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(Business Insider)   Federal Reserve announces that because unemployment is so high and inflation is so low, they are going to start tapering their purchases in order to cool down the economy. Wait, what?   (businessinsider.com) divider line 146
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798 clicks; posted to Politics » on 18 Dec 2013 at 6:54 PM (31 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-12-18 02:06:41 PM
Goddammit. What the hell! You're below your own inflation target! Well below! Why the fark would you stop!
 
2013-12-18 02:11:01 PM
Because that $85B was doing such a bang up job of helping the economy already...
 
2013-12-18 02:16:54 PM
Don't worry, kids. If you missed out on this recovery, I'm sure we'll have another one in 10 years or so.
 
2013-12-18 02:18:23 PM

dj_bigbird: Because that $85B was doing such a bang up job of helping the economy already...


Better than the alternative.
 
2013-12-18 02:55:06 PM
i.imgur.com

Thanks, Ben and Janet! The slower the taper, the longer the party lasts!
 
2013-12-18 05:10:06 PM
The government cant keep QE at this pace forever.

/the only economics I really know is from college 20 years ago and listening to NPR marketplace with Kai Rysdal.
 
2013-12-18 05:10:51 PM

vernonFL: The government cant keep QE at this pace forever.

/the only economics I really know is from college 20 years ago and listening to NPR marketplace with Kai Rysdal.


No one said forever.
 
2013-12-18 05:51:51 PM

DamnYankees: dj_bigbird: Because that $85B was doing such a bang up job of helping the economy already...

Better than the alternative.


==

FTFA: Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month.

Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.
 
2013-12-18 06:45:09 PM
It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."
 
2013-12-18 06:57:47 PM

Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.


Yeah, if they scale back $5 bn every 3 months or so, that seems like it would be a valid means of decreasing QE without shocking the market.
 
2013-12-18 06:59:52 PM
But it's all a-ok, because the market shot up on the news, amiright??

img.fark.net
 
2013-12-18 07:00:38 PM

Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.


The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.
 
2013-12-18 07:02:23 PM

Delay: It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."


To be fair, it really isn't just about the blah Demoncrap in the WH. A lot of them actually believe that the second lowest taxes since Eisenhower are still too high and all we need to do is cut even more taxes on the rich and balance the budget and the good times will roll.
 
2013-12-18 07:12:48 PM

DamnYankees: Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.

The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.


You'll get austerity and like it!
 
2013-12-18 07:15:46 PM

DamnYankees: Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.

The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.


The policies we SHOULD be pursuing are massive upgrades and maintenance for our national transportation and energy infrastructures.  But the teabaggers won't have that for a moment, so we're stuck with QE which doesn't help nearly as much.
 
2013-12-18 07:19:49 PM
Unemployment numbers also go down when people decide to move under the bridge or die early from unemployment related issues.    It shows that members of the fed are blinded by ideology.
 
2013-12-18 07:31:55 PM
How about we encourage businesses to hire Americans with tax incentives for doing so? Or raise the minimum wage, so that people only need to work one job to survive, rather than one person taking two or three jobs that someone else could be filling? Or penalize businesses who outsource?
 
2013-12-18 07:33:25 PM

DamnYankees: Goddammit. What the hell! You're below your own inflation target! Well below! Why the fark would you stop!


They want the banks to start actually lending some of that money they gave them.

Where did it all go, since it's still kinda hard to get a loan from what I am reading.
 
2013-12-18 08:00:11 PM

LordJiro: How about we encourage businesses to hire Americans with tax incentives for doing so? Or raise the minimum wage, so that people only need to work one job to survive, rather than one person taking two or three jobs that someone else could be filling? Or penalize businesses who outsource?


Those companies didn't give us our elected officials to destroy their business plans...
 
2013-12-18 08:00:18 PM
IMO, If the Fed was serious about helping real people, and not investors, it's post-recession strategy would have been much more aggressive, and focused much less on the markets and major investors.

The entirety of the QE program was tailored to bail out Wall St, repay the banks that farked up in the first place, and relaunch the markets.  The actual workers in this country?  They got a shiat sandwich.
 
2013-12-18 08:24:00 PM

johnnieconnie: But it's all a-ok, because the market shot up on the news, amiright??

[img.fark.net image 300x195]


The irony in all of this is that the past few times the Fed toyed with this idea, the markets were starting to panic. Now that something has actually been done, the markets are happy because it means the economy is doing better (it really is as most economic metrics are heading in a positive direction).

