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Fed Considers Action

Job numbers are bad. The Fed weighs juicing the American economy – again. Should it do it now? We’ll hear the arguments.

Federal Reserve Chairman Ben Bernanke speaks to educators in the board room of the Federal Reserve in Washington, Tuesday, Aug. 7, 2012, during a town hall meeting. (AP)

Federal Reserve Chairman Ben Bernanke speaks to educators in the board room of the Federal Reserve in Washington, Tuesday, Aug. 7, 2012, during a town hall meeting. (AP)

Last month, Ben Bernanke was in Jackson Hole, Wyoming talking “grave concern” about American jobs.  Last week, the numbers came in.  Worse than expected.  And now, this week in Washington, the Fed is looking at big intervention again to try to move the US economy.

It’s part of the Federal Reserve Bank’s stated job to defend employment.  But its tools are wearing thin.  Republicans mutter that the timing is political.  Mitt Romney says it would fuel inflation.  But QE3 may be on the way.

This hour, On Point:  Should the Fed juice the US economy again?

-Tom Ashbrook

Guests

Ben White, Wall Street correspondent from Politico and author of the “Morning Money” column covering the intersection between finance and public policy.

Alan Blinder, professor of economics at Princeton University.

Martin Eichenbaum, professor of economics at Northwestern University.

From Tom’s Reading List

Washington Post “As the Federal Reserve prepares to take what is expected to be new action to stimulate the economy this week, divisions at the central bank may be undermining its efforts to speed up economic growth and lower unemployment.”

Bloomberg “Oil was little changed in New York as traders waited to see whether the Federal Reserve will announce measures to revive the economy this week.”

CNBC “After lackluster job creation in August, economists and the markets are readying for another round of Fed asset purchases, or quantitative easing. The only question now is do policy makers act in September or wait until the fiscal drag pulls down the U.S. growth rate?”

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  • http://profile.yahoo.com/H2OXD7NTOLDJZWZMM2DG6W6LC4 CBSSportscom

    Can the August job report be seen as showing “lackluster job creation” or can it be interpreted as showing companies are drawing on the inventory of part-time workers to fill full-time slots before moving on to the fully unemployed? The U3 number was cited as going down due to the number of people who abandoned the workforce yet the U6 (which would capture those disenchanted workers) went down .3% (largely due to a substantial decrease in part-time workers who would prefer full-time work). Is the unemployment story more nuanced than being reported?

    • WorriedfortheCountry

       No.  Almost 400K left the labor force. Another 41K vanished from the prior 2 month adjustments.

      If the labor participation rate was the same as January 2011 then the unemployment rate would be 10.2%. 

      We are close to free fall.

  • Yar

    What would happen, if instead of holding interest rates at or near zero, the Fed announced it plans to set a target of ten percent annual inflation rate? Think of inflation as an expiration date on money, use it or lose it.
    What would people do?  They would move money into something less likely to lose value.  Home values would go up, people would buy things because they know they will cost more next year.  Offshore money would come home and exports would increase.  The dollar would start to flow, people will quit hording dollars and jobs will be created to fill demand.  Wages would go up as demand increases.  I would love to hear a discussion about using inflation to move money out of park.  There are billions of dollars sitting on the sidelines because it isn’t really costing anything for people with money to just sit there.  The Fed can change that, maybe they will have more flexibility after the election.

    • WorriedfortheCountry

       The Fed has a dual mandate of low inflation and low unemployment.  Intentionally forcing inflation to 10% would violate half their mandate.

      • Yar

        Do economists take a hypocritic oath?
        Are you really Worried for the Country?  Are you an economist, a stock trader, a banker, an older white male worried for about keeping your privilege(a stereotypical republican)? 10 percent unemployment has been good for business, it is depressing wages, increasing productivity, and all on the backs of workers. 
        Quantitative easing is nothing more than an inflation tax, maybe delaying, but never avoiding inflation.  In effect, all debt, or deficit spending is eventually inflationary.  The Fed is artificially holding inflation low to delay the economic truth that we have less than we think.  Maybe there are short term economic and political reasons to tell this lie, but shouldn’t the other side of this issue also be examined?

        The entire financial industry is a tax on the flow of money. Not all productivity is created equal, an undocumented worker picking fruit adds more to the economy than a stock broker using high frequency trades to devalue my retirement account.  I am worried for this country too, I am worried about the people who feed us.  Who do you think guest of today’s show are worried about?  The Fed will eventually lose the ability to hold inflation down, like a sailboat heading into the wind, it is time for a different tack before they stall and end up on the rocks.  When that happens the workers will get hurt the worst.  What would happen if the minimum wage was indexed to the price of energy?  It would take a big sting out of inflation for the working poor.  Brazil used a virtual currency to manage out of control inflation.  They called it the URV (unit of real value.)  Indexing wages to energy will accomplish the same thing.  http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil

        When the inflation dam breaks there won’t be any soft landings. Can anyone make a realistic economic prediction past the election?

        • notafeminista

          Wow..how neatly this dovetails with yesterday’s conversation regarding education.  It’s not your fault if you’re not rich, or educated, or have nice things.  It’s most assuredly some older rich white male’s fault. 

          Tidy that is.

        • Don_B1

          The “inflation dam” is tied to the unemployment rate and is unlikely to break, short of political stupidity such as not raising the debt ceiling, until unemployment is well below 6%. At that time the Fed can restrain inflation by raising the discount rate, just as Volcker did to force the “Reagan Recession” of 1982, but this time it could be done BEFORE inflation got that high, since the Fed had generated the inflation and would not be reacting to outside “shocks.”

        • WorriedfortheCountry

           Yar, I wasn’t arguing with your idea just the process.  I believe Congress would have to change the Fed mandate to implement your proposal.

          I’m not an expert on Fed policy and sometimes I don’t think the Fed is expert either.  My sense is they’ve made a mistake in keeping interest rates so low but a jolt to 10% sounds like too much to me.

      • Don_B1

        But so far, the Fed has been doing next to nothing to keep unemployment down while inflation has been BELOW its “target” of 2%.

        The Fed need only state that it would not push its discount rate up while inflation was below 4% or 5% until unemployment stabilized at 6% or less to have a sizable impact on economic growth. This would allow the housing market to grow as housing prices rise with inflation, letting homeowners more easily get above water on their mortgages. This would create demand for new houses and the durable goods that are needed for them, and thus create jobs for construction workers and manufacturing, much of which is still done in the U.S., even though it takes fewer workers due to higher productivity.

        But you chose a number not in use by any economist just to rhetorically “win” the argument. It shows you to be deceitful and your argument unworthy, as usual.

  • AC

    No. They need to start serious re-education programs to make workers viable to place into modern jobs. Anything else is wasting more time….

    • WorriedfortheCountry

       Sorry but the Fed doesn’t educate anyone — the obfuscate.

    • Don_B1

      Because of the obstruction on fiscal policy to strengthen the recovery by Republicans in Congress, by allowing inflation to rise modestly above its current “target” of 2%, the Fed could strengthen the housing recovery and thereby the whole economy.

      ALL the recessions since WWII have had a major driver in the recovery of housing, which is held back by the fact that about 25%of all homeowners are underwater on their mortgages and young people are not forming families due to the job market.

      See my post in the thread above begun by Yar.

      • Brandstad

        NOTE: The democrats had control of ALL branches of government for 2 years!  Republicans could have staid home for those two years and it wouldn’t have had any effect on the lack of interst in the eoncomy by Obama, Pelosi, and Reid

        • Don_B1

          Another repeat of a claim long proven a lie. The Democrats had nominal control through 59 Democratic Party and one Independent from 7 July 2009 when Al Franken was sworn in after a prolonged election count fight by Sen Coleman, and 4 February 2010 when Scott Brown was sworn in for the seat vacated when Ted Kennedy died.

          But there many Democratic Party Senators were”blue dog” at heart and threatened to filibuster the health reform legislation over single payer, public option, and other issues, tying up the Senate and precluding it doing the necessary work to provide more stimulus which they did not support either, particularly as the Republicans got “traction” in the stenographer MSM on the red-herring issue of the deficit, which is a long-term serious issue, but one which cannot be realistically dealt with until the economy is back at full steam.

          But all of the above is well known to you. That it suits your short-term goals to regurgitate it every chance you get is obvious; the country’s future well-being depends on voters realizing that your arguments are a total diversion from realizing an understanding of what is really going on.

          • Brandstad

            Please name the house and senate majority leaders in 2008 & 2009!

          • Don_B1

            All that meant was that Democrats had nominal control of the schedule but did NOT mean that they had the votes to pass legislation opposed by Republicans.

          • Brandstad

            My comments speak the truth. 

             Obama’s recovery is headed towards recession.  We have had the worst economic recovery since the great depression.  Minority unemployment has doubled under Obama.  Labor force participation rates for white males is lower than any time since 1948!  Millions of people have left the workforce because there are no jobs!  Is this really what we want more of?  We have a president that doesn’t know how to lead or work in a bipartisan fashion as seen from his first 3.5 years.

          • Don_B1

            In other words, if a bully is beating up the honor student, the bully should be made valedictorian and the honor student sent to the corner with a dunce cap.

            That is the most certain way to convince the rest of the students that working hard and playing by the rules is no way to succeed in life. But picking rich parents from the elites is. Job creation does NOT come from rent-seeking.

            Obama has attempted be too bipartisan and the Republicans have played the Lucy hold the football for Charlie to kick it trick for too long.

            The Republican ability to keep its efforts below the water is being revealed and their secret obstruction is becoming more widely known.

    • Brandstad

      Didn’t the germans have re-education camps?  I don’t think they turned out to be that great!

      • Don_B1

        So now you are violating Godwin’s Law? When you post references of this type to things that had totally different missions as if the reference was relevant, that is where you have gone.

      • AC

        i’ll admit, ‘re-education’ was a poor word choice. but really? is all you can do is come up with a slanted and coy comment? this is a serious issue and i’m pretty sure the soon to be laid off 40year old post toffice worker would love to find a training/education program that will make him once again have a purpose. thanks for your useful suggestion, not….

  • WorriedfortheCountry

     No.  They’ve already spent $2T at a cost of $1M per job.

    Interest rates are already at historic lows. 

    Weakening the dollar increases the cost of oil and it looks like the Fed action is baked into both the stock market and oil prices.

    • Don_B1

      1) Cite an analysis and the data for your (false) claim!

