The Federal Reserve Raises Interest Rates By 0.75 of a Percentage Point - Slashd...

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• Re:

  It's going to be a Depression. Stock up on ammo and canned goods.

  • Dry goods better

    Rice and dried beans are better than most canned goods. You basically need about five years of emergency food. Don't forget enough to help others too as needed.

    Ammo is important but maybe even more important - invest in good cameras around your place... if you can scare someone off early without shooting them, all the better.

    Also security film for all ground floor windows, maybe don't install it yet but just get some now for later. Kind of depends where you live.

    • Re: Dry goods better

      Beans are great, tasty, and easy to grow. A few beans can give you a full backyard of beanstalks, and a lot of beans.

    • Re:

      "even more important - invest"
      buy it cheap and wait for market to recover. unless its the apocalypse in which case none of this matters. so chances are these will bounce right back up once enough money is made elsewhere.

      • Re:

        100% agree - the odds of an apocalypse is low, if it does happen none of this matters - buy low/now and wait 5-8 years and be golden, glad my retirement target is yesterday 2032, should be right at the right point in the cycle.

  • Re:

    Gee, if we hadn't flooded the U.S. with guns, you wouldn't need that ammo. Also, be careful around the wife and kids, you wouldn't want to shoot of them by mistake. Also be careful to keep the guns away from the wife and kids, they may not like you as much as you think. Come to it, better lock it up tight in case some burglar breaks in and can steal your gun and shoot your ass. And be sure of your mental health, you may not like yourself as much as you think. Guns Yeah!!

• If you really trust your ability to predict the economic future, then buy stock shorts and puts. In short, put your money where your mouth is. Whatever random uncertainty there was to economic prediction in the past, the pandemic quadrupled it. And add in the war. Thus, using past recessions as a reference source is extra dubious these days.

  • Re:

    Trash talking is low risk. That's why there's so many stupid people on the internet. The majority of them are unlikely to be quite as stupid in real life.

  • Re:

    How about instead we take the idea of betting against success in Capitalism, and shove it over a fucking cliff instead?

    You wonder how we got here, and then ask for another helping of shit soup. Brilliant. As if profiting off COVID wasn't bad enough.

    • Re:

      How about instead we take the idea of betting against success in Capitalism

      No, because history has shown this to be a losing bet, with dire consequences.

• Biden recently said “Milton Friedman isn't running the show anymore.”

  Looks like the rules he described for how inflation works are still in charge, though...

• • Re:

    Imagine the Fed not being able to predict the future. What the hell are we paying them for if we can look behind with 20-20 hindsight and complain?

  • There are a couple problems with your statement.

    1) "The Fed" is not part of the current - or any - administration. You might recall the previous president complaining regularly about the Fed not doing what he wanted. This didn't magically change when Biden was elected.

    2) More current members of "The Fed" were appointed during the Trump administration (3) than during the Biden administration (2) - including the Chairman. The sixth member has been around since Obama.

    https://www.federalreserve.gov... [federalreserve.gov]

    • Re:

      What the fuck are you doing bringing facts into a perfectly good emotional and irrational us-versus-them argument? Don't you know this is Slashdot, where opinions are sunk in like tungsten bricks in 3,000 foot deep ocean trenches?

  • Re:

    What does the Fed have to do with the "current administration"? It's an independent entity.

    I think the current economic situation is tricky and defies easy solutions, plus nobody really thought it was a good idea to raise interest rates during the pandemic given the economic risks already present.

    • I think the current economic situation is tricky and defies easy solutions, plus nobody really thought it was a good idea to raise interest rates during the pandemic given the economic risks already present.

      And that's the problem.

      There's a lot of momentum in the economy - anything you do takes months before you start seeing the effects.

      When COVID hit, things shut down, and the economy look like it was going to stall out. In this case, increasing interest rates is a hugely bad idea because that will only certainly guarantee stalling out.

