Posted on 01/10/2014 5:42:52 AM PST by John W
Job creation stumbled in December, with the U.S. economy adding just 74,000 positions even as the Federal Reserve voted to take the first steps in eliminating its stimulus program.
The unemployment rate dropped to 6.7 percent, below economist estimates and due primarily to continued shrinkage in the labor force. The labor force participation rate tumbled to 62.8 percent, its worst level since January 1978.
(Excerpt) Read more at cnbc.com ...
You do realize there is a huge difference between the “FED” (monetary) and “GOV” (fiscal) policies right?
On the “FED” issue, increasing the money supply (QE is the mechanism) is not, in and of itself, inflationary.
I won’t disagree on the “GOV” fiscal side.
It will be an issue if the Debt to GDP % doesn’t start coming down faster. The way to do that is to grow GDP. The answer to all of our issues is that we need more robust growth.
I believe every agency of the Federal Govt is issuing bogus numbers in support of this evil President and his party.
Even the bad numbers are lies
What? No trickle down? Too much debt, too much Gov’t.
Should conservatives ever take control again big gov will unwind the fudging by increasing the unemployment rate as the number of net hires grows to 400,000/month.
Obamacare, another entitlement program, will add to the costs. And with 10,000 baby boomers retiring daily for the next 20 years, doubling the population of those over 65 by 2030 when one in five will be over 65, there is no way we grow ourselves out of this problem.
Does the Fed really have a ‘hidden agenda’ to hide the cost of US debt?
The Drudge Report links to a CNBC.com piece entitled “The Fed’s ‘hidden agenda’ behind money-printing.” The article’s claim: Although the Fed justifies its bond buying program — also known as quantitative easing — as a way to boost economic growth, there’s more to the story. The Fed’s “hidden agenda,” apparently, is the suppression of interest rates so Uncle Sam can more easily finance and afford its growing national debt:
I believe that one of the most important reasons the Fed is determined to keep interest rates low is one that is rarely talked about, and which comprises a dark economic foreboding that should frighten us all. … Thanks to the Fed, the interest rate paid on our national debt is at an historic low of 2.4 percent, according to the Congressional Budget Office. Given the U.S.’s huge accumulated deficit, this low interest rate is important to keep debt servicing costs down.
The piece goes to explore a scenario where US interest rates return to their 20 year average of 5.7%. If the federal government were to pay an average interest rate of 5.7% on its debt versus the 2.4% we pay today, debt service cost in 2020 would be about $930 billion. Here is the kicker: 85% of all personal income taxes collected would go to servicing the debt. And who knows, maybe rates will go even higher “as a result of the massive QE exercise of printing money at an unprecedented rate. We just don’t know what the effect of all this will be but many economists warn that it can only result in inflation down the road.”
The numbers, like the homo %age of the pop, the inflation rate, are to influence the stupid. Period. You can not trust anything this bunch says about anything. Period.
Personally, I am looking for my Jimma Carter sweater and turning down my thermostat so I can save the country from Al Gore. I have bought a new cookbook ‘101 Ways to Cook Beans’ and I figure it will come in handy very soon. Face facts folks, the Commies lie all the time. As the scorpion said to the rabbit, ‘Its just my nature.’
pretty remarkable 70% of new hires are part time.
pretty sure 99% of those are less than 30 hours a week
(for reasons all mysterious to the MSM)
Like Mark Udall leaning on gubmint bureacrats to ‘adjust’ their number of people thrown off their insurance from 250k to 200k.
With all your IRS and healthcare info, who knows what they’re capable of to insure compliance to their ‘suggestions’.
I hear the Soylent Green factory is hiring...
It looks like a stock chart with a massive head and shoulders top.
Boomers retiring plus the young folk working under the table probably explains it and it probably has a lot further to go.
- Official 1978 Jimmy Carter sweaters now on sale….
In and of itself “printing” money is not inflationary. It can be if it is out of balance with monetary demand. Looking at monetary velocity as a proxy for demand there is still tremendous demand for money. Without providing that supply we would be in a massive deflationary cycle.
Yet it is the QE that is causing much of the trouble. If we had an improved tax and regulatory environment (i.e. pro-growth policies) then QE would not be so bad.
Instead, QE is like piling fuel on the fire. You know all that debt will be paid back in taxes, inflation or both. A wrong policy from the start isn’t going to make things better, at least not for main street.
QE is simply the mechanism for supplying liquidity demanded by the market (look at the velocity charts). The Fed is purchasing debt for sale in the market. They are not buying debt that wasn’t being issued anyway.
I would say that if, as you mention, the tax and regulatory environment were better, we wouldn’t need the QE to this extent. The QE has helped to partially offset the damage the tax and regulatory environment.
I agree with your summary. I think we are in a very modest recovery...fueled in large part by printed money, and tempered by a government that is crushing the potential for a robust recovery...both with current decisions (past 5 years) and decades of overspending and future spending commitments we can not afford.
OK...I’m stealing that for my Facebook page
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