      2) Low interest rates normally stimulate the economy but when they are near zero, the economy is in a liquidity trap as they cannot be lowered further except by increasing inflation (which the Fed could do by setting a higher target rate and promising not to reduce it until a criterion is reached) and by driving longer term rates lower, which drives investors to alternate investments which grow the economy.

      3) A devalued dollar makes manufactured goods (which the U.S. makes a lot of) cheaper in the international market, increasing DEMAND for them and thus giving an incentive for manufacturers to make capital investments and hire new workers. The price of oil is less important today where natural gas prices are low pushing down the cost of electricity used in most high-tech manufacturing.

      • WorriedfortheCountry

        I agree that the Fed might be making a mistake.  They are obsessed with the housing sector and that seems to drive all their actions.

        • Don_B1

          The Fed does not appear to be obsessed with the housing sector; it is just a fact of life that interest rates, set for the whole economy to grow, have a large effect on the housing sector, particularly in recoveries from recessions, and they take that into account.

      • Brandstad

        I am surprised you advocate a devalued dollar since it is a regressive tax that hurts the poor more then it hurts the rich not to mention the Zero interest rate policy that hurts savers and favors spenders when the spenders got us in this trouble.  Anyone in or nearing retirement is effectively having 1-3% of their money stolen from them every year through inflation and zero rate policies.  What is worst is these people were counting on a modest 3-5% return to fund their retirements.  

        • Don_B1

          1) The poor do not spend that much of their income on imported goods, clothing being the largest part of their spending for imported goods. But my guess would be that the poorer they are the more they buy ant second-hand stores where prices are relatively isolated from import costs.

          2) As Alan Binder made clear, the current low interest rates are more a result of an excess of desire for savings over demand for investment money, rather than the Fed policy of low interest rates. If the Fed were to effectively raise interest rates it would only draw more of that money that is currently going into spending productive investments that build the economy.

          If seniors want to get higher returns on their savings they should urge their legislators to borrow more, drying up the excess savings, and spend it in the economy to build demand for goods and services that businesses will invest and hire to meet. Then the interest rates will rise as unemployment falls and the economy will grow.

          • notafeminista

            The poor shop at WalMart.  The majority of their clothing is imported.

      • WorriedfortheCountry

         Which claim was false?

        Historic low interest rates?

        The jobs claim?

        I’m using the Fed’s own statement.  They printed $2T and claim to have created 2M jobs directly from their easing policies. Simple math my friend. $1M per job.

        Now you could argue -the aren’t ‘spending’ this printed $2T and it will be paid back but we really don’t know the cost and we won’t know for about a decade.

        • Don_B1

          I will argue exactly part you originally and “conveniently” left out was that the Fed purchased debt instruments with that printed money so it has paper that is within the interest rate/economic growth rate of what they paid for it and thus each “job” did not cost anywhere near $1 million, which was the misinformation you originally intended.

          And of course the exact price cannot be determined today, but unless Republicans in Congress continue or one-up their obstruction, that cost will be small compared to the economic and emotional damage being done to the unemployed. And to think that with stronger fiscal stimulus this effort by the Fed would not have been necessary.

          But it is nice to see that you are becoming aware that your previous blatant deceptions will not stand.

  • Wm_James_from_Missouri

    Over 70 million additional people are born on this planet every year above the number that have died. In five years that means that the world will have created another country equivalent in size to the USA. Almost all of these people will be born poor and remain poor for their entire lives under the worlds’ current paradigm. It also means that corporations will have an abundant supply of desperate and needy workers willing to work for extremely low wages. This will continue the cascade of falling wages relative to historical trends. The Fed will not be able to produce sustained stimulus through monetary manipulation alone.

    _Technology will continue to eliminate jobs at an ever increasing rate. ( We ain’t seen nothing yet. ) Our systems will continue to try to educate our young to work in jobs that will not be there long enough to pay for the education that was necessary to get that job !

    _ I’ve said it before and I’ll say it again.
    ***We need to move to a 6 hour workday; all basic benefits paid. With a shorter workday, we also need variable overtime rates.
    ***We must force ALL profitable corporations to pay CASH ONLY dividends and tax those dividends at the same rates as earned income. These policies should be enforced by a NON Fed agency. ( The Fed could use some competition ! )
    Making companies produce a taxable cash return will return profits to the people and communities that they live in and make Americans participate in their economic system !

  • StilllHere

    Any move by the Fed between now and the election would be seen as desperation on the part of a president who is grasping at straws to undo the failure his presidency has been.  For those of you who cannot connect the dots, any move would solidify the political nature of this “independent” government entity.

    • Don_B1

      In other words, the Fed has to do the Republicans’ bidding and keep a lid on the recovery until the Republicans gain power and then it can help in every way possible.

      The Fed must act “political” (not acting on the empirical data it has which supports action to lower long-term rates or allow higher inflation) to not appear “political.”

      WOW!! Isn’t that nice! Having your cake and eating it too.

  • Gregg Smith

    If QE1 and QE2 didn’t work, why would QE3?

    • Don_B1

      It is NOT that they didn’t work, they didn’t work well enough, and most economists knew that they would have only a small effect. But the size of the effect as long as it helps does not say don’t do it.

      But this would not be under discussion if the Republicans in Congress had not obstructed Obama’s attempts to help the economy, notably his American Jobs Act, proposed a year ago which even Republican economists (Mark Zandi, McCain’s economist) agree would have lowered the unemployment by over 1% by now.

      • Gregg Smith

        The “Stimulus” was supposed to have the rate at 6% by now.

        • Don_B1

          The prediction of the stimulus’s effect was made in late December 2008 or early January 2009, when the full scope of the Great Recession was not well understood. The unemployment rate was ALREADY 7.8% in January, 8.3% in February and 8.7% in March of 2009, well BEFORE the Obama ARRA even began to put money in the economy. Some slowing began by June as employers saw the prospects of better demand for their goods and services and peaked at 10% in October 2009 when the ARRA’s effects did begin.

          If the unemployment rate had not been that high, a full percent and more above what the “prediction” was based on and the extra stimulus such a deep recession required had been passed, the unemployment rate would certainly be under 7% and possibly near 6%. Because of the nature of a balance sheet recession, where a large part of the economy has over-leveraged its debt, the debt paydown takes longer than the other recessions that have occurred since WWII.

          The last previous recession ended up creating the Great Depression when President Hoover first tried austerity (cutting government spending) and President Roosevelt changed modes and went stimulus. He provided stimulus that created 10% annual growth in 1934 but got convinced to return to balancing the budget and created a second recession in 1937, making the Great Recession double dip recession driven.

          That is what will happen now if Tax/Republicans cannot bring themselves to a compromise on a resolution of the “Fiscal Cliff” the country faces on 2 January 2013 that precludes austerity in the short term (a few years).

          • hennorama

            Don I just want to say – thank goodness SOMEONE in here understands what a balance sheet recession is, and how it differs from the much more common “boom & bust” recessions that most people remember.

            This is what gives lie to the contention that the current recovery is too weak or not fast enough – the comparison to the typical boom & bust recessions people remember is completely invalid.

          • Don_B1

            I love to see the contradictions when some Republicans (or economists, e.g. Rogoff) argue that this recession will be longer than most recessions, and argue that the current unemployment level is the “new normal” because of the nature of jobs in the 21st Century but then deride Obama for not reducing unemployment faster.

            And thank you; my understanding comes after quite a bit of study on my own — economics is hard though some backgrounds give experience with things that do not operate at micro (e.g., quantum) or macro (e.g., economy wide) levels as normally experienced by an individual’s own life.

      • WorriedfortheCountry

         Mark Zandi is nothing but an Obama sycophant.  He is no great economist.  Left loves to throw out that he is McCain’s economic adviser as some sort of cover.  If I recall from 2008, the left accused McCain of being devoid of any economic heft.  Which is it — the Zandi who promoted McCain’s failed policies or the Zandi who poo poos every horrible jobs report to help Obama?

        There are two sides to the jobs bill saga.  The GOP have PASSED 32 jobs bills that languish in the Senate. Reid does not allow a vote.

        The cornerstone of Obama’s jobs bill is to use new borrowed money from China to hire local teachers — even if they are not needed — to improve the unemployment stats and union rolls in an election year.  Obama’s jobs bill does nothing systemic to improve the economy.  Crass politics.  That is all. The GOP is correct to block a bad bill.

        • http://profile.yahoo.com/EAYKORTHSLPQEZFKXBJMXMV2IE Tony

          Doesn’t this putatively “jobs bill” remind you of a 20th century soclialist idea of creating jobs for political convenience?

        • Don_B1

          Zandi’s job requires business people to respect his ability to analyze the current economy and predict the effects of various options, which obviously happens.

          I hope you don’t get burned by disregarding his input when it disagrees with your favorite Bill Gros look-a-like.

      • Brandstad

        Can you tell me how many stimulus plans Japan tried durring their “lost deccade?”  Can you tell me what their Debt to GDP was at the end of their stimulus programs?  Please also tell me how their economy was after the lost deccade!

        This is the path you and Obama are asking us to take, everyone should know history so they know our future if Obama is reelected!

        • Don_B1

          It is NOT the number of stimulus plans that Japan tried; it is the amount in Yen of stimulus that it tried. Just as it is not the number of meals you eat a day that make you fat or thin; it is the amount of calories in each meal.

          The Japanese could not summon the will to spend enough in each plan, just like the U.S. did not in the Great Depression until the threat of war with Germany and Japan motivated even larger spending which led to near full recovery BEFORE  the war actually began.

          Because Japan kept trying stimulus without doing enough in a short time, the Debt to GDP has risen to 200%, more than double our current ratio. But what they did was like applying a battery current to a car starter motor that was not enough to make the car’s engine turn over fast enough to keep turning on its own. Then by keep repeating with like currents they have lowered the energy stored in the battery.

          But if you apply a big enough battery, the engine starts and roars to life. Right now the economy is still spinning from the ARRA and a small additional current surge to the generator would get it roaring. But retreating to the equivalent of Republican austerity will slow the engine and leave the economy possibly too weak to be as easily revived as it was and would be with more stimulus now.

          Tax cuts and defense spending, the traditional forms of Republican stimulus, notoriously are poor stimulants, certainly compared to infrastructure and education spending. The best is unemployment payments because they get spent by people in need to keep them alive and well.

  • Mouse_2012

    Sound like a backdoor way to give taxpayers $$ to the big banks once again. 