      But it didn't stall out - other parts of the economy boomed, much to everyone's surprise. And boom it did leading to a wildly increased demand for consumer luxury goods. The Port of LA, the cause of a lot of backups in the supply chain, was reporting over 125% of normal pre-pandemic traffic... by October 2020.

      Automotive companies cut their production suddenly, thinking things would grind to a halt, leading to cutting orders and thus the automotive chip shortage we have because everyone shifted their production around.

      In the end, it turns out the economy is far more intertwined and complicated and it defies simple and easy solutions.

      Now we're coming out of the pandemic - the jobless rate is at an all-time low. People are hiring at unprecendented rates. Even people who got laid off often found work elsewhere, leading to a severe shortage of hospitality workers because they found less shitty more stable employment.

      With economic boom, comes inflation. The Fed has only a very crude tool (interest rates) to adjust things.

      But why now? Because we need to know if the economy is really booming, or it's a post-pandemic spike. But to do this requires 6+ months of economic data. So now we know it's not likely a brief spike in economic activity, but a boom and now we have to control it.

      Usually booms can be seen from far away, but the pandemic has made things less certain. so you don't want to overreact because is it going to be a recession (as everyone thought at the start of the pandemic), a brief slowdown (what really happened), or brief burst of activity (what we thought would happen) or a boom cycle (what is happening).

      The effects won't be felt until 6+ months down the road - and we're hoping for a cooldown of the economy to bring everything back in line, but not one that goes too far and drops us in a recession.

      The problem is, you're dealing with something with a lot of lag - you need to know if what you're seeing is going to be brief or a long term trend, but you don't know until it's past, and by then, you would've wanted to react. You also don't want to over-correct because you cannot reverse the correction and have it take place immediately - the correction takes time to work out.

      That's why recessions require two quarters.

      The economy is a lumbering beast. Is it picking up speed because of a brief dip in the road, or is it because the road is going downhill? Imagine a car whose speed can only change 10 seconds after you apply an input - and you're trying to maintain a strict 50mph - too fast and you get a ticket, too slow and you hold up traffic. You can't see the road ahead, and you see the speedometer inching upwards - what do you do? You can slam on the brakes, but by the time they take effect, your speed would've gone too fast if it's downhill, and you'd have slowed down too much if it was a brief dip.

  • Re:

    There was always the remote possibility it would not blow up. Japan seemed to be doing okay. And man, it was making big money for the right people. Printing cash and stuffing it into the government and Wall Street (trickle down) was so very lucrative [stlouisfed.org]. The plebs got their crumbs so they were (sort of) happy.

• Re:

  Raising the interest rate removes money from the economy. The fed also has other techniques for removing money from the economy, which it has been using.

  • Re:

    "The fed also has other techniques for removing money from the economy, which it has been using."

    Maybe they should be using these "techniques" faster than the rate at which they are adding money to the economy? Particularly with output either contracting or even just staying level.

    • Re:

      They are.

      Economic conspiracy theorists are so entranced by money printer memes they don't seem to realize that you can make numbers smaller as easily as you can make them bigger.

    • Maybe they should be using these "techniques" faster than the rate at which they are adding money to the economy?

      Why? This is an excuse to get interest rates back to a sane level. One of the problems with dropping interest rates to 0 is that this economic leaver disappears and can't be used to resolve a crisis anymore. Despite what you people think economics is actually an insanely complex multivariate problem that can't be reduced to "derp derp tehy printed monies! tehy bad! derp"

      • Re:

        There's the problem.:-)

      • Even a 3% interest rate is incredibly low. I'm old enough to remember when you could actually get more than 3% interest on your banking accounts and the bank rate was double digits.

        • Re:

          I'm old enough to have paid 14.5% on a mortgage. Not that I'd want to go back to those days.

  • • Re:

      There is such a thing. It's called "inflation."

      • Re:

        Inflation doesn't specifically target wealth hoarders. Sure, it hurts them, but minimum wage sure hasn't gone up by 8% in the time that consumer goods have increased by that much.

