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Fed Bond-Buying Bonanza: $85 Billion a Month Until Unemployment Hits 6.5%

US Politics & Gov't  (tags: )

- 2138 days ago -
Lets keep printing money that does not really exist to buy bonds with so we can pretend to stimulate the economy!???? MORONS .....


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Cam V (417)
Wednesday December 12, 2012, 7:15 pm
In an unprecedented and surprising move, the Federal Reserve announced on Wednesday that it will keep interest rates near zero and will purchase $85 billion in bonds every month until unemployment falls from its present 7.7% to 6.5%.

The new plan will maintain the $40 billion a month of mortgage-backed bond buying it began in September while adding another $45 billion in Treasuries.

Where will the cash to bankroll the $85 billion-a-month bond-buying binge come from? The Fed plans to expand it's $2.8 billion balance sheet.

The new round of so-called “stimulus” is meant to replace the soon to expire “Operation Twist” program that shoveled $45 billion a month into long-term Treasuries funded by the sale of short-term debt. Since that effort failed to create economic growth, and the Fed has no more short-term securities left to sell, the Wall Street Journal says the Fed will “effectively print more money” out of thin air to fund the scheme.

Why is the Fed foisting this newest round of “stimulus” on the American economy? Because economists predict that last quarter’s anemic 2.7% economic growth figure will slide down to a near lifeless 1.2% this quarter.

Fed Chairman Ben Bernanke believes printing and pumping billions of new dollars into the U.S. economy while holding interest rates near zero until joblessness falls (unless inflation exceeds 2.5%) will help interest rates remain low and will jump-start investment and job creation. But mortgage rates and other loan rates are already at historic lows, and job creators have signaled that they have few plans to boost hiring.

Since 2008, the Fed has more than tripled the size of its portfolio of assets to $2.861 trillion.

Roseann d (178)
Wednesday December 12, 2012, 7:49 pm
Or we could just have the rich pay their taxes. Payment due for the BushCo wars Bush supporters wanted. War isn't free ya know. You guys pay BushCo's portion of the deficit, the rest of us will pick up the pittance Obama has added by comparison. There you go... Everybody's happy!

Paula M (39)
Thursday December 13, 2012, 3:04 pm
Roseann, the wealthy currently pay a larger share of tax revenues than they did at the beginning of George W. Bush's presidency - and the lowest 90% pay a smaller share now than they did then. Your suggestion that the wealthy are enjoying a tax holiday at everyone else's expense is simply incorrect.

We cannot raise enough money from taxing the wealthy to pay off our current level of spending, even if it was right or useful to ask them to do so. A middle-class tax hike is coming, and unless we do something to restrain our irresponsible rate of spending and address our unsustainable future commitments the future cost will be dear.

That said, I would gladly agree to a deal in which conservatives were responsible only for President George W. Bush's deficit spending and had no obligation to pay for the irresponsible level of spending that President Obama is incurring - such an arrangement would save me a great deal of future grief.

Past Member (0)
Sunday December 16, 2012, 1:01 pm
Bush's wars, ahole.

The Cost of War. $2.5 TRILLION - Accrual Cost of Bush War on Women...
Of course 300 million Americans are already up for a bill of $2.5 trillion i.e. $8,333 / head (the accrual cost of the Bush War on Terror). This Bill will add a further $73,667 / head for a grand total of $82,000 for every man, woman and child in America.
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