Dow @ 20K. Time to jump off!
POSTED BY: JO753
UPDATED: Friday, April 4, 2025 13:08
VIEWED: 120054
PAGE 5 of 119
This problem really has nothing to do with Trump.
My question is why do we even have a debt ceiling if all we're going to do every year is pretend like it means anything as if it's not going to be raised significantly.
Quantitative Easing. Obama's legacy.
If history ever gets over the fact that he was the first black president, it won't remember him very fondly.
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Quote:It is not that the USA has borrowed too much. The problem is the USA spent too much on bad projects with no return on the investment. The Democrats/Republicans don't agree on what a bad project is.
Originally posted by 6stringJoker:
This problem really has nothing to do with Trump.
My question is why do we even have a debt ceiling if all we're going to do every year is pretend like it means anything as if it's not going to be raised significantly.
Quantitative Easing. Obama's legacy.
If history ever gets over the fact that he was the first black president, it won't remember him very fondly.
Funny that you should mention Quantitative Easing. It worked differently than you think. It turned a profit, not a loss:
The Fed’s $3.5T QE purchases have generated almost half a trillion dollars for the US Treasury since 2009
www.aei.org/publication/since-2009-feds-qe-purchases-transferred-almos
t-half-trillion-dollars-treasury-isnt-gigantic-wealth-transfer/
Bottom Line: While the record transfer of almost $100 billion from the Fed to Treasury last year has gotten some media attention, what hasn’t been reported, except by the WSJ today is this: The monetary expansions known as QE1, QE2, and QE3 ended up being a gigantic transfer of wealth from the private sector to the public sector. By “acquiring” almost $3.5 trillion in assets with a “magic checkbook” that were previously held largely by private investors and the private sector, those trillions of dollars in Treasury and MBS securities, along with the billions of dollars in interest income those securities generate, got transferred to the Fed, which has then transferred almost half a trillion dollars in residual interest earnings to the US Treasury in the last six years.
Q: Is that fair/accurate to describe QE1, QE2 and QE3 — as monetary policies that ultimately transferred billions of dollars in private wealth to the US Treasury via the Fed? Or is it more accurate to describe it as printing money to finance the government’s budget deficit disguised to look like monetary policy, since the bond holders got paid for their securities? (Thanks to Jeff Dorfman for help with that second description.)
Update 1: Or here’s how Jon Murphy describes it in an email: “The Fed is just printing money and giving it to the Treasury but ‘laundering’ it through bonds.”
Update 2: Another way to think of the Fed’s $3.5 trillion acquisition of assets through QE1, QE2 and QE3 is to view the Fed as the “world’s largest hedge fund” — see posts by Scott Grannis here and here for details.
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Quote:
Originally posted by second:
It is not that the USA has borrowed too much. The problem is the USA spent too much on bad projects with no return on the investment. The Democrats/Republicans don't agree on what a bad project is.
Both are a problem. When they've gone hand in hand for so long, I don't see any reason to say one is more of a problem than the other. They're a package deal at this point.
I don't agree with either Republicans or Democrats on what the money is spent on. It's all wrong... just for very different reasons.
Quote:
Funny that you should mention Quantitative Easing. It worked differently than you think. It turned a profit, not a loss:
Not for the average joe who has bills to pay and mouths to feed. Wages have been stagnant forever yet every monthly bill and the price of food and textiles rises every year. Not to mention the ACA insurance premium increases of roughly 30% per year compounded.
I don't care if the government or big business are doing better when the working class are suffering.
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Quote:I recall you were affected by Financial crisis of 2007–2008. That was caused by Republicans. Republicans say they had nothing to do with it, but that is/was/always an untruth. https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008
Originally posted by 6stringJoker:
I don't care if the government or big business are doing better when the working class are suffering.
The Dodd–Frank Act was enacted in the aftermath of the crisis to "promote the financial stability of the United States" and it did. But on June 8, 2017, the Republican-led House passed the Financial CHOICE Act, which if enacted, would roll back many of the provisions of Dodd–Frank. But the Republicans have already stopped enforcing Dodd-Frank in order to set the stage for the next Financial crisis, which Republicans will say they didn't cause, once it arrives.
