Government buys $1T of securities

[saden1]

Our current problem is a liquidity trap and deflation. I very much doubt a ~15 trillion GDP economy with ~2.7 trillion in receipts and ~100% debt to GDP ratio will suffer inflation as easily as some would have you believe. Sure, it's possible but there would have be serious negligence and gross miscalculation for that to happen (i.e. we print a multiplier of our national debt).

p.s. What monetary tool do you think the government uses to combat inflation? If you guessed tighten money supply you would be correct.

[firstdown]

Originally Posted by saden1

Our current problem is a liquidity trap and deflation. I very much doubt a ~15 trillion GDP economy with ~2.7 trillion in receipts and ~100% debt to GDP ratio will suffer inflation as easily as some would have you believe. Sure, it's possible but there would have be serious negligence and gross miscalculation for that to happen (i.e. we print a multiplier of our national debt).

p.s. What monetary tool do you think the government uses to combat inflation? If you guessed tighten money supply you would be correct.

"serious negligence and gross miscalculation " How about bailout money and AIG

Economists disappointed with Obama, Geithner - BloggingStocks

[saden1]

Originally Posted by firstdown

"serious negligence and gross miscalculation " How about bailout money and AIG

Economists disappointed with Obama, Geithner - BloggingStocks

In your world any bailout is serious negligence and gross miscalculation so I am not entirely sure you're in a position to do any serious analysis. AIG got bailed out for cause and if I was a betting man I would bet your insurance business uses their service up the chain.

[firstdown]

Originally Posted by saden1

In your world any bailout is serious negligence and gross miscalculation so I am not entirely sure you're in a position to do any serious analysis. AIG got bailed out for cause and if I was a betting man I would bet your insurance business uses their service up the chain.

I don't have a problem with goverment bailouts but blindly giving them money is a hugh problem. I bet if you asked Obama or congress to tell us what was done with just a 1/10 of the money they could not answer the question any better then saying it went to AIG, Chevy, Ford etc... How the money is getting used and how it will be paid back is my concern. Not sure about your last statement.

[steveo395]

Originally Posted by firstdown

I don't have a problem with goverment bailouts but blindly giving them money is a hugh problem. I bet if you asked Obama or congress to tell us what was done with just a 1/10 of the money they could not answer the question any better then saying it went to AIG, Chevy, Ford etc... How the money is getting used and how it will be paid back is my concern. Not sure about your last statement.

Just like the AIG bonuses. Congress could have put it in the bill that they weren't allowed to give bonuses, but they purposely left that out of there, and now they are acting like they knew nothing about it. They are acting like they are innocent bystanders while the people on wall street are evil for honoring their contracts. The government is going to save us from something they let happen in the first place.