4 ms·

That’s the problem, in bad times you pour money into the market either directly or with interest rates. Then I’m good times the opposite is supposed to happen.

That’s the problem, in bad times you pour money into the market either directly or with interest rates. Then I’m good times the opposite is supposed to happen. But this time the good times never arrived and now we are trying to fix it in the middle of a war, pandemic and massive supply shock, including for energy. It’s too easy to get it wrong and make the problem bigger.

refurb 4y ago
The situation we're in now is pretty close to what some people were warning about back in 2008 when the feds decided on their massive monetary expansion. By the time inflation starts to heat up (it doesn't happen right away), there will be immense pressure to delay any monetary contraction for fear of dampening economic growth. Then Covid hit and the economy was goosed with another massive injection while everyone worried about a recession. Then once inflation starts it's too damn late to put the genie back in the bottle so you just spend the next 5-10 years trying to get it under control while not entirely tanking the economy.
landemva 4y ago
>>> the good times never arrived First two years of Trump were economically pretty good. Low unemployment - particularly for minorities. The Fed was raising rates!
- kmonsen 4y ago
  Mostly we spent it on tax cuts for the rich instead. You don't cut taxes in good times, that more than offset the minor rate hikes.
  - landemva 4y ago
    Spent what? I don't see economic growth as a reason to expand government spending, though many disagree. The economy was good, unemployment was low, rates were rising. USA was still spending it's treasure protecting Afghanistan poppy fields.
    - kmonsen 4y ago
      Right, so the theory is that in good times you put on the brakes so there is something in the tank you can spend during bad times. Spending can take many forms, but the traditional ones are lower interest rates and tax cuts. The issue is that we lowered taxes significantly in the middle of good times. It's like feeding ice cream to kids already on a sugar high. There is no room to lower taxes anymore as we are already running a significant deficit, and there is a recession coming where we are going to need to juice the economy.
      - landemva 4y ago
        Biden raised taxes. Decades of deficit spending demonstrate the feds can print adequate amounts of fiat currency, and issue debt, to continue to bail out the banksters, bail out foreign cruise line owners, and attempt to police the world and police outer space. USA could drop the federal personal income tax and continue on with the charade.
        kmonsen 4y ago
        Can you be specific here? Which taxes has Biden raised (not proposed to raise)?
      - galaxyLogic 4y ago
        Tax-cuts to the rich meant they had more money to invest in stock-market. And the tax-cuts to the corporations meant they made more profits which made them a more attractive target for stock-investors. Both effects meant the stock-market went higher and higher. And so here we are stock market doesn't seem to be going up because there are no new tax-cuts to the rich. There is inflation which is bad for the poor people. But people have work and are getting paid. That increases demand which causes inflation. Would it be better if people did not have money to buy anything, which would cause prices to go down? If supply-side could flex then inflation would not happen, but it can not because of pandemic which is still closing up China and Russia whose oil is out of the market for many would be buyers, and Ukraine whose wheat is not reaching world markets. Trying to blame Biden and Fed for the inflation is Monday-morning-quarter-backing. For anybody who blames them I would like to say: Are you seriously asking us to believe that if you had been elected president of USA, or of Fed, things would be so much better now?
icelancer 4y ago
>> Then I’m good times the opposite is supposed to happen. But this time the good times never arrived and now we are trying to fix it in the middle of a war, pandemic and massive supply shock, including for energy. It’s too easy to get it wrong and make the problem bigger. Good times happened recently, and they've happened in the past. But no POTUS ever wants rates to go up and money to be tightened under their watch, no matter what the situation is. We're doomed to a bust/boom cycle, because it's all we can tolerate. We can't tolerate minor pain or minor corrections if they're preventative. We can only tolerate unavoidable catastrophe.

refurb 4y ago

The situation we're in now is pretty close to what some people were warning about back in 2008 when the feds decided on their massive monetary expansion. By the time inflation starts to heat up (it doesn't happen right away), there will be immense pressure to delay any monetary contraction for fear of dampening economic growth. Then Covid hit and the economy was goosed with another massive injection while everyone worried about a recession. Then once inflation starts it's too damn late to put the genie back in the bottle so you just spend the next 5-10 years trying to get it under control while not entirely tanking the economy.

landemva 4y ago

>>> the good times never arrived First two years of Trump were economically pretty good. Low unemployment - particularly for minorities. The Fed was raising rates!

kmonsen 4y ago
Mostly we spent it on tax cuts for the rich instead. You don't cut taxes in good times, that more than offset the minor rate hikes.
- landemva 4y ago
  Spent what? I don't see economic growth as a reason to expand government spending, though many disagree. The economy was good, unemployment was low, rates were rising. USA was still spending it's treasure protecting Afghanistan poppy fields.
  - kmonsen 4y ago
    Right, so the theory is that in good times you put on the brakes so there is something in the tank you can spend during bad times. Spending can take many forms, but the traditional ones are lower interest rates and tax cuts. The issue is that we lowered taxes significantly in the middle of good times. It's like feeding ice cream to kids already on a sugar high. There is no room to lower taxes anymore as we are already running a significant deficit, and there is a recession coming where we are going to need to juice the economy.
    - landemva 4y ago
      Biden raised taxes. Decades of deficit spending demonstrate the feds can print adequate amounts of fiat currency, and issue debt, to continue to bail out the banksters, bail out foreign cruise line owners, and attempt to police the world and police outer space. USA could drop the federal personal income tax and continue on with the charade.
      - kmonsen 4y ago
        Can you be specific here? Which taxes has Biden raised (not proposed to raise)?
    - galaxyLogic 4y ago
      Tax-cuts to the rich meant they had more money to invest in stock-market. And the tax-cuts to the corporations meant they made more profits which made them a more attractive target for stock-investors. Both effects meant the stock-market went higher and higher. And so here we are stock market doesn't seem to be going up because there are no new tax-cuts to the rich. There is inflation which is bad for the poor people. But people have work and are getting paid. That increases demand which causes inflation. Would it be better if people did not have money to buy anything, which would cause prices to go down? If supply-side could flex then inflation would not happen, but it can not because of pandemic which is still closing up China and Russia whose oil is out of the market for many would be buyers, and Ukraine whose wheat is not reaching world markets. Trying to blame Biden and Fed for the inflation is Monday-morning-quarter-backing. For anybody who blames them I would like to say: Are you seriously asking us to believe that if you had been elected president of USA, or of Fed, things would be so much better now?

icelancer 4y ago

>> Then I’m good times the opposite is supposed to happen. But this time the good times never arrived and now we are trying to fix it in the middle of a war, pandemic and massive supply shock, including for energy. It’s too easy to get it wrong and make the problem bigger. Good times happened recently, and they've happened in the past. But no POTUS ever wants rates to go up and money to be tightened under their watch, no matter what the situation is. We're doomed to a bust/boom cycle, because it's all we can tolerate. We can't tolerate minor pain or minor corrections if they're preventative. We can only tolerate unavoidable catastrophe.