  • Mouse_2012

    These also explains why Wall Street are licking their chops for the news of the Feds giving them more free money

  • Steve_the_Repoman

    As other world economies grow in relation to the US resulting in less primacy of the dollar, at what point is the FED no longer able to print money and keep inflation at bay?

    We have squandered an unusual period in world history that has allowed us to live well beyond our means and “winter is coming.”

    • notafeminista

      What us?  The individual lives beyond his means.  His neighbor doesn’t do it for him.

      • Steve_the_Repoman

        Consider a man/women/family who has lived within their means, owns their home outright, has 2 years salary in expendable cash, has affordable healthcare … and what ever other metrics you personally deem prudent and responsible.

        What would happen given the first statement above?

        • notafeminista

          It goes away.  Who doesn’t deem those metrics prudent?

    • Don_B1

      More than half of our public debt is held by individuals and businesses INSIDE the U.S. and even at these low rates this will continue until unemployment drops below 6% and then slightly higher interest rates will preserve it until Tea/Republicans do something stupid like not raise the debt ceiling or follow Ryan’s budget to unbounded deficits.

  • madnomad554

    I’ve posted this same info a couple of times lately, but it is key and central regarding the lack of jobs. Economists have noted that the industry that suffered the most job loss during the recession was the construction industry. Around 70% of all jobs lost were tied to that industry. You have to think broad here, meaning this would reach all the way into the forest and require fewer loggers, if there are fewer loggers cutting trees, then there are fewer chain saws being sold, fewer chain saws being sold means less 2-cycle oil being sold. The construction industry reaches deep.

    Consider all of the manufacturing jobs that effects, this wood include nails, staples, shingles, plywood, concrete, electrical, plumbing, paint, drywall, carpet and flooring, landscape…you get the picture. The construction industry is or was massive. So it seems reasonable to believe that 70% of all lost jobs were construction industry related.

    No Dem or Rep can put all these people back to work. Go back to building houses America at a pace that makes home ownership seem expendable. You’ll put all of these people back to work, however you will once again drive up the home price until you create a massive bubble and….POP!!! Recession all over again.

    • Don_B1

      Construction workers CAN be put to work insulating buildings, lowering energy costs by efficiency gains, etc.

      There is a whole cohort of young people waitimng to form families and move out of their parent’s homes into existing or new homes, which those workers can build.

      • Brandstad

        Why wasn’t this done using stimulus money insteadd of sending the Stimulus money to China for solar panels and Finland for a 100K electric car?

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Keep lying about FInland stuff, Branny. We know you’d do more factual if you could.

        • Don_B1

          There was money in the stimulus for this, but Obama had to get Republican support (remember from above where Al Franken was not sworn in until 7 July?) to get cloture of the Republican threatened filibuster, support for state and local government was cut along with infrastructure spending and used to increase tax cuts.

          No money went to Finland; the money was used to build facilities here in the U.S. See PolitiFact.

          The ARRA funds used in U.S. energy efficient lighting projects that ended up overseas came about because there were not enough manufacturing capability in the U.S. and a waiver of the U.S. Made requirement was granted to allow hiring of workers to begin immediately and begin saving energy and reducing CO2 emissions. But seeing the new demand, U.S. companies pulled manufacturing from abroad whence the waiver was withdrawn. The amount of money was a few $ million and well worth it in giving the incentives to increase manufacturing HERE. See PolitiFact for full details.

          It is disingenuous to inflame people’s anger over the Republican-sponsored recession and Republican-demanded conversion into a depression by providing at best half truths but mostly outright lies about the issue.

      • madnomad554

        That may be true to some degree, although it is currently thought that about 9 million of the unemployed were once apart of the construction industry…that would be alot of insualtion being spread around for sure. Where most Americans went wrong was they just built themselves too much house. The National Home Builders Association reports that the average sized home in 1970 was 1400 sq ft and in 2010 was 2700 sq ft. During that same 40 years, the average sized family shrank by one person. How do you justify the doubling of home sizes and the shrinking of families at the same time.

        Home owners simply built themselves too much home and ultimately could not afford them. Imagine if more home owning couples had built a home that only needed one paycheck to pay for…many would still have thier home instead of being bankrupt.

        This would mean smaller homes would have taken fewer workers in the overall construction industry and over the say past two decades would have been employed in some other industry, thus avoiding this bubble. Smaller homes would mean a smaller overall supply and demand for materials and workers. And I think things would not have gotten out of control.   

        • Don_B1

          This may be a case of the average not reflecting the larger reality. Certainly there were a lot of McMansions built, but remember that the average income of all the people in a room, originally occupied by a group of your friends goes up orders of magnitude when Bill Gates walks into the room. That is a bit hyperbolic, but it should convey the realization that some distributions have means (averages) that are quite different from the medians (the value of the item at the midpoint of the value ordered list of the set’s items).

          But that does not mean that a little inflation could not make them marketable to and usable by workers with good jobs.

          • madnomad554

             Well I am 43 and have only made more than $40,000 in a years time only once. I have never lived in  home larger than 1000 sq ft. I have not owned a credit card since 1994, but have a credit score of 813. I am in need of nothing, mostly because I don’t believe that I need or deserve everything there is to have, including a house pushing 3000sq ft.

             This country has the biggest economy in the world and achieves that mostly due to mass consumption. The US makes up only 3% of the worlds total population yet it creates 25% of the worlds garbage. That certainly sounds like mass consumption. If fact economists use the amount of garbage produced to gauge the health of our economy.

             If as a society and as a country most have enough to be the mass consumers of the world, then how do they not have enough to live off of? Oh right, they spent it all and then claim not to have enough money to live off of.

             Just because one can’t afford something, may not mean they don’t already have enough to live off of.

             Speaking of Bill Gates and his types, the mass consumers create, the so called 99%, created Bill gates, the 1% and turn around a complain about how much he and his types have. Pro athletes making 30 million per year, movie stars making 20 million per film, TV personalities such as Matt Lauer(14.5 million per year), the Justin Biebers and on and on. These too are the 1% right along with Bill Gates. All created by the so called 99%, the mass consumers of the world.

            I am not a mass consumer and refuse to play that role just so this country can retain its title as the biggest economy in the world. Quite frankly the only economy I am concerned with, is the one that resides in my wallet. The economists talk from both sides of theirs mouths, telling Americans they don’t save enough only to turn around the next day to say unless Americans increase spending the economy won’t recovery.

            By the way, I don’t own an iphone so I didn’t create Mr. Gates and I don’t own a TV so I don’t create the $100 million Simon Cowells of the world  

      • Call_Me_Missouri

        AMEN!

        But there are two things necessary to make this happen…

        1.  REGULATIONS making these upgrades MANDITORY.

        2.  Local, State, and Federal Grant and Loan Programs to help pay for it.

        Without these two things, you lovely idea will do as it has done for these past four years…  which is to Go… Nowhere…

  • Brandstad

    Jobs Gains By President.

    The attached picture is staggering.

    While the number parroted durring the DNC convention of 4.? million jobs created is true, it is also just as true that Obama lost 5 Million jobs so the full fact is Obama on net has less jobs in the US economy today then there were when he entered office!  The exact estimates varry from 200K-500K less jobs now then at the beginning and this is NOT good.  This is the worst economic recovery since the Great Depression!

    • WorriedfortheCountry

      The number of discouraged workers is stunning.

      If the labor participation rate was the same today as February 2010 (after recession had ended) then the unemployment rate would be 10.1% today.

    • http://profile.yahoo.com/EAYKORTHSLPQEZFKXBJMXMV2IE Tony

      And please do not forget the 125,000 to 150,000 new labor force entrants that are conveniently ommitted from the mythical 4.2 million jobs created.

    • Don_B1

      The “5 million jobs” you claim were lost by Obama were lost because of economic conditions largely created directly because of George W. Bush’s policies and actions, taken or not taken during his watch.

      Just as most economists do not blame Bush for the job loss in his first “x” months, Obama cannot be blamed for job losses that occur before his policies can take effect.

      [In these cases "x" can be three, six, or even 12 months.]

      • Brandstad

        this is from Kyle Pomerleau

        At the same point in the Reagan Presidency, after a deep recession, the unemployment rate had dropped to 7.5 percent from a high of nearly 11 percent 25 months prior. Obama, on the other hand, has only managed 8.1 percent unemployment rate from a high of 10 percent in 35 months.

        Also, at this point in Reagan’s presidency, the economy had added a greater number of jobs each month. At this point, he had added 4.078 million jobs to the American economy Whereas Obama has lost a total of 1 million jobs at the same point during his term.

        However, the disparity is even greater if we see what each president’s job numbers are using the end of their recessions as a starting point. Reagan had created a whopping 9.923 million jobs to Obama’s 2.797 million.

        During this same period in the Reagan recovery, the economy was consistently adding more jobs. Reagan added 168,000 jobs per month, 72,000 more jobs than Obama’s current anemic recovery.Obama’s continued poor performance makes it even more apparent that his policies have failed. The results of low-tax, pro-growth policies of Reagan are in stark contrast with the policies of big government from Obama. As more time goes on, the picture becomes ever-clearer: Obama’s big-spending and high taxes have failed the American people. No matter how many lofty speeches he makes, his policies will never work.

        • Don_B1

          See my discussion of George W. Bush Recession as a balance-sheet recession like that which caused the Great Depression. The Reagan Recession was CAUSED by Paul Volcker as Chairman of the Fed to drive down inflationary expectations built up from the OPEC Oil Crisis of the 1970s. As soon as Volcker determined that inflation had been beaten down, the discount rate that he had raised to force the recession was lowered and a housing boom followed that was a prime driver of the recovery. The Reagan stimulus of massive deficits from tax cuts and defense spending did not hurt, but it was the raising and lowering of the Fed discount rate that did the “heavy lifting.”

          Conclusion: the two recessions are NOT comparable in almost any way, particularly the deceptive (deceitful) way you did.

    • hennorama

      It is asinine to compare ANYTHING “by President.”  You cannot possibly believe that the world magically changes when a certain date occurs, such as the date a President enters or leaves office.

      This is so far beyond obvious that it pains me to type these words.

      Yes, Pres. Bush has left office, so everything that happens after Jan. 19, 2009 has absolutely nothing to do with him or his policies.  Yeahright.

      As the ESPN NFL analysts say – C’MON MAN!

