Stimulus by Fed Is Disappointing, Economists Say

Discussion in 'Economy' started by Trajan, Apr 24, 2011.

  1. Trajan
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    Trajan conscientia mille testes

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    well since QE 2 is supposed to die in June, I this might well be its epitaph.
    Its affects however will live beyond the end of the prgm.


    Stimulus by Fed Is Disappointing, Economists Say
    By BINYAMIN APPELBAUM
    Published: April 24, 2011

    WASHINGTON — The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.

    But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs.

    As the Fed’s policy-making board prepares to meet Tuesday and Wednesday — after which the Fed chairman, Ben S. Bernanke, will hold a news conference for the first time to explain its decisions to the public — a broad range of economists say that the disappointing results show the limits of the central bank’s ability to lift the nation from its economic malaise.

    “It’s good for stopping the fall, but for actually turning things around and driving the recovery, I just don’t think monetary policy has that power,” said Mark Thoma, a professor of economics at the University of Oregon, referring specifically to the bond-buying program.

    Mr. Bernanke and his supporters say that the purchases have improved economic conditions, all but erasing fears of deflation, a pattern of falling prices that can delay purchases and stall growth. Inflation, which is beneficial in moderation, has climbed closer to healthy levels since the Fed started buying bonds.

    “These actions had the expected effects on markets and are thereby providing significant support to job creation and the economy,” Mr. Bernanke said in a February speech, an argument he has repeated frequently.

    But growth remains slow, jobs remain scarce, and with the debt purchases scheduled to end in June, the Fed must now decide what comes next.

    more at-
    http://www.nytimes.com/2011/04/24/business/economy/24fed.html?_r=1&partner=rss&emc=rss
     
  2. Toro
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    Toro Diamond Member

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    It's been good for silver!
     
  3. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Great. People fleeing from the dollar into commodities which are no longer the basis of the currency is Really GREAT for the economy.
     
  4. Avorysuds
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    Avorysuds Gold Member

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  5. Truthmatters
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    Truthmatters BANNED

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    http://www.nytimes.com/2010/07/28/business/economy/28bailout.html?_r=1


    In Study, 2 Economists Say Intervention Helped Avert a 2nd DepressionBy SEWELL CHAN
    Published: July 27, 2010

    .WASHINGTON — Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government’s sweeping interventions to prop up the economy since 2008 helped avert a second Depression.

    Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved.
     
    Last edited: Apr 24, 2011
  6. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Post #5 violated My Policy of Nonclickage on posts that contain only links with No Commentary.
     
  7. percysunshine
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    percysunshine Gold Member

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    We need to subsidize message boards. Every poster gets $1 per post from the government. That'll get the economy going. The Message Board Stimulus Act of 2011.
     
  8. Avorysuds
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    Avorysuds Gold Member

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    lol!
     
  9. Truthmatters
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    The stimulus worked and it can be quantified
     
  10. Truthmatters
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    The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody’s Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years.

    “While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,” they write.

    you people deny anything that challenges your failed ideas.
     

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