This just shows how clueless people in Wall Street are about economics and are nothing but BS artists.
 
2013-12-18 08:24:47 PM
The jobs problem has nothing to do with the Fed and stimulus.

Hiring a million more low-wage employees in service jobs isn't a solution. The nation needs good jobs for the half of the nation that has a double-digit IQ. Manufacturing is the answer to this, It hires people from all segments of the population and encourages long term planning (mortgages, families). We happily shipped the jobs elsewhere so that management and shareholders can keep a bigger slice of the pie.
 
2013-12-18 08:28:09 PM
Someone please explain to me how printing money will fix unemployment or wealth inequality. I think we would all agree that the current state of affairs results in money going to massive corporations and wall street. Why would printing money change the current state of affairs? The money would still pool in the massive corporations and on wall Street, right?

Like let's print tons of money and give it to the poor. How many tvs, how many ipads, how many big macs, how many F150s, etc would they have to buy before they get a job?

Printing money doesn't give people marketable skills. It doesn't make American workers cheaper than their foreign counterparts. It doesn't make American workers cheaper than automation.

How does it fix anything?
 
2013-12-18 08:29:16 PM

madgonad: The jobs problem has nothing to do with the Fed and stimulus.

Hiring a million more low-wage employees in service jobs isn't a solution. The nation needs good jobs for the half of the nation that has a double-digit IQ. Manufacturing is the answer to this, It hires people from all segments of the population and encourages long term planning (mortgages, families). We happily shipped the jobs elsewhere so that management and shareholders can keep a bigger slice of the pie.


Unfortunately they're not coming back, so we gonna have to come up with another solution. Basic income in my opinion.
 
2013-12-18 08:52:32 PM

DamnYankees: Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.

The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.


Because unemployment is still going down, and you want to taper QE, not quit it full stop.
 
2013-12-18 08:54:18 PM

Grand_Moff_Joseph: IMO, If the Fed was serious about helping real people, and not investors, it's post-recession strategy would have been much more aggressive, and focused much less on the markets and major investors.

The entirety of the QE program was tailored to bail out Wall St, repay the banks that farked up in the first place, and relaunch the markets.  The actual workers in this country?  They got a shiat sandwich.


QE buys bonds from the Treasury, and MBS from the FHFA.
 
2013-12-18 09:05:51 PM

HMS_Blinkin: DamnYankees: Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.

The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.

The policies we SHOULD be pursuing are massive upgrades and maintenance for our national transportation and energy infrastructures.  But the teabaggers won't have that for a moment, so we're stuck with QE which doesn't help nearly as much.


This. The Fed is being as generous as it possibly can be. The Fed can't fix the fiscal side; the only thing they can do is try to compensate for fiscal policy by means of accomodative monetary policy. The FOMC said as much this afternoon, and the only change in that section versus the last statement was that to add "although the extent of restraint may be diminishing" to the part about "[Ff]iscal policy is restraining economic growth."

The big change today was that in addition to the 6.5% unemployment and 2% long-term inflation goal, the added language at the end about how "...it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal" (emphasis added).
That's why the market spiked today: we have an accomodative policy, and although we're tapering off the QE crack pile as slowly as possible, you're going to have zero/near-zero interest rates going forward as far as we can see. In the event that the jobs come back or inflation shows up, yes, rates will rise, but as most people have already figured out, the jobs aren't coming back, and without that, there isn't going to be significant inflationary pressure on the wage side or the consumer demand side in the forseeable future. It's steady-as-she-goes, free money for the rest of 2014.

I'd like to see everyone everyone get paid, but I think we've all given up on that, present company included. It's still the everyone-that-counts everyone getting paid, yes, that sucks, no, that's not sustainable over generational timeframes, but it's the only thing the Fed can do in the face of a self-destructive fiscal policy.

There's money to be made by investing in companies that produce concrete, asphalt, trucks, and electric cars, just as there was money to be made in companies that produce tanks, drones, tasers, and microwave crowd control weapons. I'd prefer the former over the latter, but until those in charge of the fiscal side put principle over partisan gain, I'll settle for a diversified portfolio of manufacturers of junk food, proprietors of dollar stores, purveyors of cigarettes, and (of course) our fine selection of health insurers, banks, and credit card companies.
 