  • TomK_in_Boston

    Ideological deregulation made a deep crash, and the deeper the crash, the slower the recovery. We have a Rockefeller republican president and a herbert hoover congress, so we are unable to follow the policies needed to help things along. That has dumped the burden on the Fed, a bad idea. This is the time for massive gvt spending. Infrastructure, R&D, something like the Apollo project, support for the states to re-hire public sector workers, that’s what we need.

    • Don_B1

      A third of the ARRA was devoted to just the things you mention; the only problem lies in the need for MORE which the Republicans are adamantly against.

      Michael Grunwald’s book, “The New New Deal,” goes into exactly how great the design of the stimulus was in setting out to develop a “new economy” that will carry this country well Bill Clinton’s bridge and into the 21st Century. It also gives the lie to the myth that Nancy Pelosi and Harry Reid did all the work and rewarded their “cronies,” with Obama “leading from behind.”

      Next read (or listen to the Terry Gross review on Fresh Air) of Michael Lewis’ article in the October Vanity Fair, “Obama’s Way”:

      http://www.vanityfair.com/politics/2012/10/michael-lewis-profile-barack-obama

      with a “review” at:

      http://www.vanityfair.com/online/daily/2012/09/michael-lewis-obama-lust-for-normalcy

      for the personalization that give many the feeling that Obama has made and can make in the future the right decisions to help the whole country prosper rather than rely on the false myth of trickle down from an enriched wealthy class that will turn out to be more rent-seeking than risk-taking job-creating entrepreneurs.

  • http://www.BornAgainDemocrat.com/ Martin Long

    Quantitative Easing is NOT printing money.  It is buying assets. The Fed (U.S. Govt) then owns the assets.

    I called into OnPoint this morning to make this point and they said “it’s an interesting point, I just don’t think we’re going to get to it this morning.” 

    Really?  You’re going to talk for an entire hour about the Fed and potentially more quantitative easing and you’re not going to even discuss how it works, and correct the mis-impression that we’re printing money?

    Wow.

    • WorriedfortheCountry

       Buying assets with what?

      • http://www.BornAgainDemocrat.com/ Martin Long

        Debt.  It’s like an IOU. That’s how government monetary policy works.  Please read the above (brief) article and comment if you’d like.  I’d be happy to post more if you’d like.  But I think the BusinessInsider article hits the main points.

        As I wrote above, there mere fact that intelligent people have a difficult time getting their brains around this, indicates that this misconception should be addressed.

        • jefe68

          Thank you Martin Long for posting some common sense and rationality into a what has become a disjointed topic.

          My problem as I read some comments it seems that there are people who want
          to go back to the gold standard and to abolish the Fed. A fair amount of Republicans and in particular the tea party wing, seem to want to
          move into this direction and even abolish the Fed. What see is a deliberate move on some of these politicians to discredit the Fed so they can point a finger and say: see it’s not working.

          So in this climate of a lot of misinformation it’s great to see someone post some sound grist for our mills.

          • Don_B1

            A gold standard is the death knell for maintaining a stable economy.

            Just look at the economic panics that came on average once every ten years or less in the late 1800s.

            Then look at the dates that countries went off the gold standard as the Great Depression stifled the world economy: there is a direct correlation of quicker recovery with quicker abandonment of the gold standard.

            The use of a common currency without a common fiscal adjustment between countries is at the root of the current European economic crisis as each country is tied to the common currency and cannot devalue the currency relative to the other currencies to control trade. Thus the common currency acts just like a gold standard for that trade. The European crisis is an inter country trade balance problem; the one exception is Greece.

            There is nothing good to be gained by going on a “gold standard” and a lot of bad things will happen given a little time as is indicated by the examples above.

          • http://www.BornAgainDemocrat.com/ Martin Long

            Let’s not forget that the practical leader of the libertarian wing of the Republican party (Rep. Ron Paul) has personal family history with the depression (as many families do) but also, through his grandparents, to Weimar Germany.  There is a great deal of fear of inflation in many with this background.  I’m not saying this is the only motivator.. but I am saying that it is a value which comes from someplace, and it may not be relevant in today’s modern economy.

    • Steve_the_Repoman

      From where does the money come to buy assets and if these assets are bonds, ect… what happens when the assets (Fannie Mae for example) vary in value or tank?

      • http://www.BornAgainDemocrat.com/ Martin Long

        Gentlemen, thank you very much for your comments.  This is PRECISELY why I called into the show suggesting that they discuss this issue.  It’s a little complicated to understand.

        Rather than typing a lot and trying to explain, let me forward you to a succinct summary:
        http://www.businessinsider.com/the-animated-gif-of-boy-throwing-money-out-of-the-window-is-not-a-metaphor-for-qe-2012-9

        Take a read and comment.  Maybe OnPoint will come to the conclusion that this is a central point which should be discussed.

        • WorriedfortheCountry

           Thanks Martin, I’ll check it.

  • Andy Addleman

    “Audit the Fed will limit the Fed’s independence”???  How about shed some light on the Trillions of dollars passing through it’s doors each day!!

  • rievler

    We suffer from a lack of demand. While the Fed will work at the margins using monetary policy to stimulate the economy, what is really needed is fiscal policy with large stimulus. Hundreds of thousands of decent paying jobs have been cut from government rolls in the last several years (and those are overwhelmingly state and local jobs).
    Fiscal stimulus should concentrate on aid to state and local governments so that trend can be reversed and infrastructure projects that last for the next several years. Chance of this actually happening are probably zero with the paleo tea party types wailing about deficits and incipient inflation. It’s coming any day now! The chicken littles have been crying this for years now-still no inflation.

    Brandstad-troll on.

  • WorriedfortheCountry

    Inflation rate is low?

    Only if you exclude food and energy.

    Another government accounting scam.

    • Call_Me_Missouri

      I get that…

      But the Inflation Number that is used by the Fed to make these decisions (which is really a reflection of the cost of Imports at this point in time, imho) has been very low and for a while there it was negative.

      Do I think they should factor the cost of food, housing, energy, and everything you need to live into the cost of inflation…  Sure…  but that is not the number they use now or have been using in the past and well…  it’s easier to compare apples to apples then apples to pineapples.

      • Don_B1

        The cost of food, housing and energy (like other commodities) are particularly volatile, so people see them when they go up and not so much when they go down and are correctly excluded from what is called core inflation. The term headline inflation refers to the inflation seen in all items purchased regularly by households, including those excluded items.

        But the inflated costs, if maintained, do work their way into the core inflation measurement through their impact on other prices (e.g., wages, transportation costs, etc.), just with a little delay. But when the volatile cost items prices retreat as they most often do, then there should not be an effect on core inflation.

        Right now food and energy prices are rising because of the climate changing effects hurting growing crops and energy prices are rising because all the easily and cheaply extracted fossil fuels are gone, leaving deeper and off coast oil and tar sands oil, whose extraction is only justified by future higher prices at the gas pump and home oil heating suppliers. These prices will rise more than fall and thus will affect the core inflation rate but only to the extent that alternative, less price volatile, energy sources are not developed.

    • rievler

       Yes, inflation is low and by historic standards. But that is only true in the fact-based world. In the hysterical, conspiratorial world view, inflation is skyrocketing from all that Fed based money.

      • Call_Me_Missouri

        In the Truthiness World?

    • hennorama

      It does always crack me up when inflation is discussed as “excluding food and energy.”  I always think “That’s great if you don’t eat, drive, or heat and cool your home!”

      Yes, it would be preferable if the measurement included these large cost components.  However, since so many things are coupled to the inflation rate/CPI (Soc. Security benefits, for example), changing the measurement would be disruptive.

  • Call_Me_Missouri

    It is RIDICULOUS that the Fed is being forced to act when clearly Congress should have done another HUGE Stimulus a long time ago.

    The Fed is acting OUT OF NECESSITY.

    There is ZERO economic evidence to support Mitt Romney or Ron Pauls view of the outcome of a QE3.

    We have not seen ANY Inflation and God knows we could use some inflation.  The policies the Fed are implementing are designed to prevent STAGFLATION which is the direction we are going into.

    When we start seeing interest rates over 0%, we can concern ourselves with inflation.  We are SO FAR from that now…

    I applaud Ben Bernanke for his brave and astute actions.  I didn’t think there was anything the Fed could do and yet here we are and they’re trying to do something which is more than Congress is doing….  STUPID LOSERS, CONGRESS!

  • MadMarkTheCodeWarrior

    Whoa… 1/4 point on let’s say a 2% growth rate represents a 12.5% increase in our current growth rate so that is a significant change in our current environment!

  • Matt Wade

    People got no jobs, people got no money. The Fed’s mandate is full employment. If they are not using every weapon at their disposal to achieve this, they are failing the American people.

    Also, 10 year T-bill rates are 1.59%. People are basically PAYING the govt to take their money. It’s stupid and cowardly to hesistate.

    • Andy Addleman

      Full employment is a myth. Have you ever read an economics book?

      • Matt Wade

        Your mom is an economics textbook.

      • Call_Me_Missouri

        Full Employment is 5% unemployment. That’s not a myth.

      • rievler

         Don’t be a moron. Full employment is a term meaning a rate at which low unemployment doesn’t drive inflation of wage rates. Somewhere in the range of 5-6%. The question is-have you read an economics textbook?

  • Call_Me_Missouri

    Tom,

    It is NOT the Fed’s Job to “Get Things Going”, but when Congress is so RETARDED that they won’t ACT on the behalf of their constituents, the Fed HAS to act.

  • MadMarkTheCodeWarrior

    That’s rich… Perry is doing just that… playing politics in this environment. So he’s guilty of the very charges he’s laying at the feet of Bernake!!!

  • Matt Wade

    A gif-based explanation of the jobs issue. Amazing.

    http://www.businessinsider.com/bernanke-vs-woodford-in-gif-form-2012-9 

  • Matt Wade

    Matt Yglesias says it best:

    “But if you want to understand why Ben Bernanke can’t adopt the policies that would repair the American labor market, all you have to know is this. If he fixes the problem, then people will (rightly) ask why he didn’t do it two years ago and his reputation will be in the toilet. He needs it to be the case that the only tools at his disposal are risky and of questionable efficacy. Large-scale asset purchases conducted without a clear nominal target are at least a little risky, and they’re not very effective. At this point, that’s a feature not a bug for Bernanke. It’ll help a little, but not a ton, and public and elite appetite for doing more would be limited. If he says “hey, Michael Woodford and Christina Romer and Charles Evans and Jan Hatzius are right, let’s start pairing these asset purchases with an explicit nominal GDP level target” and the economy starts rapidly improving, that will show what a disaster his tenure in office has been. So it won’t happen.”

