NP - The Fed's Priorities

[Paul Mackin]

On 8/5/2012 2:17 PM, alice wellintown wrote:
> we had a bust, a big bust, a huge bust and because the boom and bubble
> were made by debts, a good deal of it housing debts,we have to clean
> up the balance sheets around housing and that means that consumers and
> banks must pay down debts and get rid of bad one. this is happening at
> a remarkable pace, given the size of the problem and given the
> so-called headwinds, foreign and domestic, such as the euro-zone
> problems and the political and fiscal complications that compound and
> prevent additional solutions from being implemented. I suspect that we
> have hit a bottom on housing. this does not mean that we can expect
> housing to perform well over the next 5 years, but the shadow
> inventories and the underwater price to mtg ratios are no longer at
> crisis levels. the income to debt ratios, though much improved, has
> also a ways to go. it will be slow. unemplyment will hang around 7 for
> 5 years or more. this is the reality and there is little that any
> institution, the fed, the congress, can do to speed up the recovery.
> that is, there is not much more they can do; the fed has done a
> brilliant job thus far.
>
> the come back kid, as the economist call the us economy, is recovering
> with remarkable speed. when we contrast it with euo zone, japan, etc,
> we can see that the us economy is a flexible and resiliant one. at
> this point, we simply need more time.
>
Yes, of course, time is needed, but what about the irreparable harm 
being done by Congressional inaction on spending to prop up state and 
local jurisdictions?   Teacher layoffs,  law enforcement, health care, 
infrastructure maintenance, etc. The short term is important too.

The central banks of the U.S. and Europe want more government action and 
are waiting for it to happen, and waiting and waiting.  In the U.S. 
there is no excuse.

The p-list has one resident physicist and maybe a couple three 
musicologists but we got a whole shitload of economists.  Why can't we 
come up with something the dismal science will be proud of?

P

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