Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Fed Ends Zero-Rate Era

bloomberg.com

Post reply on HN
Print view View original

151–160 of 361 posts

Re: Fed Ends Zero-Rate Era

#151

Post by maratd »

[deleted] wrote: post #147
jpadkins wrote: post #140

Earlier quoted context omitted.

> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people (congress) to spend $3 trillion smarter? It's an impossible task. A fools errand. Even if we elected the 500 smartest people to congress, the results wouldn't be much better. We need less of the economy flowing thru the federal government, not more.

[deleted]

> Billionaires?

Individuals. Regular people. When billionaires spend money, who do you think earns it? And who taxes those earnings?

Re: Fed Ends Zero-Rate Era

#152

Post by [deleted] »

clarkmoody wrote: post #141
jbooth wrote: post #105

Earlier quoted context omitted.

It's not about 'wisely' in terms of returns to the individual who invested, it's about 'wisely' in terms of creating aggregate demand. For example, funding a bunch of national infrastructure projects would have horrible returns, being a 100% loss to the person who spent the money. But that money circulates in the economy, creating demand, and we get the infrastructure afterwards as well. That's speculation, of course…

Many smart people argue that the New Deal prolonged the Great Depression due to the government's incessant meddling in the market with price controls and new regulations.

[deleted]

Re: Fed Ends Zero-Rate Era

#153

Post by jellicle »

clarkmoody wrote: post #141
jbooth wrote: post #105

Earlier quoted context omitted.

It's not about 'wisely' in terms of returns to the individual who invested, it's about 'wisely' in terms of creating aggregate demand. For example, funding a bunch of national infrastructure projects would have horrible returns, being a 100% loss to the person who spent the money. But that money circulates in the economy, creating demand, and we get the infrastructure afterwards as well. That's speculation, of course…

Many smart people argue that the New Deal prolonged the Great Depression due to the government's incessant meddling in the market with price controls and new regulations.

Nobody honest does. But I do agree with you that any economic opinion, no matter how nonsensical and contrary to evidence, can be purchased.

Re: Fed Ends Zero-Rate Era

#154

Post by Shivetya »

jpadkins wrote: post #140
roymurdock wrote: post #28

Fed raising interest rates 0.25% and setting a goal of "normal" 2% by 2018 means little to nothing. Market already priced the miniscule rate hike in as the move was widely expected, and move did nothing to assure markets that the Fed is in control, or set credible, measurable goals for future hikes. Fed can continue to push on the supply side of money at the bank/institutional level all it wants. We need the Federal…

> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people (congress) to spend $3 trillion smarter? It's an impossible task. A fools errand. Even if we elected the 500 smartest people to congress, the results wouldn't be much better. We need less of the economy flowing thru the federal government, not more.

The Federal Government's expenditures needs to be a lot lower than it is across the board. It needs a serious dose of efficiency. The borrowing alone impacts all business and individuals simply because it removes money from individuals directly and indirectly which slows the economy, puts pressure on future governments to raise taxes furthering the loss of spending by individuals, and lastly leads to uncertainty in the future.

The truly sad part is they could balance the budget and operate with a surplus by doing two simple things, getting rid of baseline budgeting and keeping spending increases under inflation. Some projections put doing those two items as righting the budget in less than 10 years

Look up the term dead weight losses to get an idea of how bad government spending is for the economy versus private spending.

Re: Fed Ends Zero-Rate Era

#155

Post by hackaflocka »

roymurdock wrote: post #28

Fed raising interest rates 0.25% and setting a goal of "normal" 2% by 2018 means little to nothing. Market already priced the miniscule rate hike in as the move was widely expected, and move did nothing to assure markets that the Fed is in control, or set credible, measurable goals for future hikes. Fed can continue to push on the supply side of money at the bank/institutional level all it wants. We need the Federal…

So... is this a good time to short bonds?

Re: Fed Ends Zero-Rate Era

#156

Post by beambot »

jdc wrote: post #148
jpadkins wrote: post #140

Earlier quoted context omitted.

> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people (congress) to spend $3 trillion smarter? It's an impossible task. A fools errand. Even if we elected the 500 smartest people to congress, the results wouldn't be much better. We need less of the economy flowing thru the federal government, not more.

The 500 smartest people? They simply delegate and entrust a small committee of the five most qualified people with the resources they need to get the job done.

Five people controlling the collective spending of the world's 1st or 2nd largest economy... that sounds like a scary amount of power for any small number of individuals. No thanks.

Re: Fed Ends Zero-Rate Era

#157

Post by mywittyname »

jstalin wrote: post #79
gotchange wrote: post #76

Earlier quoted context omitted.

With all due respect, just ask any fat cat on Wall St. about the Fed or the role of central banks in the economy and he would assert that those institutions are essential for the global economy to function correctly and they are really upapologitically capitalists and they wear the label as a badge of honor.

They're "capitalists" as long as they have a thumb on the scale, but they're not really capitalists who would cheer a true free market in currency.

The USD is about as free market as a currency can be reasonably obtain. The Fed allows the market to drive the money supply through lending. Institutional banks can effectively create an unlimited supply of money on demand through lending; they just ask the Fed for money and pay the discount rate.

So it's largely the market that drives short and medium term inflation through borrowing. The Fed uses treasury bonds to balance the money supply.

It's not a perfect system, but it's the best system we know of.

Re: Fed Ends Zero-Rate Era

#158

Post by bpodgursky »

Frondo wrote: post #145
jpadkins wrote: post #140

Earlier quoted context omitted.

> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people (congress) to spend $3 trillion smarter? It's an impossible task. A fools errand. Even if we elected the 500 smartest people to congress, the results wouldn't be much better. We need less of the economy flowing thru the federal government, not more.

Nah, it's actually pretty easy. The 535 people just need to assign general priorities, like spend a third our country's money on health care and education, a third of it on infrastructure, a little bit on funding pure research, and whatever's left over, the military can have. They're not in charge of deciding how each individual dollar is spent, and they shouldn't be.

This is super naive. For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit.

The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those.

Post reply on HN