  • Steve_the_Repoman

    Who keeps track of the FEDs “assets” and what they are really worth?

  • Tbarlow

    I liked it when the dollar was strong against other currencies.  How about bringing back some of the 100 MILLION jobs that are lighting up China’s economy.  Partriotism equals “keep those jobs and factories here”  

  • MacMillin

    Take the 1.5 trillion and apply towards the 1trillion in student loan debt. My guess is that you will discover a huge easing on the middle class. I also would like to know what evidence we have as taxpaying investors to the effect of QE1 and QE2 on the middle class, trickle down stats or whatever report that directs an ROI for wage earners 250k and below.

  • Robert Whitaker

    Why does no one talk about the audit from July? 17 Trillion in foreign bank and business bailouts and no one in the country bats an eye. “Journalism”.

  • Richard_in_Vermont

    It is time for USA to change colors from being a stalemated Red and Blue Government, to a Purple Government and, get to work to fix the economy!

  • Andy Addleman

    AUDIT THE FED! 
    AUDIT THE FED! 
    AUDIT THE FED! 

    • rievler

       Mr. Addledbrain-
      Repeating it or shouting it won’t make your point(if you have one) more meaningful.

      • Don_B1

        And auditing the Fed will not create one new job as it will inhibit the Fed from making the politically controversial  but empirically based decisions which are necessary for the Fed to attain the best balance between its two mandates of stable prices and low unemployment.

  • Robert Whitaker

    THIS IS MORE IMPORTANT THAN ANYTHING THEY ARE TALKING ABOUT!
    http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

  • Emily Antul

    How about this: You give me a job that pays the bills and leaves me enough leftover to have some spending money and I’ll go spend it. I hate these economists. They have no idea what it’s like down here with no jobs that pay enough. 

    • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

      We need the elites to live down here where we do.

      • Don_B1

        That is one reason that the top marginal tax rate needs to go up and have a new bracket starting somewhere around $10 million or a bit lower; it would reduce the incentive for corporations to have executive compensation 500 times that of the corporation’s average wage.

  • MadMarkTheCodeWarrior

    So we have a surplus of capital. Tax cuts on the wealthy freeing up more capital won’t make individuals or business invest more!

  • Tbarlow

    If we keep stimulating the economy aren’t we lowering the value our currency in the global marketplace? Maybe China will keep their currency low until it works for them to strengthen it — when they’ve got all the factories and 100′s of millions of jobs that they want… Economists from right to left always say, “those jobs aren’t coming back.”  Why?  Isn’t it in our interest to have real factories building our tax base and creating more related jobs…

    • Call_Me_Missouri

      Lowering the value of our currency is a blessing.  It makes our Exports more attractive, it will eventually hurt China’s pinned currency (if it has not started to hurt them already) and until the cost of our imports really start to go up…  I think we should keep it going.

    • rievler

      Huh? We need fiscal stimulus(Congress), monetary stimulus is largely played out. What little we got back in 09-10 is finished. So in reality there isn’t nearly sufficient stimulus now occurring.

      “Weak” currency is in no way related to testosterone. A weak currency makes our goods cheaper in relation to our competitors and encourages the very manufacturing that you seem to support.

    • jefe68

      China owns about 8 percent of publicly held U.S. debt.
      The reality is China and the other nations holding our debt have know where to go. People need to use some common sense about this. We do need to deal with our debt and the deficit. As was rationally discussed on today’s show there needs to be a larger influx of government spending with long term cuts down the road that are based on some good policy ideas not the BS Paul Ryan is hawking.

  • http://www.facebook.com/scott.wilcoxson Scott Wilcoxson

    The President can’t do anything. The Fed can’t Do any more. The key to unlocking this Economic Logjam is the one thing that has been left out of this economic recovery: The Workers. Until the people with money start investing it in Workers, this economy is going nowhere.

    • jefe68

      No, it’s Congress. They have done nothing, nada and less than that. It’s been one big gridlock after another in that house of idiots. I have blame for both sides of Congress but the lions share goes to the Republicans, who have been the party of no. The obstruct everything.

      • Gregg Smith

        How can you make that claim when so many jobs bills and budgets have passed the House only to die in the Senate? Many never even get a vote. It would be one thing if they failed but they don’t get a vote because Reid is afraid most will pass. President Obama is the problem, he has Reid on a short leash.

        • jefe68

          What planet are you on?

          • Gregg Smith

            Earth. What did I get wrong? Are you saying Reid didn’t kill bookoos of jobs bills?

        • Don_B1

          Because declaring a bill will create jobs does not make it so, except in the fictional world of Republican fantasy.

          • Gregg Smith

            I agree but why no vote? Wouldn’t Reid’s argument be stronger if 32 jobs bills were defeated by the legislative process? Wouldn’t Republicans then be forced to compromise in good faith? He has the majority. If any of the numerous  House passed bills passed the Senate then Obama would VETO them and shoulder the blame. He doesn’t want that so Reid carries his water. 

      • Brandstad

        Thanks for putting the blame on the minority party for the majority of Obama’s term in office to date!

        When did you stop looking out for minorities

        • Don_B1

          When they act as criminals kidnapping the hard workers who would revive the economy.

  • Robert Whitaker

    Yea money The Fed prints to buy debt (give it to banks and businesses) is totally going to help me and not devalue my money with increased liquidity because I’ll somehow get that money. I just have no idea how yet.

    • jefe68

      You are clueless and don’t even know it.

      • Robert Whitaker

        I’m saying the money doesn’t simply trickle down, and if the total number of moneys increases and you don’t get any based on the current percentage value of your money, your money has gone down in value through increased liquidity. Even if you did get the equivalent amount to make up for the liquidity increase the dollar value would be lower. It’s like having 10 out of 100 total moneys and then suddenly tomorrow there’s 1000 total and you don’t get any more. Your 10 is now worth 1 compared to yesterday.

         And think about the timeline for the Fed. Panic of 1910. Fed created in 1913 to prevent bank runs. Then the great depression occurs and the only banks that really survive are national banks subsidized by the Fed while thousands of private banks failed. The Fed did it’s job for the banks in it’s boards interest only at the time and created a banking monopoly this nation is still suffering from today.

        • jefe68

          Which is why FDR created the FDIC.
          Banking use to be a boring profession until the 80′s and 90′s. 

          I agree with you one some levels but I fail to see how the Fed, which has been backed into a corner by Congress on this issue.

          I’m all for breaking up the banks and bringing back the Glass–Steagall act,
          but that’s not going to happen.

          Both parties are in up to their necks in this regard.

          • TinaWrites

            Thanking you in advance, in case i dont get to see your reply for awhile: can you tell us why glass-steagle wont come back. Is it purely the standoff between repubs and dems? What are the Other Factors?? Thanks!!!

  • Robert Whitaker

    “Oh, you don’t have anything of consequence or importance to say and would like to applaud The Fed for “paying attention”? OF COURSE WE’LL PUT YOU ON THE AIR!”

  • http://www.facebook.com/profile.php?id=745185020 Cory Heaton

    That caller Jill just made so much sense to me. At least the Fed is doing something! Absolutely agree. 

    • Robert Whitaker

      Whatever plant.

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         Yeah, the old, any action is better then none.

        For sure, that ‘s true. /s

  • MadMarkTheCodeWarrior

    I love it… the very uncertainty created by the Tea Party Madhatters is undoing our economy!

    • Andy Addleman

      So the completely corrupt, bank purchased, Republicans and Democrats are the way to go?

  • https://openid.aol.com/opaque/862139a4-e557-11e1-bc17-000bcdcb2996 Webb Nichols

    It is still very simple. there are more people in the USA than there are jobs. Deflation is in play. Lower salaries less money to spend. Manufacturing moving to point of distribution in the emerging markets for cheap labor and a reduced carbon footprint. 

  • Robert Whitaker

    Quantitative Easing? Not fluffy rainbow kitty money printing time?

  • jimino

    The very idea that providing more cheap money to the financial sector will have any beneficial impact on job creation or on anyone but those in that sector is utterly indefensible, either in theory or in practice, as evidenced by past efforts to do so and the fact that interest rates have never been lower.

    The best way for the government to create jobs is……(are you sitting down?):  PAY PEOPLE TO DO A JOB.  And it needs to be at one that actually provides a benefit to our country, as opposed to driving around and getting blown up in a hostile foreign country in an unwinnable military conflict.

    • Robert Whitaker

      High speed rail system. National direct fiber internet system. Infrastructure anyone?

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         The US is becoming a third world country.

        If many more Americans traveled abroad they would be screaming their heads off about the state of this country.

        Since they don’t they just scream USA, USA.

      • jefe68

        Funny you should mention our poor internet system. We rank 30th in speed when compared to other nations. 30, not even in the top 20.Countries that have faster speeds than us, South Korea is #1, then it’s Lithuania (no.2), Latvia (no. 3), and Moldova (no. 8) all have faster connection speeds that we do. This morning I have nothing but issues with Verizon’s DSL connection. I rate it from so, so to plain awful. 

        The GOP is not interested in creating jobs, that’s just electioneering and what I call the politics of cynicism. High speed trains? Don’t hold your breath. We can’t even fix our schools, bridges and roads. Right now there are thousands of bridges, water main systems and natural gas lines in desperate need of repair in almost every state in the nation. Nothing is being done, and nothing will be done.

        • Gregg Smith

          The government cannot create a job without first confiscating some ones money, borrowing it from China or in this case printing it. You may not like it but it’s undeniably true.

          • jefe68

            Confiscating some ones money?
            What kind of absurd comment is this? Next you’ll be calling for the Fed to be abolished and that the US should go back to the gold standard.

            The government is not printing more money. China only holds 8% of our debt and guess what, they and everyone else have know where else to go.

            The US government can borrow at 2% interest which is absurdly low and we need to create jobs at the same time we have a huge need to the infrastructure to be fixed and upgraded.

          • Robert Whitaker

            There should be a standard. That’s the problem. It doesn’t have to be gold but we have no certain value of money which allows for greater manipulation and corruption by bankers. Right now monetary values are loosely based on relative GDPs with some speculative made up numbers thrown in. The value of money should be determined exclusively by the market based on a standard not by speculators and not by a board of bankers looking out for their own interests. Even if that standard was made up it’d be fine since it would be in place and we’d know the rules. Right now the rules are The Fed and speculators make the rules.

