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This is your opinion. The Fed never "explicitly" said QE was for "tricke-down". You are equating the "wealth-effect" with "trickle down" - they are not the sa
by q1w2 5y ago
This is your opinion. The Fed never "explicitly" said QE was for "tricke-down".
You are equating the "wealth-effect" with "trickle down" - they are not the same.
The Fed described the wealth effect of stable home prices because people, at the time, were re-financing their homes and taking home-equity loans, which created spending.
Another "wealth-effect" are the stimulus checks. Are you suggesting those too are "trickle down".
The reality is that having more money stimulates spending. Trickle down specifically means only giving the RICH more money (traditionally in the form of tax breaks).
You comment completely conflates these two different notions.
- esja 5y agoPhilosophically it’s the exact same thing. It is a mathematical certainty that deliberately raising asset prices gives much more money to the rich than to the general public (many of whom get nothing or indeed go backwards by taking on massive debt to keep up). It’s no different to a massive tax break or any other way of giving wealthy people loads of money in the hope that some of it “trickles down”. And it fails to boost the real economy for the same reason - Bezos can only get so many haircuts, read so many books, eat so many meals.