        • Re:

          Yes, it does. You're conflating two problems.

          In a free market the cost of labour would go up at the same rate as inflation. That's basically what inflation is, the increasing cost of everything in response to excess demand or insufficient supply. But the labour market isn't free, at least not in the short term. As the owner and operator of a business I might raise my prices to cover my costs, including feeding and housing myself. As a casual employee when your boss calls and asks you to work the next day yo

          • Re:

            But wealth hoarders are sitting on a pile of cash in their sofa cushions. It is invested in things that will also go up though there may be some lag.

    • Re:

      When you have a fiat currency (as the US does), taxation on a federal level literally *is* money destruction. The government prints currency, and can issue as much or as little as it wants. To keep inflation from spiraling out of control from just printing that currency, you have to remove some from circulation. Taxes are how you do that.

      • Re:

        That's not how the money supply works in the US. Taxation doesn't destroy money; repaying loans does.

      • Re:

        How do taxes remove money from the economy? The federal government is PART of the economy. It spends those tax dollars. Maybe not how you and I want them spent, but they aren't just burning your tax dollars for fucks sake.

        • Re:

          You have to look at the whole picture, starting with Congress passing laws saying how much money will be spent. They say we're going to spend $X, but the United States Treasury only has $X - $Y in it, where $Y is the budget deficit created by spending more than we are taxing. So you need to come up with $Y.

          Enter the Federal Reserve Bank and Quantitative Easing. The Treasury starts selling bonds in order to get $Y, and the Fed buys some fraction of $Y with money they wink into existence through a vote of

          • Re:

            Oh. Well that actually makes sense. I knew quantitative easing was created to remove money from the economy, but I did not quite understand how taxes and t bills figured into it.

        • Re:

          It basically comes down to whether you subscribe to Modern Monetary Theory, basically. MMT is basically how many western governments have been operating since at least the 2008 crash, if not longer. Basically MMT posits that governments have essentially two controls on the monetary system. What they spend on things, and the taxes they collect, and the two controls are not intrinsically tied. A government that issues debt in its own currency can always pay it back, because it can always issue new currency to

    • Re:

      And that tax would go where exactly? $6 trillion worth of "bailout", turned into a tax refund for the wealthy.

      In the end, some retired banker would be running the Deletion Tax department. They'd even be arrogant enough to make their corporate logo, a boomerang.

      • Re:

        "go where". What part of "delete" escapes you as a concept? Into the ether. Gone. Destroyed.

        • Re:

          Eradicating the concept of a billionaire, does nothing to the poverty and suffering that existed far before obscene wealth did. What it does do, is destroy motivation.

          You want to go after the real hoarders of wealth and power? Destroy the concept of Patent Hoarders that stifle motivation and innovation today, and forever in the future.

    • Re:

      Let me guess. You have less than 10 million net worth.

      • Re:

        Let me guess, you make most of your income from investments rather than working.

        • Re:

          I took a cheap shot. I am sorry. I am a plain index fund dollar cost averaging investor. Looking at dismay what these hedge funds and relentless interest rate cuts are doing to my fixed income portfolio I am going to be dependent on for retirement.

          The return on investment is so high and so lightly taxed and the return on labor/earning is so poor and so highly taxed, it is a toxic combination. Between 1890 and 1930, the return on investment was so high, people with inheritance lived in incredible luxury w

  • • Re:

      Mainly techniques like buying/selling assets with free money.

• They created an inflationary bubble with that $2.2T added to the economy

  We already had a bubble towards the end of Obama's last term. Rates should have been inching up then. [cnbc.com]

  They want to raise rates; they want to get back to normal. They have said they thought they would raise four times plus this year and I don’t think there’s any scenario in my mind that they’ll be able to do anything remotely like that

  Obama, Trump, and Biden wanted to ride high on low rates and prayed that other means of removing money would cover their ass. All three of them are on the hook for this ridiculous flood of money in the markets right now. Because cheap everything makes everyone feel good. The second someone made the American public behave and go back to a reasonable economy, everyone would have been shouting to run the person out on a rail. Voters love cheap shit and not having to think of the consequences. Politicians love giving the masses EXACTLY what they want to stay in office.

