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My populist side has a nagging question: If we're going to print money to buy $40B per month in mortgage bonds, which is not guaranteed to actually help the weak job market, then why not just spend $40B per month on repairing and constructing major infrastructure that the country needs and wants?
Think of what could be accomplished with nearly $500B invested in our national infrastructure over the next year?
Our priorities are severely screwed up when the FED can autonomously spend $40B per month on mortgage bonds, but yet we can't create jobs through infrastructure improvements because of election year politics and other partisan swiping.
Because infrastructure doesnt get money where it belongs, which is in the banks. We have a capital crisis in america, banks arent loaning, and because of it, the economy is in the tube.
$40B a month in infrastructure would do crap to the economy just like it did nothing last time. All it would do is move when projects are completed, and thus change when money gets spent, not increase it.
HappyTexan....Tofurky.....Pghquest.....I get your point. And I agree that there is some value to shoring up the mortgage loan business. But is there any evidence that QE1 and QE2 was wildly successful? Maybe it was.....I don't know. But I see infrastructure investment not necessarily just an economic argument, but more of a national cause of concern issue. The side benefit is the number of jobs that could/would be created if $500B were dumped into projects all across the nation over the next year.
How can we go wrong with added spending on infrastructure? Will we ever see the benefit of FED action in the mortgage bond market?
HappyTexan....Tofurky.....Pghquest.....I get your point. And I agree that there is some value to shoring up the mortgage loan business. But is there any evidence that QE1 and QE2 was wildly successful? Maybe it was.....I don't know. But I see infrastructure investment not necessarily as an economic argument, but more of a national cause of concern issue. The side benefit is the number of jobs that could/would be created if $500B were dumped into projects all across the nation over the next year.
Was it successful? That depends on what side of the equation you're sitting on. If you're the bankers, yes, it was widly successful. They got to borrow money, then loan it to the government, and then collect interest on the spread..
If your the public, no, it cost all of us money due to a declining dollar, but they arent so concerned with us little people.
Quote:
Originally Posted by AeroGuyDC
How can we go wrong with added spending on infrastructure? Will we ever see the benefit of FED action in the mortgage bond market?
Because it doesnt boost the economy no more than breaking a window and then fixing it, improves the value of the home.
HappyTexan....Tofurky.....Pghquest.....I get your point. And I agree that there is some value to shoring up the mortgage loan business. But is there any evidence that QE1 and QE2 was wildly successful? Maybe it was.....I don't know. But I see infrastructure investment not necessarily an economic argument, but more of a national cause of concern issue. The side benefit is the number of jobs that could/would be created if $500B were dumped into projects all across the nation over the next year.
Bernanke is the Fed. The Fed determines monetary policy..they do not RUN the government or manage our programs. Not yet anyway.
My populist side has a nagging question: If we're going to print money to buy $40B per month in mortgage bonds, which is not guaranteed to actually help the weak job market, then why not just spend $40B per month on repairing and constructing major infrastructure that the country needs and wants?
Think of what could be accomplished with nearly $500B invested in our national infrastructure over the next year?
Our priorities are severely screwed up when the FED can autonomously spend $40B per month on mortgage bonds, but yet we can't create jobs through infrastructure improvements because of election year politics and other partisan swiping.
This saddens and infuriates me.
Aside from capitalizing "Fed" you are absolutely correct.
Although housing is a serious problem, the issue all along in this recession is a crisis of insufficient aggregate demand. Companies have started hiring workers, but they won't hire more workers until the companies have customers to buy their stuff. (Henry Ford was right when he realized that paying his workers enough to afford the cars they were making would be good for the company.)
Hiring workers to build infrastructure would put money in their pockets and enable them to buy stuff, which would stimulate the companies into hiring more workers.
The problem is that the Republicans have the ability to block anything the President proposes, and they are determined to block anything that will help improve the economy because it will help the election chances of the President and the Democratic Party. Consequently, this action by the Fed is pretty much the only avenue open to the government.
Because the FED being "concerned about jobs" is BS, this is just a way to bail out the banks (the FED) and you get to pay for it, Enjoy!!!
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