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Well isn't the issue here that The Fed enables the reckless behavior of congress by sterilizing the deficits? Yes the root cause is the politicians spending to

by ardme 5y ago

Well isn't the issue here that The Fed enables the reckless behavior of congress by sterilizing the deficits? Yes the root cause is the politicians spending tons of money to get re-elected and running up deficits but they shouldn't be able to get away with it and keep kicking the can down the road. To your last point - of course it's obvious that interest rates are suppressed and if they were allowed to rise it would cause a depression. But if they were not there would be less mal-investment and the zombie companies propped up by debt would soon collapse. It's not that this wouldn't cause pain in the short term but that you can't just eliminate reality and it's going to happen sooner or later. The longer you delay the worse the ultimate recession might be.

Aunche 5y ago
> Well isn't the issue here that The Fed enables the reckless behavior of congress by sterilizing the deficits? Well doctors enable unhealthy people to live unhealthy lifestyles, but nobody blames them for that. They can't just say, "I won't give you blood thinners until you go on a diet." Yes, politicians ought to face consequences, but that is not up to the Fed. It is up to the voters to demand better candidates rather than point their fingers at the Fed. > It's not that this wouldn't cause pain in the short term but that you can't just eliminate reality and it's going to happen sooner or later. It worked out during the Great Depression because all of our rival powers were completely destroyed by WWII. We won't be so lucky this time. China is poised to overtake the US as the top superpower if our economy collapses. In a couple decades, this might not be the case, as they will be facing severe demographic problems.
- ardme 5y ago
  > It worked out during the Great Depression because all of our rival powers were completely destroyed by WWII. We won't be so lucky this time. China is poised to overtake the US as the top superpower if our economy collapses. In a couple decades, this might not be the case, as they will be facing severe demographic problems. Pretty much, yep

by ardme 5y ago

Aunche 5y ago

> Well isn't the issue here that The Fed enables the reckless behavior of congress by sterilizing the deficits? Well doctors enable unhealthy people to live unhealthy lifestyles, but nobody blames them for that. They can't just say, "I won't give you blood thinners until you go on a diet." Yes, politicians ought to face consequences, but that is not up to the Fed. It is up to the voters to demand better candidates rather than point their fingers at the Fed. > It's not that this wouldn't cause pain in the short term but that you can't just eliminate reality and it's going to happen sooner or later. It worked out during the Great Depression because all of our rival powers were completely destroyed by WWII. We won't be so lucky this time. China is poised to overtake the US as the top superpower if our economy collapses. In a couple decades, this might not be the case, as they will be facing severe demographic problems.

ardme 5y ago
> It worked out during the Great Depression because all of our rival powers were completely destroyed by WWII. We won't be so lucky this time. China is poised to overtake the US as the top superpower if our economy collapses. In a couple decades, this might not be the case, as they will be facing severe demographic problems. Pretty much, yep