  • Re:

    The only problem with this theory, is that the Board of Governors at the Federal Reserve Bank is an independent entity, which is neither elected by the public, nor subject to following orders of the President.

    They're the ones that chose to keep monetary policy where it was. Not Obama. Not Trump. And not Biden.

    The most a President gets to do is choose to keep someone in their chair when their term is up, or tell them to go fly a kite and put someone else there. And both of those choices are contingent on

  • The economy is a competition for resources

    The economy is a competition for resources. A seller tries to get the most for his goods and services and a buyer tries to pay the least (exceptions: charitable giving [google.com] is about 2% of the economy [google.com]; taxes and government spending, about 30% of GDP [google.com]).

    Companies can do all sorts of ill-advised things to make money in the short term [brookings.edu], which blows up in the medium term. The government can run the printer [stlouisfed.org] to bail them out. But, all that's happened is that a group has seized more wealth by convincing the government to b

  • Re:

    The hard part is federal treasury board members are elected for and serve 14 year terms (which don't have to be sequential - Janet Yellen was not, for example). There are still two Obama chosen board members, Powell and Brainard, and both could easily serve into the next presidency if Joe doesn't get re-elected (I'm guessing not a chance in hell, especially if there's a recession - hoping the Jan 6 committee finds Trump guilty so we don't have to see his smug face in the next election, and if both are out,

  • • Go ahead and mod me down

      with your alts. You're still wrong. Are paid shills here, modding down anyone who dares turn against neoliberal orthodoxy? Or did we all just drink the koolaid?
      
      I feel like I'm trapped on an express elevator to hell with a bunch of lunatics. Here is the Fed literally saying they want slower job growth [nytimes.com] which translates to lower wages for workers. Did everyone here on/. suddenly become independently wealthy? Or is it just old farts who retired and they don't care how much the people still in the job marke

• Re:

  This has very little to do with extra monetary reserve in US. This is mostly about the fact that boomers are retiring. Globally. That means supply of money is crashing with them.

  Add to this massive rebuilding of the industrial plants across the West as coronavirus accelerated reshoring of industries as globalisation is receding, and those two alone lock in about the current inflation across the West. For at least half a decade, when we'll be done rebuilding most of the supply chains within the new, much sma

• Re:

  Yeah, coming out of the covid recession didn't cause a spike in demand, eh? How blind can you be? The rest of the world exited as well, thus the demand for oil increased. During covid, oil companies cut production. The supply chain problems also constricted supply of just about everything.

  Oh, but you put your finger on the one cause, which probably saved the U.S. economy from really tanking during Covid.

• No, it's commodity prices.

  No, commodity prices caused this problem. That's why most of the rest of the first world is having the same problems we are.

• Re:

  This makes no sense.

  You can loan money at whatever rate you want.

• Let the market dictate the interest rates and we will be better off for it.

  The market is free to dictate any interest rate it wants. Also maybe consider googling "Tragedy of Commons" before you suggest the free market should be a solution to economic problems. A large portion of the boom/bust cycles of the past were caused by... can you guess...? Deregulation.

  • Re:

    Yeah, unless the GP is under 14 years old - he should've already been aware of this...

  • Re:

    Boom/bust cycles aren't caused by deregulation.

    Boom/Bust cycles are caused by central banks.

    We have not had honest deregulation in my lifetime. We have a method of central banking and central state management called "deregulation" where the powers that be create new laws, loopholes and restrictions for old businesses and hand control over to their buddies running new businesses, and they label it "degulation".

    I've always profited from the boom-bust cycle for 30 years because it's so obvious, and because th

• Re:

  Your post made me ask a lot of questions about how exactly the Federal Reserve controls the rates.

