Quantitative Easing- which we all know as QE- is about to happen from the Federal Reserve to us, the lowly taxpayer. The believe in programs like these is that we need some Fed action to spur economic activity, and through that job creation (which is one of their dual mandates).
DO YOU BELIEVE THAT?
My opinion is simply this- we have WAY to many issues, uncertainties, and barriers to economic activity to have any meaningful positive impact from a Fed decision. In theory, I get it. In actually, I think it is an act of futility.
The Federal Reserve already owns over 1 Trillion in US debt... with more on the way as the implement QE programs. Isn't one of the lessons we learned in the economic collapse that to much debt is bad? Granted, debt is a necessary piece of capitalisms' success.
The Federal Reserve is also going to have to unwind that position. What does that mean? We have to buy it back from them, so the more they do now- the bigger our US Gov't credit card tab goes- and the more that you and I will be on the hook for.
Are you looking forward to that day? Do you want that number to be bigger, for no gain? THAT is where my head is at right now.
We are in a do-nothing election year, about to hit the debt ceiling, facing a massive tax increase, sequestration (the automatic cuts into Federal Gov't spending), continuing implementation of the CFTC (financial regulation package) and AHCA (Obamacare mandate). Does this sound like an environment that a QE program would thrive?
Oh, by the way, we have the Euro-zone facing a monumental challenge, global slowdown, possible downgrade of US credit rating, extreme unrest in Libya/Egypt/Yemen, still have two active wars in Afghanistan and Iraq, and an energy pricing which has seen Oil and Gas increase by over 12% in the last 45 days at a time when energy pricing is normally dropping after the summer driving season.
Feel better now? Me either.
I get the feel to do something, and I agree with the need to do something. BUT you can't spend to spend, you need to make a better decision than that. But here is the ultimate kicker.
They can't do what is necessary like cut spending or raise taxes. They aren't the Congress. But they are the only game in town until Nov 6th.. HINT: Be sure and Go Vote on that day if you care about the ultimate direction of our country.
The White House doesn't lead. The Senate doesn't act. The House can't do it alone. GRIDLOCK is killing our economy more than anything.
And we are about to dump more money down a well on a new QE program? WHY?
I think the American people deserve to know that answer before you go and put us in more debt. Don't you?