Comments on: Two Sets of Ideas From the White House

By: John Torrey

John Torrey — Thu, 02 Feb 2012 16:52:38 +0000

Romney in last Thursday’s debate, on Fannie and Freddy:

“He should have been anxiously telling the American people that these entities were causing a housing bubble that would cause a collapse that we’ve seen here in Florida and around the country. And are they a problem today? Absolutely. They’re offering mortgages, again to people who can’t possibly repay them. We’re creating another housing bubble, which will hurt the American people.”

*Everybody* knows we are NOT “creating another housing bubble.” To say we are is disqualifying.

By: Tyler

Tyler — Thu, 02 Feb 2012 16:21:40 +0000

A low federal funds rate led to the Great Recession. Conversely, a high federal funds rate led to the prosperity of the 90s.

By: the buckaroo

the buckaroo — Wed, 01 Feb 2012 22:32:55 +0000

…and this is a band aid approach to the hemorrhaging. The principal is the killer. Weed out the obvious scammers & give relief to the unwashed masses. Was it their fault a few bad players (post Glass era) screwed the pooch?…just saying.

By: the buckaroo

the buckaroo — Wed, 01 Feb 2012 22:01:38 +0000

… rumor has it Sen. Bernie Sanders to sponsor & introduce “Right to Alternative Energy” bill requiring Enterprise Zone agglomerations for the manufacture & assembly of solar & wind devices to be installed on all applicable private & public property throughout the sunbelt…California to Florida.

In conjunction with Smart Grid build out, the ability to serve the industrial & business community during peak hours drives oil to secondary alternate status.

…woke up, got out of bed, dragged a comb…

By: Chigliakus

Chigliakus — Wed, 01 Feb 2012 20:45:48 +0000

Am I misreading or is this guy actually claiming that a high FED funds rate leads to a boom and a low rate leads to a recession? I think he needs to test his model against empirical evidence, if he even has a model.

By: Michael

Michael — Wed, 01 Feb 2012 19:52:08 +0000

Not all deficits are created equal. The marginal propensity to consume of the recipients of the largesse is key.

By: PeonInChief

PeonInChief — Wed, 01 Feb 2012 19:32:16 +0000

Hmm. If we were bailing out homeowners by forcing cramdown on the investors and the banks, it might make sense. Homeowners get refinanced, and bankers take the losses they so richly deserve. But refinancing underwater mortgages? That’s subsidizing the banks, as an underwater mortgage has a very good chance of failing even if it is refinanced at a lower interest rate. One lost job, one illness, one death or divorce, and that refinanced mortgage is in foreclosure–and we the people get to pay off the bankers. And we get to pay them as though there were no housing bubble and the shack was really “worth” $350K.

Bad idea.

By: Tyler

Tyler — Wed, 01 Feb 2012 19:23:59 +0000

“High interest rates force the federal government to pay more interest on its bonds, notes and bills. Low interest rates allow the federal government to pay less interest. Government interest payments go into the economy (except for foreign payments). This enriches and stimulates the economy. Low interest rates provide less money, so enrich and stimulate less than do high rates. This is why, contrary to popular myth, low interest rates do not, cannot and never will grow the economy. If you own any T-securities, you understand that the government pays you less when rates are low, which gives you less money to spend.

“In short, the Fed’s low-rate policy reduces the federal deficit, which in turn, reduces economic growth.”
- Rodger Mitchell, rodgermmitchell.wordpress.com

By: cat

cat — Wed, 01 Feb 2012 18:03:36 +0000

Because Uncle Sam is sitting at his kitchen table balancing the checkbook and realized income doesn’t match his spending so he’s tightening his belt just like Real Americans would. /snark

Its depressing to think about, but most of the people elected into the US Government are either incompetent or feathering their many different metaphorical beds. Then you have the GOP culture warriors whose goal is to do the opposite of whatever the Dems want. It leaves very little room for people willing to do the right thing.

By: Michael

Michael — Wed, 01 Feb 2012 16:55:51 +0000

I don’t understand why the obvious solution to the jobs problem — hire lots of people to do deferred maintenance on our crumbling infrastructure — isn’t allowed to be discussed.