  The Federal Reserve doesn't set the interest rate that banks charge. The banks decide that on the open market. Instead, the Federal Reserve influences interest rates by setting the rate that the government gives on loans to the banks, by buying back bonds (to reduce the amount of money in the system), and by selling government bonds (to increase the amount of money in the system). What "The Fed" announces in

• Re:

  You're wrong. Fed policy, properly executed, is a counterbalance that counteracts market forces that causes crashes (but admittedly takes advantage of imperfect fed policy). It should be a lot better executed though. Should have raised rates more in 2006/7 to cool down the real estate bubble that was obviously developing. Did a decent job after the crash. Was a bit slow to raise rates in 2016-2019, would have had more room to work in 2020 when the yield inversion curve happened (oh, and that other thing too

• Re:

  In the past, the way we got out of a recession was to force production upwards by starting a war and putting people to work in factories. That's what Russia is doing. Modern economies can stimulate by just raising government spending, but at least they do it by spending on infrastructure, not on war. But when you lower interest rates, you're just incentivizing people to spend, and businesses to invest in their companies. It's the least centrally managed way to do it. If you do nothing, you get a depres

  • Re:

    Reality check booms and busts were common before the Fed. They were also pretty shallow most times. In depth and duration.

    Great Depression happened on the Feds watch.

    Infrastructure spending did not fix the problem - only WWII did. FDR spend 1933 - 1939 spending on infrastructure, the depression continued.

    - My own read of it all is that, its unclear if fiscal stimulus works in the long run at all. It certainly works in the short term. Centralized control of monetary policy has been a FAILURE, we still have b

    • Re:

      I would have increased rates sooner because I didn't personally believe the inflation was temporary, and I'm a "feedback control system" guy by trade, so I like to keep my feedback gains high to make them responsive, but I understand why the Fed doesn't want to be too aggressive. They'd rather be late but really sure it's the right thing to do. In particular they didn't want to put the brakes on the economy while jobs numbers were still recovering. But in the grand scheme of things, the US has had a long

    • Re:

      Wrong.
      FDR was beating the depression before the war. The war obviously helped greatly but the data shows it was turning around BEFORE the war. This is just historical fact.

• Re:

  Anyone purposely taking an ARM loan after 2008 should know what they were signing up for. They went for a low monthly payment on something they couldn't afford, rather than right-sizing and buying the fixed percentage. Anyone in the mortgage business worth talking to would have warned them about an ARM loan post-2008.

  They put a wager that the Fed wouldn't raise rates, and they just rolled boxcars. Time to suck it up and refinance with a shitty fixed rate far higher than you could have locked 6 months ago

• re: ARM mortgages

  Do you happen to know any statistics on how many new home buyers over the last few years opted for those adjustable rate mortgages, though?

  I'm not saying you're right or wrong... I really just don't know? But I always thought those sounded unwise to bother with, unless you really knew you were in a financial position to pay the loan off in that window when rates were still going to be low on one.

  If you're basically expecting you'll be paying on your home for 15-30 years, why wouldn't you select a fixed rat

• Re:

  Specifically RE "mortgage rates" - so what? No, really, why does this actually matter to a serious homeowner? Remember, you can refinance into a lower interest rate loan for a modest fee at any time that the price makes sense to you -- you are not beholden to your initial rate forevermore.

  The higher rates will generally reduce the price of housing that people can generally afford across the board, but all that will do is generally suppress housing market prices and reduce the massive profit margins that new

• Re:

  Higher rates reduce demand more than they reduce supply. I'm all for cheap energy as well. A builder who has to pay 6% on money in order to build a house holds that loan for about six months. So it adds 3% to the cost of building. A borrower who takes a 30 year mortgage at 6% ends up paying 300% more.

  • Re:

    To answer both of your questions, remember what causes/d inflation: too much money chasing too few goods, and supply and demand causes prices to go up. In 2020, some people, a huge number actually, were suddenly out of work. So the government sent everyone free money, not just those people out of work. (HUGE mistake - should have fasttracked unemployment insurance payments or something). So while a lot of somebodies needed it to pay rent, another lot of somebodies now had more money for big flatscreens or s

  • Re:

    A borrower who takes a 30 year mortgage at 6% ends up paying 300% more.