2013-12-18 09:07:59 PM

Mithiwithi: Delay: It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."

To be fair, it really isn't just about the blah Demoncrap in the WH. A lot of them actually believe that the second lowest taxes since Eisenhower are still too high and all we need to do is cut even more taxes on the rich and balance the budget and the good times will roll.


The rich are paying the highest taxes since 1979. What farking alternative universe do you guys live in where taxes on the rich have been decreasing?
 
2013-12-18 09:14:52 PM

MattStafford: It doesn't make American workers cheaper than their foreign counterparts.


It actually does. If you inflate the dollar, it reduces the purchasing power of the dollar, thereby making it cheaper to employ Americans.
 
2013-12-18 09:16:42 PM

Debeo Summa Credo: Mithiwithi: Delay: It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."

To be fair, it really isn't just about the blah Demoncrap in the WH. A lot of them actually believe that the second lowest taxes since Eisenhower are still too high and all we need to do is cut even more taxes on the rich and balance the budget and the good times will roll.

The rich are paying the highest taxes since 1979. What farking alternative universe do you guys live in where taxes on the rich have been decreasing?


upload.wikimedia.org
Did we have a tax hike that I missed?
 
2013-12-18 09:18:17 PM

Debeo Summa Credo: The rich are paying the highest taxes since 1979.


Effective rate? Citation farking needed.
 
2013-12-18 09:18:53 PM

HMS_Blinkin: DamnYankees: Somacandra: Honestly now, this really doesn't seem to be that much of a shift. If TFA is to be believed, further change is contingent on decreasing unemployment. Looks like a toe dip rather than a cannonball.

The scale isn't the issue to me. It's the direction. Why would you decrease it all? We have high unemployment and low inflation. It's the textbook time for expansionary policy.

The policies we SHOULD be pursuing are massive upgrades and maintenance for our national transportation and energy infrastructures.  But the teabaggers won't have that for a moment, so we're stuck with QE which doesn't help nearly as much.


If we did embark on such a huge spending program we would need even more QE to sop up all the debt that we'd need to issue to fund the spending (or sell them to investors at much higher rates than were paying now).
 
2013-12-18 09:20:26 PM

Debeo Summa Credo: Mithiwithi: Delay: It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."

To be fair, it really isn't just about the blah Demoncrap in the WH. A lot of them actually believe that the second lowest taxes since Eisenhower are still too high and all we need to do is cut even more taxes on the rich and balance the budget and the good times will roll.

The rich are paying the highest taxes since 1979. What farking alternative universe do you guys live in where taxes on the rich have been decreasing?


Or the lowest since the 50's.

http://www.politifact.com/truth-o-meter/statements/2011/jun/29/barack - obama/barack-obama-says-tax-rates-are-lowest-1950s-ceos-/
 
2013-12-18 09:20:53 PM

cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.


http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-co de-may-be-most-progressive-since-1979.html
 
2013-12-18 09:22:56 PM

johnnieconnie: But it's all a-ok, because the market shot up on the news, amiright??


Nod, another record-setting day on Wall Street.

/where they used to trade slaves
 
2013-12-18 09:23:52 PM

GameSprocket: Debeo Summa Credo: Mithiwithi: Delay: It's only a reduction of $10 billion from the previous $85 billion monthly stimulus. It is still an enormous stimulus. Why? Because Congress won't act because Republicans hate the blah guy in the White House.

It's time for them to bring up Benghazi, Death Panels and Runaway Inflation on Fox News. "It's them not us, the GOP says."

To be fair, it really isn't just about the blah Demoncrap in the WH. A lot of them actually believe that the second lowest taxes since Eisenhower are still too high and all we need to do is cut even more taxes on the rich and balance the budget and the good times will roll.

The rich are paying the highest taxes since 1979. What farking alternative universe do you guys live in where taxes on the rich have been decreasing?


Did we have a tax hike that I missed?


Yeah. Go back to sleep for another four years.
 
2013-12-18 09:27:09 PM

Debeo Summa Credo: The rich are paying the highest taxes since 1979.


70% of corporations are paying NO TAXES.
 
2013-12-18 09:27:47 PM

Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html


Do you really believe those folks pay anywhere close to 36%?
 
2013-12-18 09:30:45 PM

Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html


Note the word "may"
 
2013-12-18 09:31:03 PM

phillydrifter: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

70% of corporations are paying NO TAXES.