          • jefe68

            Gold would be a bad idea. Historically it was a disastrous to modern economies. Now, well there is not enough gold in reserves to back up the current economies of the world.

            So what do you propose?

            I’m for stiffer commonsense regulations that are enforced. Also breaking up the to big to fail banks and Wall street investment banks.

            The rules are rigged for the top to win, but then again they are writing them.  I think Bernie Sanders has some very clear ideas on this, but he’s a loan voice in a forest full of political rhetoric and dogma.

          • Gregg Smith

            Taxation is confiscating money. I’m not saying it’s bad or good or at what level it’s appropriate. The government does not have andy money to meet payroll with out the three options I gave. How can you deny that? Why do you dismiss it?

            This show is about (among other things) the possibility of QE3 (printing money). It says so on the top of the page.

          • jimino

            Taxes are no more confiscation than paying for a necessity like food.

            As Oliver Wendell Holmes said: “Taxes are the price we pay for a civilized society.”

            So I guess it all depends on what you think that’s worth.

          • Gregg Smith

            I pay for food with my money, I pay for someone else’s food stamps with my money too. 

            I’m happy to pay taxes but it’s certainly not worth endless blank checks without accountability. I think they should be able to get by on a couple of trillion a year. 

          • Mike_Card

            C’mon, Gregg.  You say you’re populist, but that comment makes you sound like a teabagger.

          • Gregg Smith

            Never said I was a populist.

          • Brandstad

            You are right, the fed isn’t printing money, they are just digitizing it and putting numbers representing money into the bank accounts of banks and corporations that are politically connected. 
            Bernanke May Hit Limit From Buying Too Many Treasuries
            http://www.bloomberg.com/news/2012-07-23/bernanke-considers-how-much-treasury-buying-is-too-much-economy.html

          • Brandstad

            61% of the Federal debt is now bought by the FED.

            One might ask how the FED has the money to do that.

          • jerwest

            The Fed gets money from its depositor institutions…Bank of America, Citi, Goldman Sachs, etc, etc…they keep cash in the Fed when they have nowhere else to put it.  Hence, the Fed is trying to GET RID of that cash, and flood the market with liquidity.  Now, like every other bank, it has a high level of leverage so it borrows many more times (on the order of 2 Trillion) than its deposits, which are on the order of a few hundred Billion.  Before we can have an opinion, we need to understand what is going on. 

          • StilllHere

            Exactly!
            Tax money.
            Borrowed money.
            It all comes from the same pot.
            You and me!

      • TinaWrites

        High speed rail ONLY after a long, open, public discussion. In some places, lots of small minivans might serve more people better, but the volume needed could be equal to the hi speed rail, giving as many jobs. Also hsr in some places can wreck farm land. No need to do that!! Do intelligent, wanted infrastructure work and find ways to train and employ local people for the work of construction and later of maintenance. Get rid of Colonialist ideas while thinking these projects ino actuality!!

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

     The elites are not concerned about structural high unemployment in this country.

    They should be.

    • rievler

       Another right wing canard. If unemployment were structural, there would be wage inflation in the sectors that supposedly suffered from the problem. If you are interested in studying the issue, please see below link. And this is from a nominally right leaning economist.
      http://www.kansascityfed.org/publicat/sympos/2012/el-js.pdf

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         There’s no wage inflation because there’s global labor arbitrage.

        • rievler

           Perhaps a mitigating factor, but I don’t think labor moves like money. Talk about sticky! Wages move more readily than people, double that from an international aspect.

          • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

             Yes, wages move more readily then people. That’s why people whose wages are lower have the jobs moved to them.

          • TomK_in_Boston

            You think it’s bad that the right thinks teachers are fat cats because they make $75K? The translation of “being competitive” and “free trade” is that American wages should be the same as in the 3′rd world.  Then, we can be 3′rd world too.

  • Pingback: Institutional Forex News on: 9/12/2012 17:51 | Forex News Stream

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

    We can’t, and we won’t start rebuilding our infrastructure because the Republicans are crazy.

     

    • Robert Whitaker

      “The United States has essentially a one-party system and the ruling party is the business party.” -Noam Chomsky

      R and D are just factions trying to get credit and distribute blame.

      Think about Obama’s identical foreign policy to Bush and Romney’s identical healthcare package to Obama.

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         While I don’t disagree why would corporations want to have the infrastructure of their country crumble beneath them?

        Because they have no allegiance to this country and think they are going to move on to Asia.

        • Robert Whitaker

          Exactly they’re buying into emerging foreign markets because it’s more profitable than doing anything domestically.

          • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

             You really need to frame it like I did if you want our government to do anything about it.

        • Steve_the_Repoman

          Recently on This American Life.

          Scorpion talks Turtle into ferrying him across river.
          Scorpion stings Turltle.
          Before going under Turtle questions the wisdom of Scorpion.

          It is in the Scorpion’s and the Corporations’s nature

        • TomK_in_Boston

          Yes. The current crew of executives are “internationalist” (once code for commie by birch soc) oligarchs with no loyalty to the USA. Also, their time horizon gets shorter every quarter, and they don’t care if the bridge collapses after they’ve cashed in.

          • TinaWrites

            You’ve described The Heart of the Matter!!! When we wonder WHY would there be so much obstructionist behavior, this is the answer.

            BUT we should be able to get the people in Congress to stop going along with this corporate trajectory. Do you know whether Congress owes citizens something along the lines of a fiduciary responsibility?? Is there a law?? Could there be?? Start with campaign finance reform that unseats citizens united. Then add a formula for how corporations are defined and registered. So maybe there would be a o/o of trustees on corp boards that have to come from labor. Maybe to avoid certain tariffs, a certain o/o of the corps’ jobs would have to stay within the 50 states, followed by a second o/o for US territories. I’m just brainstorming, but some of these ideas come from reports I’ve heard about how differently corps were structured in the 1960′s. I hope my ideas don’t lessen the significance of where they came from: the fact that pure globalism results in the loss of corporate patriotism, as you pointed out so well. Also, even our gov’t is more devoted to the economy as it is now practiced than to our democracy!! Of course we need a healthy economy, but if the price is detrimental to the basic sustenance and homeostasis of our citizens and democracy, we can see that the cart is before the horse. We’ve got to stop Right fighting Left and come up with a lot of totally new ideas!! I think that Marx knew that pure Capitalism could bring us to this state. Surely there are more than two ideas!!

        • Don_B1

          They also think only in the short term; they decided they could move manufacturing to China, etc., even though by having a Chinese (government) company own at least 51% of the operation, they were giving up trade secrets, etc., counting on being able to develop the next step ahead of the Chinese.

          They may have missed the point where the next step has to come from a combination of basic research, which NO company does, expecting the government to pay for it, and their development people working closely with the manufacturing workers.

          Thus all new technology will leave for Southeast Asia, etc. by mid-term in their time warp. The thing is have them pull it back, which will be difficult, but in areas like clothing manufacturing it is happening.

    • rievler

       Amen to that brother. Though I’d say there is still a shadow of the old repubs around like Boehner. Unfortunately they(and this blog) have been hijacked by trolls who shout platitudes and talking points no doubt focus group tested to trigger knee jerk amygdala response.

      • Robert Whitaker

        “knee jerk” like when someone agrees to a blanket statement blaming an entire political party for something?

        • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

           Well, the Republicans do vote in lock step.

          And you know that’s true.

          • Robert Whitaker

            Yea it’s just ironic to me since the two party system has evolved into the media creating these exact reactions with things like gay marriage and abortion and idealism to distract us from frivolous spending and our elected officials never ending fight to increase government footprint that is happening on both sides of the aisle every day.

          • Don_B1

            Sorry to report that extension of rights to people who have previously been discriminated against is not a distraction.

            Richard Florida has studied areas that are most productive in creating new industries, etc., and they are largely in areas of more diversity rather than less.

          • TinaWrites

            It’s pretty horrific to picture what kind of privatized K-12 education they’ll support. Altho they say it’ll be about “choice”, it will be about “LOCKSTEP”. Then think about what kind of democracy we’ll have.

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        Does it matter if Boeher (Lugar, etc) are “still care about governance” Republicans when Boehner and such are not in charge?

        If Boehner, for one, pretends to be something they’re not long enough to survive politically, aren’t they that something?

      • TinaWrites

        Boehner speaks with a teaparty forked tongue all the time.

    • hennorama

      As the speaker said, it’s crazy that we are not rebuilding our infrastructure when we have a confluence of available supply of construction workers, super-low long term interest rates, and a massive need for the repairsa nd improvements.

      Those who say that government should act more like a business should consider this – what would a business do if they had a clear need for a construction project, super-low cost to borrow, and a ready supply of workers?

      • TomK_in_Boston

        The class warriors love to compare the USA to “a family sittin’ around the kitchen table” saying how they have to cut back in tough times, conveniently ignoring how the USA family controls it’s own currency and has the power to tell rich uncle Mitt it’s unsustainable for him to keep paying 13%.

        But OK, fine, The “family sittin’ around the kitchen table” needs a new roof and they discover can borrow the money for 10 years at 1.5%. Any questions about the decision?

    • Shag_Wevera

      Crazy like a 1% fox.

    • harverdphd

       Start at $15 an hour and I’m in

  • Andy Addleman

    All of you Keynesians should enjoy your day in the sun while it lasts. The Austrian school will prevail!

    • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

       It may prevail but America is headed into third world status when it does.

    • jimino

      Yes!! Just look at, uh, you know, whatitsname.  You know, the place that it has actually been implemented an tested in the real world.  Oh, I forgot the name of the place.  Please remind me.

      • Ray in VT

        Is it a Latin word that translates roughly as no-place?

    • TomK_in_Boston

      When do we get the Keynesian policies?

  • William

    The “smartest people in the room” are not so smart after all. 

    • harverdphd

       Unless there from harverd

  • mokachip

    What about deconstructing interest rates?
    Have a tiered rating system:Keep rates LOW for borrowers& have HIGH rates for citizens–seniors to students & all in between–who have savings & other investments.This could encourage SPENDING in addition to encourage SAVING.

  • hennorama

    Since the Great Recession was a balance sheet recession, the private economy (individuals and businesses) are continuing to rebuild their balance sheets by paying down debt and increasing savings.  So borrowing and spending are muted, and we have an “L-shaped” recovery.

