Home > Economy, Business & Finance > The Federal Reserve: Says it will do all it can?

The Federal Reserve: Says it will do all it can?


I am not sure what else the Federal Reserve can do to artificially prop up the economy. The days of massive Quantitative Easing and Keynesian Economic Policies have proved fruitless in the 21st century economy. Any benefits from their actions are short lived. ( Think Cash for Clunkers, First time Home Buyer Tax credit, QE1 and bailing out foreign nations via US Investment Banks and AIG).

Bloomberg put out a piece August 28th on the subject of the Fed, which is ready, able and willing to inject another round of liquidity to prop up the PonziEconomy and ZombieEconomy, via QE2 (Quantitative Easing 2)  In short, they are prepared to print more money, and devalue our dollar much to the detriment of future generations.

On Monday August 30th, Princeton Proffesor Paul Krugman argues that we need another stimulus push. He goes on to say:

“Everything is pointing to the need for more spending,” Krugman said. “The economy remains depressed.”

How much more debt can our nation take on its balance sheet? If one includes the liabilities of Fannie Mae and Freddie Mac and unfunded Social Security Liabilities,  this country is running close to 130% of Gross Domestic Product or GDP! We are 11Trillion + in debt to countries like China and the regions in the Middle East.

In my opinion, this is unsustainable. The debt this country has is killing present opportunity and sacrificing our future. We are destroying our children’s future just to keep the current  false game alive; Its  an end game and end state, where no one wins and everyone loses.

21st century economics is about being better corporate citizens, about creating sustainable value for our future.

So what can we do to reverse this course?

For starters we should getting back to the basics themes  and create real sustainable value in our own . To paraphrase Carl Fox, in the 1986 movie Wall Street; stop living off the buying and selling of others, create.

Bringing back our domestic manufacturing sector to an equilibrium point with the domestic service sector is a start (today, our economy is over 70% a service economy). Government spending is not going to be the driver of this. Private sector expansion is what is needed. The private sector needs a more globally competitive tax policy and more favorable trade agreements.

Here is the link to the Bloomberg Article.

Don Sedy

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