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Dow at 22,092 toady.
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Quote:Hahahahahahahahahahahaah.
Originally posted by second:Quote:I recall you were affected by Financial crisis of 2007–2008. That was caused by Republicans. Republicans say they had nothing to do with it, but that is/was/always an untruth. https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008
Originally posted by 6stringJoker:
I don't care if the government or big business are doing better when the working class are suffering.
Haha.
Yep, the economy-destroying Rock-The-Vote Democraps had nothing to do with their Federal Budget, which went into effect in October 2007. Nope, nothing to see herre, folks. The Rock-The-Vote Democraps who promised to destroy the economy were not the men behind the curtain who created their own Fedral Budget FY2008 - no sireee.
What a laugh.
The Rock The Vote Recession must be blamed on somebody who didn't have control of Congress - must be the Libertarians.
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Quote:
Originally posted by second:Quote:I recall you were affected by Financial crisis of 2007–2008.
Originally posted by 6stringJoker:
I don't care if the government or big business are doing better when the working class are suffering.
It didn't effect the money I had saved. I invested wisely. Then I bought a house and cashed out completely.
I lost a great job at the end of 2009 and haven't found anything even close to it since, but then again, I haven't been looking all that hard either.
The financial crisis that happened then and is still very strong a decade later didn't really effect me all that much. A lot of people I care about were hit pretty hard though.
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8 straight days of record high closes. Capitalists are running wild. Damn that Russian stooge Trump! 
https://www.cnbc.com/2017/08/04/us-stocks-jobs-report-beats-fed.html
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Quote:They can be hurt a second time:
Originally posted by 6stringJoker:
The financial crisis that happened then and is still very strong a decade later didn't really effect me all that much. A lot of people I care about were hit pretty hard though.
How Bad Will It Be If We Hit The Debt Ceiling?
The odds of a self-inflicted US debt crisis now look pretty good: hard-line Republicans are eager to hold the economy hostage, Democrats are in no mood to make concessions, and Trump is both spiteful and ignorant. So it looks fairly likely that by October or so there will come a day when the U.S. government stops paying some of its bills, including interest on debt.
How bad will that be? The truth is that we don’t know; but it may be helpful to talk about *why* we don’t know.
Until now, US debt has played a special role in the world economy, because it is — or was — the ultimate safe asset, the thing people can use to secure transactions with no questions about it retaining its value. In a way, the dollar is to other moneys as money is to other assets, and US dollar debt is the form in which dollars are held with ultimate safety.
Taking away that role could be very nasty. One prominent interpretation of the 2008 financial crisis is that it was a “safe asset shortage“: when people realized that those AAA securities engineered from subprime loans weren’t the real thing, they scrambled into an inadequate supply of trill safe stuff. Deprive them of dollar debts as safe assets, and terrible things could happen.
The question then becomes whether an interruption in payments would really knock out the special role of U.S. debt.
Suppose that everyone expected normal payments to resume, with back interest, in a couple of weeks. In that case, even a slight discount on, say, Treasury bills would make them a very good investment — so speculators would basically step in and support the value of U.S. debt despite temporary default. In that case default might not be that big a deal.
The big problem would come if investors see the default as more than a temporary glitch — if they see it as a sign of enduring, critical dysfunction in American governance. In that case they wouldn’t necessarily step in to buy our debt, and their confidence in the whole economic edifice would take a severe hit.
https://krugman.blogs.nytimes.com/2017/08/07/how-bad-will-it-be-if-we-
hit-the-debt-ceiling/
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Dow closes 22,118 today.
That is up 2,386 since taking office. 6 1/2 months ago.
That is a gain of over 12% so far, and over 22% per annum so far.
For those not so clued on the math concept, that is more than the 8% per year Obama did in his first 2 years - without GOP control of Congress.
And that is more than the 12% per year for Bobo's 6 years with GOP control of Congress, despite Bobo having the absolutely easiest period for economic recuperation. Now Trump is adding on top of already historic highs, a much more difficult feat.
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