    This recovery is about 3 things: demand, demand and demand.  While we ARE in recovery, it still feels like a recession because growth is slow and unemployment is high.  I’ve dubbed this “The BBQ Recovery” because it is and will continue to be low and slow, like making barbeque.

    The Fed’s QEs have had only marginal impacts, because the money they are paying to banks and Fannie Mae & Freddie Mac has not been recirculated into the economy.  These institutions have significantly added to reserves.  Banks, Fannie and Freddie have all tightened their lending standards.  In addition, credit worthiness of individuals and businesses has declined as a result of the GR and increased defaults on loans of all types. This is a double whammy.

    Don’t get me wrong – the QEs have had POSITIVE effects.  My point is that they have been marginal, and QE 3, if there is one, will also  only have a marginal positive impact.

    I doubt the Fed will act until after the election, for 2 reasons;

    1. The European Central Bank has taken significant recent actions and the German high court has deemed German involvement is legal

    2.  The Fed wants to be perceived as politically neutral

    • TomK_in_Boston

      Good analysis. Nice to see analysis instead of ideology on OnnPoint or a change.

      QE has had one major impact, it has pumped up the stock and bond markets. With low rates almost guaranteed for some time, money has got to seek return somewhere. Bonds that otherwise would look risky after a looong run just keep climbing.

      History shows that the deeper the crash the longer the recovery. We came within a hair of Great Depression II and a slow recovery is expected. Nothing can speed things up but massive gvt spending and it’s not gonna happen.

      • Brandstad

        TomK,

        Nice tone, but you are wrong on the details.  When you said “History shows that the deeper the crash the longer the recovery.” which is not correct.  Please see the attached chart showing the percentage of jobs losses relative to the peek employment point before the recession.

        • TomK_in_Boston

          The chart confirms what I said.  The Bush crash was the worst crash since the Great Depression, so recovery is slower than in the post-WW2 recessions. 

          • Gordon Green

            It also seems to show that the rate of job loss started decreasing as soon as Obama took office.

          • TomK_in_Boston

            Obama’s actions, including the “failed stimulus”, stopped the Bush free fall. That’s obvious. Too bad the ideological ostriches can’t pull their heads out of the sand and see it. Too bad we can’t have more Keynesian spending.

          • WorriedfortheCountry

             More unprovable straw men.

          • neurohazard

            OF COURSE THE STIMULUS WORKED! Just look at GDP charts. Q4 08 saw a drop of whopping -8.9% from the previous quarter. Q1 09 saw that slow to -6.7 then -.07.

            http://www.tradingeconomics.com/united-states/gdp-growth

            The Stimulus and TARP worked to stop the Bush economic collapse. But the Stimulus wasn’t big enough. Obama prolonged the slump by not getting parasitic speculators out of the commodity markets, not restricting Wall Street away from speculation into productive activities, not getting banks to LEND all that free money they were getting from the Fed.

        • neurohazard

          Pray tell, when since the Great Depression have we had a true implosion of the banking sector which then brought down two engines of the economy: the housing and automotive sectors? Reagan didn’t even have to deal with that and his peak unemployment was 10.8%, higher than under Obama. Reagan had unemployment above 7% for FIVE YEARS. What helped the economy in the 80′s was the collapse of oil prices… and we don’t have that now either.
           

          As I’ve said before… the far Right shows NO remorse or second thoughts about their policies that destroyed the economy. They’ve already found their scapegoats and are all ready to do it all over again, only this time on steroids.
           

      • StilllHere

        How’d we get out of the depression of 1920-21?

  • hennorama

    To me, the most worrisome part of this recovery is not the overall unemployment rate, but rather the duration of unemployment, and the percentage of unemployed workers who have been out of work for more than 6 months.

    The most recent data from August shows average length of unemployment is more that 9 months (39.2 weeks), with 40% of unemployed workers having been out of work for more than 6 months (27 weeks).

    These rates remain stubbornly high, which is very troublesome.  This cohort of long-term unemployed workers numbers over 5 million.  They are unfortunately the least likely to get work both in the near term and when the economy becomes more vibrant.

    The consequences of persistent long-term unemployment are high to both the individuals and to society at large.  These workers are in danger of becoming impoverished and invisible, to both employers and policy makers.

    Any government efforts to reduce unemployment should focus on the long-term unemployed.

    • harverdphd

       Germany has people on unemployment for YEARS

      • hennorama

        It’s unclear what your comment means.  Do you mean that it’s common for unemployed workers in Germany to be unemployed for years, or do you mean that unemployed workers in Germany can collect unemployment benefits for years, and thereby be “on unemployment?”

        Regardless, there are great differences between the labor market in the US vs. Germany.  For example, workers in Germany have considerably greater protection from job loss than US workers enjoy.  As a result, there is much less movement of workers, and much longer worker/employer relationships.  In addition, there is a more equal sharing of the impacts of a recession among German workers vs. in the US.  For example, it’s much more common for average hours/worker to be reduced (thereby preserving jobs) instead of laying off workers.

        In addition, job training starts much earlier.  Roughly 3 of every 4 German students complete a paid internship, conbining hands-on training and classroom instruction.  The educational system works in partnership with employers and unions, and career training is practically universal.

        This is paid for by both business and government, as they both recognize the value of career training.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      That’s serious stuff. In every other recession since the Great Depression, when the unemployment rate has been this high, Congress didn’t go around fretting about sending the wrong message.

      They simply extended unemployment benefits, and said to hell with the ninnies fretting about “moral hazard (only when it comes to the working and middle class)”.

    • StilllHere

      The longer you’re unemployed, the more your skills degrade.  Many we should shorten unemployment benefits, giving people more incentive to take a job.

      • neurohazard

        What about going back to WPA or CETA style work programs when unemployment gets over, say 8%? Unlike paying for long-term unemployment benefits, at least the nation will get something for its money.

        Hell my dad worked for the CCCs in the 30′s and I had a CETA reseach job back in the late 70′s. Before I headed the project, my boss was a laid off engineer from Hamilton Standard. It was anything but “make work”. The city still uses today the research we did 3 decades ago. Same with a friend of mine who was hired to do research for the City Planning Dept.

        I suspect this commonsense option is off the table because the GOP won’t tolerate such work programs. Reagan killed CETA… which was a shame. He should have made it contingent on the unemployment rate.

      • hennorama

        Indeed, without add’l training/retraining while unemployed, skills degrade and an unemployed worker is much less attractive to a prospective employer.

        Our agreement ends there, however.

        While the availability of UI benefits has SOME marginal impact on the labor market, it is not much of a disincentive to job search or acceptance of a job offer.  Maximum weekly benefits are not especially generous, ranging from a bit under $250 in AZ, LA and MS to a high of $625 in MA.  No one’s getting rich collecting UI. 

        In addition, it helps if there are actual available jobs to take.  The most recent data from the BLS indicated there were 3.664 million job openings in July 2012, versus 12.794 million unemployed persons.  This means there were about 7 people unemployed for every 2 job openings.  You may quibble with how the BLS measures this stuff, but the fact remains that the ratio of unemployed/job opening is high.

        Let’s say all 3.664 million openings are get filled tomorrow.  What should the more than 9 million unemployed workers left behind do?

        Finally, your contention about skills degradation argues more in favor of training/retraining programs and/or targeted incentives to employers who hire long-term unemployed workers than reducing available UI benefits.

  • jefe68

    I pay for food with my money, I pay for someone else’s food stamps with my money too. Gregg Smith
    I’m glad you posted this comment as it really lays out the underpinnings of your philosophy. Seems to me what you are saying I’ve got mine and the hell with anyone else.

    OK, if that’s how you are going to parse this argument then I hope you
    have some real deep pockets to hire a fire brigade, some armed security
    and a good road maintenance crew.

    The SNAP program works pretty well and it provides people in need with help. Most households on food stamps (75 percent) have children, seniors or
    disabled citizens. And most households (85 percent) have income that is
    below the poverty line ($23,050 for a family of four in 2012).

    Moody’s Analytics has suggested that every dollar spent on the program generates $1.72 in economic activity.Wow, it’s even cost effective.
     

     

    • Gregg Smith

      ” Seems to me what you are saying I’ve got mine and the hell with anyone else.”

      Er… no, not at all. I DO pay for other’s food already. More and more… and more and more, every day, fine. HE’s the “Food Stamp President” don’tcha’ know. I’m a very generous person if I can say so. You have no idea as you shouldn’t, that’s cool. The only ones complaining are the ones getting the food. Go figure.

      You always come back to the potholes, as if. You guys write of putting money in peoples pockets or government created jobs (that never go away) and more “stimulus” with astonishing disregard to where it comes from. QE3 is a big deal. $16 trillion in debt is a big deal. Raising taxes in this climate is a big deal. We spend 100% of GDP. There are trillion dollar deficits as far as the eye can see and I simply ask where the money comes from and I want to fill potholes and fight crime. It’s ridiculous.

      • neurohazard

        I truly want to vomit. Please get off your self-righteous horse.

        Please explain how YOU personally are paying anything for anyone at a time when we’re borrowing a trillion a year? It’s our kids and grandkids who are paying for what we spend.

        We The People have pissed away some $15 TRILLION on ourselves the past 30 years that REFUSE TO TAX OURSELVES FOR. This is a policy YOU support.

        So PLEASE spare us all your self-righteous nonsense. You’re just another Free Lunch Right Winger who favors all those irresponsible tax cuts. It’s you who wants us to Party at the expense of future taxpayers. How goddamn noble.

        • Gregg Smith

          Alrighty then.

          • neurohazard

            Greggg always says that when he knows he’s been exposed, can’t admit it, and is at a loss for words for even a lame attempt at a snappy comeback.

            Perhaps one of these days… after my asking endless times, he’ll finally explain how we could afford the Bush tax cuts when we in 2001 were SIX TRILLION in debt and Bush ran on paying down the debt. He even said so again in his first State Of The Union.

          • Gregg Smith

            Okey Dokey.

      • andres velandia

        Govenment spending, fiscal policy and monetary policy are not some left wing new inventions retard. Look at any Economics 101 book or class. This is the only things that government can  manipulate to influence by stimulating or halting the economy, the rest is up to the free market. 

        • StilllHere

          Wow, “this is the only things” … who’s the special ed dropout?

      • burroak

        what was the number that George W. Bush left this great nation in deficit….how many trillions. President Clinton left a surplus. President Bush left trillions in debt. Albeit it is not at all easy to balance a budget; question is what makes up that delicate formula.  Also, when you mention the government, is it accurate to say the American populus makes up the government. It is too bad that they no longer teach American Civics in High School. 

