Will Quantitive Easing 3 Help our Economic Crisis? I Say NO!.

[gwynedd1]

Originally Posted by Taratova

The dollar is losing value , that is why everything is going up. It isn't worth what is was. the more they print , the less value, and the products will go higher while wages go lower.

So if I print $10,000 pay someone at a factory to create a car that will sell for 20,000 then the dollar will lose value? That it?

You see what the problem is? The problem is monetarist policy is being followed until apparently the banks just get tired of having money in vaults and when they tire of currency speculation and ponzi schemes. The problem isn't printing money. The problem is the printing is happening where all it does if give buying power to people who not only make nothing, but drive up the costs of production. Most of the money is leaving the country. That should be pretty obvious given this bad economy. The money is not being spent here.

[Loveshiscountry]

Originally Posted by MTAtech

The Fed has a charge to control inflation and deflation but also one to aid employment.

We’re hashing over the same debates our grandfathers had in the 1930s.


I've been reading posts here from right-wingers for four years and reading in the WSJ for the same amount of time, how QE1, QE2, etc. is going to be disastrous because it will cause hyperinflation and "debase" the value of the dollar. Yet, in these last four years inflation has been mild and the dollar strong. In other words, the conservative view of monetary policy has been decidedly wrong.

To the annoyance of conservatives, Paul Krugman has been 100% correct:
And here:

Moreover, deflation is BAD, contrary to the silly video. Economist Irving Fisher pointed out long ago (pdf), debtors are likely to be forced to cut their spending when their debt burden rises, while creditors aren’t likely to increase their spending by the same amount. So deflation exerts a depressing effect on spending by raising debt burdens – which, as Fisher also points out, can lead to another kind of vicious circle, in which depressed spending because of rising real debt leads to further deflation.

Also, in a deflationary economy, wages as well as prices often have to fall – and it’s a fact of life that it’s very hard to cut nominal wages — there’s downward nominal wage rigidity. What this means is that in general economies don’t manage to have falling wages unless they also have mass unemployment, so that workers are desperate enough to accept those wage declines.

But you are now saying, MTAtech, prices are rising, so we don't have deflation. Yes, but economic problems get worse as inflation falls, and that too low an inflation rate may actually be economically damaging. That’s why the fact that inflation, while still positive, is below the Fed’s target is bad news; and it’s why respectable people like Olivier Blanchard (pdf) have suggested that a higher target, something like 4 percent inflation, might make sense.

Let us not forget that Romney's chief economic adviser, Harvard's Greg Mankiw said, in the Economic Report to President Bush, that:

"Aggressive monetary policy can reduce the depth of a recession."

And doing the same thing that kept us in a depression for a decade as well as the horrible economic conditions in the war which made it last over 15 years is the policy to follow? Keep going back to the poisonous well. Keep backing losers with bad policies and you'll get more of the same.
Government has never been able to run the economy well over the long run.That is a fact. They cause all the booms and busts and those busts are much worse than the booms. But yea good thinking on your part.

Too low an inflation rate is bad? LOL For who? The ones who don't save? If prices fall faster than wages the people win. How hard is that to figure out? Can't wait to hear the convoluted explanation that will go against basic economics. Like subpar product quality and hiring a sub par work force helps the economy. lol that was a good one on your part.

If Krugman is right why didn't he have policies in place to stop the economic crash that ruined the economy? I guess the manipulation of lowering interest rates below market which caused the mal investment couldn't have been foreseen? Real hard to figure that out when it was the same thing that caused the dot com bubble, the great depression and the current out of control costs of college.
You're relying on an economic manipulator who is a failure for your go to guy?