July 29, 2011 Leave a comment
In other words, pushing more spending no matter what. The Fed such pump out more money into the economy.
Balancing the budget or cutting spending will hurt the economy even more than it is now.
In the first six months of 2011 real GDP grew at an annual rate of only 0.8% per year. At that growth rate, unemployment will rise at about 1 percentage point per year.
I need to see the guts of the numbers, but unless there is something very odd in them, the chance that the unemployment rate will be above 9% in November 2012 just crossed 50% heading upward.
A rational Federal Reserve would:
Begin QE III today.
A rational administration would:
Announce a technical fix to the debt ceiling today: the economy does not need the risk.
Abandon all long-term budget negotiations with anybody who requires cuts to the deficit over the next eighteen months to come to the table: the economy needs stimulus, not contraption.
Take every single uncommitted TARP and TALF and whatever dollar, leverage it up, and throw it at the economy to boost aggregate demand.