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This brings up an interesting point. Why are people ok with the government being able to essentially control the unemployment rate. We might see the rate go fro

This brings up an interesting point. Why are people ok with the government being able to essentially control the unemployment rate. We might see the rate go from 3.5 to 4 and wave our hands in the air, but within that .5 are actual people/families being made homeless and/or unemployed as government policy. Should the government be able to control the interest/inflation rate (and by extention the unemployment rate) when housing/food isn't guaranteed? Seems like 1/2 of the social contract is being messed with.

dividedcomet 3y ago
Because the government doesn’t? We’ve been raising interest rates for over a year without UE jumps, and the last two major spikes in UE weren’t caused by interest rates. Saying the government controls UE is like saying the government controls the tides.
- Racing0461 3y ago
  It's basic keyseian economics. > Higher levels of unemployment might motivate the Fed to lower rates and spur economic growth, while low levels of unemployment might motivate higher rates to curb inflation. https://www.investopedia.com/articles/investing/103015/how-labor-force-participation-rate-affects-us-unemployment.asp#:~:text=Higher%20levels%20of%20unemployment%20might%20motivate%20the%20Fed%20to%20lower%20rates%20and%20spur%20economic%20growth%2C%20while%20low%20levels%20of%20unemployment%20might%20motivate%20higher%20rates%20to%20curb%20inflation https://www.investopedia.com/articles/investing/103015/how-l....
SkyPuncher 3y ago
Because it’s necessary to avoid catastrophic outcomes. Politically, nobody wants to tank the economy on their watch. There’s absolutely no incentive for the government to maliciously raise rates. The intention is to avoid a situation where everything moves so fast that things spiral out of control. From my understanding, the only thing worse that a deflation is hyperinflation. People become completely unable to afford anything.

dividedcomet 3y ago

Because the government doesn’t? We’ve been raising interest rates for over a year without UE jumps, and the last two major spikes in UE weren’t caused by interest rates. Saying the government controls UE is like saying the government controls the tides.

Racing0461 3y ago
It's basic keyseian economics. > Higher levels of unemployment might motivate the Fed to lower rates and spur economic growth, while low levels of unemployment might motivate higher rates to curb inflation. https://www.investopedia.com/articles/investing/103015/how-labor-force-participation-rate-affects-us-unemployment.asp#:~:text=Higher%20levels%20of%20unemployment%20might%20motivate%20the%20Fed%20to%20lower%20rates%20and%20spur%20economic%20growth%2C%20while%20low%20levels%20of%20unemployment%20might%20motivate%20higher%20rates%20to%20curb%20inflation https://www.investopedia.com/articles/investing/103015/how-l....

SkyPuncher 3y ago

Because it’s necessary to avoid catastrophic outcomes. Politically, nobody wants to tank the economy on their watch. There’s absolutely no incentive for the government to maliciously raise rates. The intention is to avoid a situation where everything moves so fast that things spiral out of control. From my understanding, the only thing worse that a deflation is hyperinflation. People become completely unable to afford anything.