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strategery blunder

(4,225 posts)
47. And it hasn't worked well because of other issues that only Congress, not the Fed, can address.
Tue Mar 29, 2016, 04:59 AM
Mar 2016

Interest rates have been so low for so long that we should be experiencing really, really high inflation right now. We're really not. There's some, especially in rental housing, due to the aftereffects of so many foreclosures in the Great Recession and suppressed wages making it difficult to fund down payments. But outside of rentals, and maybe some food staples, there's not a lot of inflation, because even though unemployment has drifted down, wages haven't risen.

Any inflationary effect that the prolong low interest rates might have had seems to me like it has been offset in a decrease in the velocity of money, because wealth inequality has SOARED in the last decade. More than 90% of the economic gains of the "recovery" have gone to the top 10% (And that is actually quite an understatement because I don't have the exact numbers right now, so I am being conservative with them). Obviously that economic recovery isn't really being paid out in wages.

And rich people don't spend money, they hoard it, which has the effect of taking it out of the economy.

Only Congress can address that, for it would take some form of taxation and redistribution to get the hoarded money circulating in the economy again. The Fed has done what it can, but it is faced with a Congress that refuses to do anything with "that man" in the Presidency, and therefore the Fed lacks the tools to address the ACTUAL problems with the economy right now.

(Yeah, I know...the rich "invest" their money, but mostly by outsourcing to other countries, and 2008 showed us what some of those "investments" are like.)

A start TrueDemVA Mar 2016 #1
they will pay it back eniwetok Mar 2016 #4
So double taxation for the same benefits. OnlinePoker Mar 2016 #6
some canadian money is invested OUTSIDE the country eniwetok Mar 2016 #11
regressive vs progressive eniwetok Mar 2016 #54
It's not just taxation to pay back the interest OnlinePoker Mar 2016 #57
That's still a dumb idea Recursion Mar 2016 #38
LBJ and the "unified budget" NT 1939 Mar 2016 #48
It isn't raising alarm bells because the trust fund is supposed to be spent. jeff47 Mar 2016 #2
no guarantee the GOP will implode eniwetok Mar 2016 #12
There's no guarantee the sun will rise tomorrow Major Nikon Mar 2016 #14
it's untenable if the only new revenue is from eniwetok Mar 2016 #23
I'm speaking about the GOP, and not SS Major Nikon Mar 2016 #25
There's only so long the Democratic party can keep the Republican party alive. jeff47 Mar 2016 #17
where did you get 30 years from? eniwetok Mar 2016 #24
The 2034 claim started in about 2004. jeff47 Mar 2016 #30
I don't know where you got those numbers eniwetok Mar 2016 #40
From previous reports. Just because they're not online does not mean they do not exist. jeff47 Mar 2016 #41
*Applause* Recursion Mar 2016 #39
Is that you Pete Peterson? Fuddnik Mar 2016 #3
hardly eniwetok Mar 2016 #8
There it is! -none Mar 2016 #35
The rate that the government lends to itself is inherently trivial Taitertots Mar 2016 #5
2.8 trillion is trivial? eniwetok Mar 2016 #9
You're missing the point FBaggins Mar 2016 #15
of course... eniwetok Mar 2016 #37
"Lent and spent". It's gone. Every penny comes from increased taxes Taitertots Mar 2016 #50
shifting the tax burden... eniwetok Mar 2016 #52
The obligations are independent of the income stream. Taitertots Mar 2016 #53
see post above eniwetok Mar 2016 #55
of course interest payments come from the same source... somewhat. eniwetok Mar 2016 #56
Sorry... untrue FBaggins Mar 2016 #7
what's "untrue"? eniwetok Mar 2016 #10
The entire premise of the article. FBaggins Mar 2016 #13
sorry... you're incorrect eniwetok Mar 2016 #19
Apologies... but you still don't get it. FBaggins Mar 2016 #34
missing the math? eniwetok Mar 2016 #42
interest rates are set by Congress eniwetok Mar 2016 #22
Well, yeah Congress can always amend the SS Act. But until they do that, it's pretty much a market Hoyt Mar 2016 #28
comparable interest paid eniwetok Mar 2016 #43
Nope. They're tied to market rates FBaggins Mar 2016 #33
so you want to cut benefits? eniwetok Mar 2016 #21
Lol... nope FBaggins Mar 2016 #32
when you eniwetok Mar 2016 #44
Ultra low interest rates are not healthy for the economy in general... Wounded Bear Mar 2016 #16
nope... I don't favor privatization eniwetok Mar 2016 #20
In general, I agree.... Wounded Bear Mar 2016 #27
I think they have driven rates down in the hopes of spurring job creating business. Hoyt Mar 2016 #29
Low interest rates also reduce unemployment and generally boost the economy. jeff47 Mar 2016 #31
low interest rates eniwetok Mar 2016 #45
And it hasn't worked well because of other issues that only Congress, not the Fed, can address. strategery blunder Mar 2016 #47
And NO privatization Omaha Steve Mar 2016 #18
Raise the cap. nt WhiteTara Mar 2016 #26
or stop exempting capital gains eniwetok Mar 2016 #36
and, not or... Wounded Bear Mar 2016 #46
Ultra low interest rates... sendero Mar 2016 #49
Agreed. Allowing giant banks to borrow money for free from the taxpayers without no requirement GoneFishin Mar 2016 #51
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