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Old March 4th, 2015, 07:11 PM   #1
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The Federal Reserve Boardís Plan to Kill Jobs

There is an enormous amount of political debate over various pieces of legislation that are supposed to be massive job killers. For example, Republicans lambasted President Obamaís increase in taxes on the wealthy back in 2013 as a job killer. They endlessly have condemned the Affordable Care Act as a job killer. The same is true for proposals to raise the minimum wage.

While there is great concern in Washington over these and other imaginary job killers, the Federal Reserve Board is openly mapping out an actual job-killing strategy and drawing almost no attention at all for it. The Fedís job-killing strategy centers on its plan to start raising interest rates, which is generally expected to begin at some point this year.

The Fedís plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fedís current 2.0 percent target if the Fed doesnít slow the economy with higher interest rates.

Higher interest rates slow the economy by discouraging people from borrowing to buy homes or cars. They will also have some effect in discouraging businesses from investing. With reduced demand from these sectors, businesses will hire fewer workers. This will weaken the labor market, which means workers have less bargaining power. If workers have less bargaining power, they will be less well-situated to get pay increases. And if wages are not rising there will be less inflationary pressure in the economy.

The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fedís rate hikes would have cost the economy more than 200,000 jobs in this scenario.

For comparison purposes, we are having a big fight over the Keystone pipeline. The proponents of the pipeline point to the jobs created by building a pipeline as an important justification, even if the oil being pumped through the pipeline may cause enormous damage to the environment. According to the State Departmentís analysis, building the pipeline would create 21,000 jobs for two years. This pipeline related jobs gain has been widely touted in the media and is supposed to make it difficult for many members of Congress to go along with President Obama in opposing Keystone.

Yet, the Fed can easily destroy ten times as many jobs with a set of interest rate hikes this year with its actions passing largely unnoticed. In fact, the impact of Fed interest rate hikes on jobs can easily be far larger than this 200,000 number. If the Fed decides that the unemployment rate should not fall below a certain level (5.4 percent is a number is often used), then it could be costing the economy millions of jobs if the economy could actually sustain a considerably lower level of unemployment as it did in the late 1990s.

To be clear, Federal Reserve Board Chair Janet Yellen and her colleagues on the Fedís Open Market Committee (FOMC), the committee that determines interest rates, are not evil people sitting around figuring out how to ruin the lives of American workers. The Fed has a legal mandate to control inflation, in addition to its mandate to sustain high levels of unemployment. If they raise interest rates it will be because they fear inflationary pressures will build if they let the economy continue to grow and unemployment to fall.

The Federal Reserve Board?s Plan to Kill Jobs
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Old March 5th, 2015, 06:16 AM   #2
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Our economy and the stock market has been artificially propped up by near zero interest rates, free money, and $12 trillion in stimulus spending for 7 years.

We are due for a cyclic recession and raising interest rates is good way to usher it in.

Our economy is sick and there is no easy way out.
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Old March 5th, 2015, 07:21 AM   #3
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Our economy and the stock market has been artificially propped up by near zero interest rates, free money, and $12 trillion in stimulus spending for 7 years.

We are due for a cyclic recession and raising interest rates is good way to usher it in.

Our economy is sick and there is no easy way out.
12 Trillion ?? that's a bit of an over statement isn't it.
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Old March 5th, 2015, 07:27 AM   #4
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Our economy and the stock market has been artificially propped up by near zero interest rates, free money, and $12 trillion in stimulus spending for 7 years.

We are due for a cyclic recession and raising interest rates is good way to usher it in.

Our economy is sick and there is no easy way out.


"Our economy is sick and there is no easy way out."

"How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."


Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
Reagan insider: 'GOP destroyed U.S. economy' - MarketWatch
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Old March 5th, 2015, 08:02 AM   #5
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Originally Posted by intangible child View Post
"Our economy is sick and there is no easy way out."

"How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."[/B]

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
Reagan insider: 'GOP destroyed U.S. economy' - MarketWatch
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Old March 5th, 2015, 09:39 AM   #6
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Last edited by intangible child; March 5th, 2015 at 09:44 AM.
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Old March 5th, 2015, 09:54 AM   #7
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12 Trillion ?? that's a bit of an over statement isn't it.