        • StilllHere

          Prove it.  Left us a stimulus, ha.  For your sake, I’m hoping you don’t do your own taxes.  Apparently you skipped the high school math classes.

          • burroak

            First, I do not work in the public sector, second, FYI, I took math in high school, thirdly, I am not berating Gregg, simply commenting, and last…you prove it!

          • StilllHere

            It’s your point.  If you can’t back it up, I guess I’ll have to chalk it up to your sub-par intelligence.  The public sector was your only option.

          • burroak

            So brilliant, I applaud your conversational adeptness

          • neurohazard

            You mean Clinton left us a “surplus”?

            Are you one of the Surplus Deniers?

            Of course if you are, and also supported the Bush tax cuts, then you’re DOUBLY irresponsible.  

          • Gregg Smith

            I owe 10 million but I have $20K in the bank. I have a surplus… right?

          • burroak

            Hmmmm.

          • neurohazard

            Please stop playing dumb Greggg. You KNOW an annual budget is just a snap shot. It doesn’t negate DEBT which was 6 TRILLION when Bush took office. Clinton… yes Clinton got to a surplus and he didn’t need Newt… though he helped a bit. All that hard work to get to a surplus and the GOP rushed to sabotage it as soon as they could.

            But if you are finally admitting the obvious WE HAD DEBT, then that makes even MORE irresponsible your fanatical support of Bush’s reckless tax cuts which sabotaged debt paydown.  

          • StilllHere

            The Republican Congress achieved the surplus despite Clinton’s protests.

        • Gregg Smith

          The only deficit I’m concerned with is Obama 4 consecutive trillion plus dollar deficits. He called Bush “unpatriotic” for adding 4 trillion in 8 years and he added 5 trillion in less than 4.

          • burroak

            I would not call President Bush unpatriotic; he certainly had his fair share of national security challenges. O.k, both presidents had their deficits, which one had a more cooperative congress?

          • neurohazard

            Of course Bush ran up his deficit when HE WAS HANDED A SURPLUS from Clinton… and BUSH promised to pay down debt.

            Bush didn’t really pay that favor to Obama… now did he. Despite your partisan whining Bush inherited some disaster, it really Obama who did. Want to compare stats? Didn’t think so.

          • Gregg Smith

            Debt increased over $5 trillion in less than 4 years. There’s no stat like that anywhere in the universe.

      • StilllHere

        Gregg, I wouldn’t worry about him.  He appears to work in the public sector and is stimulus dependent.  

        • Gregg Smith

          He’s very quick to assume the worst in people.

      • http://pulse.yahoo.com/_4H5AK25QCSTR3SQ3XP6AVRQJCQ Kai

        There are lots of ways to “pay” for these services, projects, etc., some of which you may or may not like. Most of this would have to happen together in a broad budget/fiscal deal that seems inevitable, it’s just what do we have to go through (e.g. “Fiscal Cliff”) to get there.

          > Boost employment through public-private initiatives like an infrastructure bank where private companies invest as well (ROI is high);
          > Raise taxes on high earners after a certain point, whether it’s triggered by economic determinants or time;
          > Major review of many bureaucracies, including and especially Defense, to see what is working and what is not, what is duplicative, etc., and have TARGETED (not absolute) spending cuts that will have the least effect on the efficacy of the programs;
          > Work on ways to reduce OVERALL health care costs, not just Medicare/Medicaid, through the ACA, which was always supposed to be a starting point and not an end point;
          > Raise the FICA cap so higher earners pay more after the $106,800 that is now the limit.

        Working towards full employment is key because then the Treasury will have more revenue and the knock-on effect of consumer spending will increase aggravate demand. As you can see there are many ideas, and these are just off the top of my head, yet the point remains that there are many ways to bring down the deficit/debt AND help the economy. Let’s do it.

    • harverdphd

       So if they can’t buy bread, can I buy their medical insurance too?

  • neurohazard

    One of the callers was correct. With ultra-low interest rates the Fed is pushing people away from savings accounts. But where do they go? Where else can one earn some return except in speculative markets usually manipulated by the predators and sociopaths on Wall St.
     

    Yup, this bodes well for the economy!
     

    • StilllHere

      Spend it losers, that is what you can do for the economy.  

      • neurohazard

        How did the US get away from deferred consumption, where citizens saved as a way of earning interest while providing seed money for investing in our communities and the nation, to an economy totally dependent on consumer spending?

        Perhaps that’s a natural consequence of dropping interest rates to zero.

      • burroak

        What does that mean, that all losers are children?

  • andres velandia

    In an ideal word QE3 would work. But the problem is not a lack of money or a lack of funds. Many companies are sitting on piles of cash and are not investing or hiring claiming they lack the confidence. In the meantime the people in the board of directors of these companies are giving directly and indirectly mountains of cash to a guy (Mitt) who is promising them tax breaks and lower rates that will save them and their companies a lot more money on the long run. The truth is they don’t want the economy to do better, at least not yet. They have money and are comfortable. And are able to blame the slow recovery on this administration. They are going to keep the economy hostage until they get their way. Not until they put their guy in power

    • StilllHere

      You are a joke.  People with money want the in parasite ‘n chief and his lackeys in Congress to move on because they are killing our economy and threatening American prosperity.  This administration is anti-business and anti-investment.  Their goal is government confiscation of all free assets.

      • neurohazard

        And your proof of your claim is….

        [crickets]

        Oh ya, I forgot. WBUR doesn’t require anyone who posts here to be truthful or rational… only polite.

      • burroak

        Interesting, is there proof of this?

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        You need to adjust your tinfoil hat; it’s squeezing your cranium.

    • Michele

      The policy was encapsulated in Romney’s comments played in the intro: Don’t do anything right now to stimulate the economy so close to the election…

  • WorriedfortheCountry

    It is clear we need pro-growth tax policy ASAP.

    The Fed can tinker at the edges but it won’t do much.
     

    • StilllHere

      Pro-government growth?  That way it’ll trickle down to the rest of us.

    • neurohazard

      Of course coming from you “pro-growth tax policy” means more tax cuts for the rich.

      The Right has tried for decades to sell the American People this works. Yet all their studies and stats are somewhere between lies, half-truths and the laughable.

      This is the Right’s Big Lie that never dies because it serves two key purposes. One: it brings home the bacon to the rich, the only constituency the Right cares about. Two: such irresponsible tax cuts create massive deficits/debt which can be used as a pretense to slash the New Deal and Great Society safety net… programs the Right has always loathed, but could never run for office opposing and win. So they’ve worked the past 30 years to sabotage these programs through irresponsible fiscal policy. Now they’re going in for the kill.

  • GrueneJim

    Republicans and Democrats agree on most everything. They like to talk, and they love drama. But most of all they love creating a smokescreen for the career bureaucrats printing play money in the back office. 

  • JCat5

    Yet another economist mistakenly stating that the debt is caused by social security and Medicare and that reforming these programs would reduce our existing debt.  With the exception of medicare part D, the obligations of social security and medicare have always been met by the payroll tax, the trust fund balances, and the medicare premiums.  The debt is not from social security and medicare.  Counting the trust fund balances as debt, because the trust funds consist of treasury bonds, may be legitimate, but past surplus payroll tax income was not used to pay entitlement obligations.  It was used to pay for other government spending.  We achieved our current debt from over spending and/or under taxing on programs other than social security and medicare.  Pretending entitlement reform will fix our debt will solve nothing.  

  • Jeff Kraselsky

    Open Congressional Discussion on passing “The” or “A” portion of the Jobs bill.  ie: Work and you get Paid. Rehab our infrastructure of roads and bridges, Recycling, solar and wind with all US made components.  Rehab the empty houses with US products. Effects all industries and tradesmen.  NO NEW HOUSE CONSTRUCTION QUALIFIES.
    Community programs can qualify to rehab current livable structures to energy efficiency.
    Benifits all across the board and monies well spent.

    Regulations MUST apply to stop Large corporations from skimming profit centers off the top before materials and services are implemented for manufacture and production.

  • http://www.facebook.com/profile.php?id=100000823069322 Dave Kaplan

    If tax cuts and stimulus both increase the deficit. Wouldn’t it be better to get something out of the increased deficit, like better infrastructure and jobs where the workers would go out and spend the money they make?

  • mmaaaxx

    End the Fed! It’s a criminal organization of the worst possible insider’s club which benefits those at the top with cheap, free money before the inflation works its way into the system. By the time that cash get’s to the bottom, it’s worth far less and we all get the shaft!

ONPOINT
TODAY
Jul 25, 2014
Pallbearers carry a coffin out of a military transport plane during a ceremony to mark the return of the first bodies, of passengers and crew killed in the downing of Malaysia Airlines Flight 17, from Ukraine at Eindhoven military air base, Eindhoven, Netherlands, Wednesday, July 23, 2014. (AP)

Secretary of State Kerry to Israel. Obamacare back in the courts. Mourning as remains of Malaysia Flight 17 victims come home. Our weekly news roundtable goes behind the headlines.

Jul 25, 2014
An oven full of hot pies in Beth Howard's Iowa kitchen.' (Courtesy Beth Howard)

There is nothing more American than a piece of pie. We taste and talk pies.

RECENT
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Jul 24, 2014
Orchid (Galileo55/Flickr)

We’ll look at the new science of what plants feel, smell, see – and remember.

 
Jul 24, 2014
Youths seen playing basketball through bars on a window at the Wisconsin Department of Corrections Ethan Allen School in Wales, Wis. (AP file)

The cold hard facts about juvenile prisons. And the case for shutting them all down. Plus: former Secretary of State Hillary Rodham Clinton is with us.

On Point Blog
On Point Blog
Hillary Clinton: ‘The [Russian] Reset Worked’
Thursday, Jul 24, 2014

Former Secretary of State Hillary Rodham Clinton took time out of her global book tour to talk to us about Russia, the press and the global crises shaking the administration she left two years ago.

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Where Did Nickel Creek Go?
Thursday, Jul 24, 2014

The Nickel Creek interview originally scheduled for Thursday, July 24 is rescheduled for an as-of-yet undetermined later date. We explain why.

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Our Week In The Web: July 11, 2014
Friday, Jul 11, 2014

As we prepare for a week of rebroadcasts, we reflect on Facebook posts, misplaced comments and the magic of @ mentions. Internet, ASSEMBLE!

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