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Thread: QE 1, 2 and 3 explained

  1. #21
    [QUOTE=Winstonbiggs;4054552]When we were in full employment and people needed workers and my employer told me he was only going to give me a cost of living increase I told them flat out I wouldn't except it. I wanted a real wage increase above the cost of living because my labor was in demand.

    When you have GDP growing at a rate that jobs aren't created employers don't have to give cost of living raises because you can be replaced in about 5 seconds. When you have real inflation on food and energy and wages are under pressure because there is way more supply then demand inflation destroys buying power. Less buying power means less demand and the cycle continues...

    A little inflation in a vibrant economy and wages generally keep up. Inflation in a dead economy is death to the middle class. [B]The fed wanted to create inflation to create demand instead it has reduced buying power and demand is starting to follow, GDP growth is slowing[/B].[/QUOTE]

    And that is why a tax increase could really hurt. Demand is down and a tax increase could make it fall further

  2. #22
    [QUOTE=Warfish;4054544]Just because your talking points memo says it's "unfeasable" or "unfair" or whatever other catchphrase it being bandied about today, doe snot make it so my friend.

    Massive cuts are absolutely possible. As is an end to the three (four, six, saw we just attacked in Somalia too) Wars.[/quote]

    this government, the way it is set up, cannot cut 1/3 of it's spending that quickly. you claim it is possible, but you have nothing to back that up.

    A. No, we cannot neccessarily "control" inflation. See Wiemer, Republic, for a perfect example, one of many many many of runaway inflation totally destroying an economy.

    Good luck fiding alot of examples where deflation (currency worth more buying power) destroyed an economy in such a way.[/quote]

    how about Japan? Yes we can take steps to control inflation. that's what a central bank can do.

    And I don't believe anyone would be stupid enough and so completely ignorant as to accept that lame excuse for a denial of merit increases.[/QUOTE]

    what was my other option? quit?

  3. #23
    [QUOTE=Winstonbiggs;4054552] The fed wanted to create inflation to create demand instead it has reduced buying power and demand is starting to follow, GDP growth is slowing.[/QUOTE]

    GDP estimates were just revised... UP.

  4. #24
    [QUOTE=bitonti;4054892]GDP estimates were just revised... UP.[/QUOTE]

    They were revised up from 1.8% to 1.9% for the first quarter down from 3.1% for the 4th quarter. The revision is because of inventory gains. They also revised up the inflation rate and most economist have revised down the yearly growth from 3.1 to 2.7%.

    By any measure the economy is in stagflation. Growth to low to create jobs along with inflation that reduces buying power. Hopefully much of this was a parts issue from Japan and lost confidence because of Europe?

    We need to get growth rated much higher to have a chance to reduce some of the chronic unemployment. By any measure this is a weak slow recovery at best and the start of a chronic period of sputtering growth coupled with inflation that slowly bleeds the working middle class?
    Last edited by Winstonbiggs; 06-29-2011 at 12:33 PM.

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