We have a clause in Section 30 of the Federal Reserve Act of 1913 allowing the US to buy back the Federal Reserve Corporation for roughly $500 billion dollars any time we wish. We may also abolish the Federal Reserve Corporation, or repeal the act, our choice. The last provision of the Federal Reserve Act of 1913, Sec. 30 states the right to amend, alter or repeal this act is expressly reserved. This language means that congress can at any time move to abolish the Federal Reserve System, or buy back the stock and make it part of the Treasury Department, or to alter the system as it sees fit. It has never done so. Should we buy it back, the $500 billion represents outstanding stock shares.

The FED holds the $7 trillion dollar interest debt paid by the income tax and the social security debt of $10 trillion dollars for a total of $17
trillion dollars.
Good purchase don't you think? $500 billion to buy the company that holds the notes for our $17 trillion dollar debt? No more income tax, IRS, Federal debt, etc. The US treasury makes our money again, backed by gold and silver, and Americans now keep an extra 30 to 40 percent of their wages which will create the greatest economic boom in the history of the United States of America. Why doesn't the government answer this question as to why they are fraudulently cheating Americans?

http://web.archive.org/web/200702062...Flyer_Back.pdf

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Old March 5th, 2015, 05:52 PM   #8
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12 Trillion ?? that's a bit of an over statement isn't it.
Not at all, $7 trillion in deficit spending and $5 trillion in stimulus using printed money from the FED.
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Old March 5th, 2015, 05:59 PM   #9
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Originally Posted by intangible child View Post

We have a clause in Section 30 of the Federal Reserve Act of 1913 allowing the US to buy back the Federal Reserve Corporation for roughly $500 billion dollars any time we wish. We may also abolish the Federal Reserve Corporation, or repeal the act, our choice. The last provision of the Federal Reserve Act of 1913, Sec. 30 states the right to amend, alter or repeal this act is expressly reserved. This language means that congress can at any time move to abolish the Federal Reserve System, or buy back the stock and make it part of the Treasury Department, or to alter the system as it sees fit. It has never done so. Should we buy it back, the $500 billion represents outstanding stock shares.

The FED holds the $7 trillion dollar interest debt paid by the income tax and the social security debt of $10 trillion dollars for a total of $17
trillion dollars.
Good purchase don't you think? $500 billion to buy the company that holds the notes for our $17 trillion dollar debt? No more income tax, IRS, Federal debt, etc. The US treasury makes our money again, backed by gold and silver, and Americans now keep an extra 30 to 40 percent of their wages which will create the greatest economic boom in the history of the United States of America. Why doesn't the government answer this question as to why they are fraudulently cheating Americans?

http://web.archive.org/web/200702062...Flyer_Back.pdf

Who Rules America? (2012) - Top Documentary Films
Something that changed under Obama is that for the first time in history the FED bought mortgage based securities from private banks. Wall Street off loaded trillions in worthless MBSs in Obama's backdoor Wall Street bailout to his big contributors. Its is illegal for the FED to buy anything but US treasuries, but they claimed since most were backed at some level by Fannie or Freddie they should be considered US debt.
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Old March 5th, 2015, 06:09 PM   #10
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Originally Posted by intangible child View Post
"Our economy is sick and there is no easy way out."

"How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."[/B]

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
Reagan insider: 'GOP destroyed U.S. economy' - MarketWatch
David Stockman, who always has something to say negative when he has a book coming out, and you will post something that will probably have coincided with a book release. How much money Stockman cost the Blackstone Group with this horrible economic acumen before being demoted. That hurt Stockman's feelings, so he quit and formed his own company, Heartland Industrial Partners, and his economic wizardry was going to make billions. Then Stockman was going to work his economic wizardry with pensions through Heartland Industrial Partners. The Canada Pension Plan invested $146 million with Stockman, whose economic wizardry quickly turned it into $45 million.

Stockman was so arrogant the he put himself as CEO of Collins & Aikman and ran it Chapter 13, and his misleading of the investors caused Stockman to be indicted. He had to pay a $7 million fine.

Stockman has lost the money invested with him for the past 25 years because he bet on the economic trends that his economic wizardry told him was a sure thing.
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