Comical. Where do you guys get this shiat?

Average effective total income tax rate of the S&P 500 from 2007 to 2012 was 29.1%.

http://www.nytimes.com/interactive/2013/05/25/sunday-review/corporate - taxes.html
 
2013-12-18 09:31:26 PM

Debeo Summa Credo: http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html


"By some measures, the tax code might now be the most progressive in a generation, tax economists said, while noting that every American is paying a lower burden currently than they did then. In fact, the total federal tax rate is still vastly lower for the very rich than it was at any point in the 1940s through 1970s. It has risen from historical lows, but is still closer to those lows than where it was in the postwar decades. "

Here's the thing about commas, Debeo. They don't mean the end of the sentence, and they especially don't mean the end of the article.

Pick between being terminally stupid or a lying douchbag, but those are pretty much the only options open to you.
 
2013-12-18 09:32:02 PM

Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html


Also you might want to read more of that article. Their total federal tax rate is still vastly lower than any point in the 1940's through the 70's. Ofsetting this is the rich have gotten a heck of a lot richer.
 
2013-12-18 09:32:29 PM

Fart_Machine: Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Do you really believe those folks pay anywhere close to 36%?


The Tax Policy Center and New York Times does.
 
2013-12-18 09:34:16 PM

Debeo Summa Credo: Fart_Machine: Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Do you really believe those folks pay anywhere close to 36%?

The Tax Policy Center and New York Times does.


No they don't. Nowhere do they even mention that the effective rate is 36%.
 
2013-12-18 09:34:50 PM

Fart_Machine: Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Also you might want to read more of that article. Their total federal tax rate is still vastly lower than any point in the 1940's through the 70's. Ofsetting this is the rich have gotten a heck of a lot richer.


Move them goalposts, farklibs!
 
2013-12-18 09:35:50 PM

Debeo Summa Credo: The rich are paying the highest taxes since 1979. What farking alternative universe do you guys live in where taxes on the rich have been decreasing?


The fark they have.
 
2013-12-18 09:39:16 PM

Debeo Summa Credo: http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Also you might want to read more of that article. Their total federal tax rate is still vastly lower than any point in the 1940's through the 70's. Ofsetting this is the rich have gotten a heck of a lot richer.

Move them goalposts, farklibs!


Even "most progressive" tax code since '79 doesn't mean they're paying more, when taxes across the board are down.

They're not.

FACT.

img.fark.net
 
2013-12-18 09:42:39 PM
Maybe the Federal Reserve should stop PAYING banks to suck money out of the economy by depositing their excess reserve dollars back at the Federal Reserve.

When cash is deposited back at the Fed, it's not circulating in the economy.  The Fed is the bankers' bank, and since the Fed does no business with the public, any money deposited with them simply vanishes.  It's a black hole.

research.stlouisfed.org

When do you think the Fed started paying interest on excess reserve deposits? 

That's $2.4 TRILLION that's NOT circulating in the economy.
 
2013-12-18 09:42:46 PM

cameroncrazy1984: Debeo Summa Credo: Fart_Machine: Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Do you really believe those folks pay anywhere close to 36%?

The Tax Policy Center and New York Times does.

No they don't. Nowhere do they even mention that the effective rate is 36%.


Another article from huffpo:

http://m.huffpost.com/us/entry/280120 6/

"For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center, a research organization based in Washington. The top 1 percent of households, those with incomes averaging $1.4 million, will pay an average of 35.5 percent."

And regardless how skeptical you are about the definition of the rate, the fact remains that the rate is th highest since 1979. The point is taxes have gone up for the rich, contrary to the delusional rantings of farklibs who whine that we've been giving tax cuts to the rich.
 
2013-12-18 09:43:04 PM

Debeo Summa Credo: Fart_Machine: Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: The rich are paying the highest taxes since 1979.

Effective rate? Citation farking needed.

http://mobile.nytimes.com/2013/01/05/business/after-fiscal-deal-tax-c o de-may-be-most-progressive-since-1979.html

Also you might want to read more of that article. Their total federal tax rate is still vastly lower than any point in the 1940's through the 70's. Ofsetting this is the rich have gotten a heck of a lot richer.

Move them goalposts, farklibs!


And Mitt Romney admitted he paid the full tax rate during the election, right?

Right?

right??
 
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