And that should be a signal that this administration does not expect unemployment to fall below 6.5% until after the 2014 elections.
THE PHILLIPS CURVE IS DEAD!!!!
BEN “I NEED MORE COWBELL” BERNANKE IS A FAILURE!!!
In economics, the Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. Stated simply, lower unemployment in an economy is correlated with a higher rate of inflation.
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In the 1970s, many countries experienced high levels of both inflation and unemployment also known as stagflation. Theories based on the Phillips curve suggested that this could not happen, and the curve came under a concerted attack from a group of economists headed by Milton Friedman. Friedman argued that the Phillips curve relationship was only a short-run phenomenon.
http://en.wikipedia.org/wiki/Phillips_curve
And the stock market that should have loved it’s lifeline being extended ad infinitum didn’t apparently go nuts over the news. Reality bites.
And increased government borrowing, along with huge government budget deficits, and higher taxes are an assault on saving, investment, and capital accumulation, which will aggravate the restraining of economic growth. The inflation caused by the increase in the money supply is there, and is showing up in the fact that prices have not dropped like they should have during a severe recession.