacists on a torch-lit march will long be remembered for the searing image of a ...
Unshaken Defiance
3 days, 22 hours ago
Views: 534 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
Starting in 2018, Police Dogs Injured in the Line of Duty Can Be Transported by EMS to Veterinary Clinics ST. CLAIR COUNTY, IL – Ambulances are for people. It’s always been the law of the land. In Illinois, it'll soon be "almost always". Illinois Governor, Bruce Rauner, signed House Bill 2661, Tuesday. It will allow police dogs to ...
Birth Control Works
4 days, 1 hour ago
Views: 523 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
The New War on Birth Control - Pacific Standard Although it wasn't clear at the time, the attack on Phillips marked the beginning of a new anti-contraception movement—conceived in the U.S., but unfolding in Africa, where women's frustrations with the dearth of safe, effective family planning options are ...
Birth Control Works
4 days, 2 hours ago
Views: 583 • Comments: 0 • Rating: 1
Tweets: 1 • Share to Facebook
Shares: 0
Comments: 0
: 0
M83 - Do It, Try It (David Wilson Video) M83 - Do It, Try It video by David Wilson. Following the video's premiere at Sundance Next Fest it is now available to watch online. The track is taken from M83's seventh studio album Junk, available to buy & ...
Thanos
4 days, 16 hours ago
Views: 457 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0
Marvel’s the Defenders It’s all coming together. Learn about The Defenders from the stars themselves: Charlie Cox, Krysten Ritter, Mike Colter and Finn Jones. Marvel’s The Defenders premieres globally August 18, 2017, only on Netflix. Watch The Defenders on Netflix: netflix.com SUBSCRIBE: ...
Thanos
4 days, 16 hours ago
Views: 488 • Comments: 0 • Rating: 0
Tweets: 0 • Share to Facebook
Shares: 0
Comments: 0
: 0