Crash the train to stop it

[Ike Bana]

Originally Posted by whell

https://www.politico.com/news/magazi...-debt-00057606

Powell sounds like a big Volker fan. Volker crashed the economy to stop runaway inflation, fueling a recession that lasted through the early 80's. He got inflation under control but not after a few tough years. Powell is going to have a much tougher job.


This matters for a simple reason. When the Fed tightens the money supply and raises interest rates, it inflicts pain on U.S. taxpayers who must pay interest on the nation’s debt. The higher the debt, the higher the pain.

It was the Fed’s own experiments that helped create all this national debt in the first place. The Fed did so through an experimental program called quantitative easing, or QE. The importance of QE can’t be overstated. Under this program, the Fed created about 9 trillion new dollars between 2008 and today. (To put that in perspective, the Fed created only about $1 trillion in its first 95 years of existence. So it has printed 900 years’ worth of money in a little over 10 years, when measured against its historic rate.) All that money was injected straight into the Wall Street banking system, pumping up the very markets, like stocks and bonds, that are now threatened by the Fed’s tightening.

Years of QE and voracious spending, from Reagan to Bush to Clinton to Bush to Obama to Trump to Biden, all fueled by debt. And that debt sounds like its going to get a LOT more expensive.

Bullshit MAWA/Q-ANON PROPAGANDA. Goes right a long with the Covid-19 propaganda and the Ukrainians are all nazis propaganda.

Sabotaging QE
By Paul Krugman
WSJ 11/23/10

When short-term interest rates are up against the zero lower bound, whatever power the Fed has to influence the economy comes largely from its ability to affect expectations. This is true even for Bernanke-style quantitative easing: you can’t really push down longer-term yields unless the market believes that you’re going to keep buying until the rates are where you want them. It’s even more true when it comes to credibly raising expected rates of inflation.
So if a large political faction begins yelling and screaming as the Fed attempts quantitative easing, this will have the effect of undermining the policy’s effectiveness. And so it’s proving.

Sometimes printing more money is exactly the right thing to do. The "austerians" are wrong, the Keynesians are right.

First...this inflation and the price of fucking gasoline has nothing to do with Biden and Democrats. It has to do with Americans coming out of lockdowns and a pandemic and spending their brains out. Inflation is about simple supply and demand...the more demand, the higher the price, it's not fucking rocket science. Stupid fucking Americans hear about inflation and start buying more and more to beat the inflation and their reward is...more fucking inflaction. But the primary reason right now is corporatists are price gouging our fucking brains out. Just look at gas prices in the light of the obscene all-time world record profits and profit margins being racked up by big oil...it's all you have to do. The current price of WTI crude oil as of March 16, 2023 is 68.24 per barrel. Historically, and this is recent history, the cost of a gallon of regular when crude is $100/bbl is between 3.50 and 3.85/gal. Gasoline prices on average peaked at a record $4.10 a gallon in 2008, when oil hit $147 a barrel. We're paying between $3.50 and $4.10/gal all over the country, and the cost of crude is under, way under $75/bbl.

But nope we got a country half full of racist, anti-democracy seditionistas who get what they need to support their racism, sexism, bigotry and homophobia from their all day long doses of fascist alt-right propaganda all over the internet and selected media outlets. So here...in this little corner of the web, we can thank whell for the constant reminders of what we are dealing with.

My fucking apologies for using all of the words we have at our disposal, quite so often in this fucking post.