    Well, not really, because the cost of real estate expands to whatever the market will bear. In other words low rates cause inflation in housing, so cheap mortgages don't actually help buyers (once prices settle out). Who does reap a windfall is whoever happens to own the property at the time rates are slashed, because now the same monthly payment equates to a larger sale price.

    • Re:

      Your statement does not conflict with mine. Housing has inflated due to the low rates. Those of us who had real estate holdings purchased during the last downturn made a giant windfall (Yes I sold my largest investment property at a good profit). However, the increased mortgage rates aren't going to necessarily drive home prices down very much because prices are sticky upward. We will see less units get built but also less demand. This will cause real estate prices to now rise at a rate less than infla

• Re:

  I think your logic breaks down with "End result of less production is that demand outstrips supply". By definition, less is being produced because there is less demand.

  While a free supply of oil would certainly reduce the cost of everything, it's not going to happen. The next best thing to reduce inflation is monetary policy. Trust us. When construction declines because it's harder to get a loan, contractors won't be rolling their trucks as much. Demand for fuel will decline, and prices will follow.

• Re:

  "expensive because of the cost of energy" this is by design, the only way the new green economy works, is for the US middle class to consume much less. They don't need anyone to "choose" green energy, They simply make "everything" involving fossil fuels to expensive for the masses. Sure it is painful "for others" but they are saving the planet(in their own minds).
  COVID restrictions were a wake up call. Here is how they create a green economy with out that pesky "choosing" problem.
  
  Government "is" force.

  • Re:

    "The pain is the point" every now and then they say the quiet part out loud. This is spot on nobody should be fooled. The goal of the political left in this country is rob from the middle class to pay for the excesses of the rich and the poor are their useful idiots.

    • • Re:

        The rich can afford those taxes. The middle class cannot. Therefore when the middle class person that has a house and is trying to grow their retirement plan they get hit by all the same stuff the rich get hit with. This hurts the middle class as more of their money will go as a percentage to taxes then the richer folks.

        The taxes never seem to exclude people under a certain threshold but rather just look at whatever assets you've managed to acquire. I'm a lot better off then a lot of people because I was sm

• Re:

  You have it backwards. Access to capital manipulates the demand side of the equation not the supply side. Construction occurs due to people's ability to pay for it, not the other way around.

  • Re:

    OK, let's assume what you're saying. The result, which you have to agree with, is that there will be fewer housing units in the country. Meaning that fewer people will have their own place to live. Many people will be forced to either live with their folks or rent. The price of rent will go up because of the high demand for a place to live. Higher rent = more homeless or living in poor conditions. Is that a good thing?

• • Re:

    The demand won't go down, it will be unaffordable to many people. You might as well have inflation at that point. What's the point of controlling inflation if not to preserve quality of life. Less people have homes, less people will have jobs, less people have cars.. how is that a good thing? Meanwhile things will be really expensive because only monopolies can exist since there is no capital to build competing factories.

    • Re:

      How else do you purpose we save the planet? We all need to stop driving our cars as of yesterday. California loves it's highest in the nation gas prices. We should all be riding bicycles and taking public transportation. Well, unless you are an elected official, then you should get driven around with armed security.

      Just wait until we have robo-taxies. They'll inflate the price of cars so high that only taxi companies and rich people will be able to afford them. Then, when they want to stop people from going

• Re:

  The Fed would settle for people getting motivated to actually look for work, which right now is plentiful. No more snowflakes demanding to be able to wait tables at Cheesecake Factory over Zoom.

  • What the heck are you talking about?

    I'm not joking when I say the goal is layoffs. We put an extra 2 million in the ground last year. And birth rates and immigration are way down. No shit Cheesecake Factory has to pay a bit more. Restaurants rely heavily on the very young and the old because both groups have subsidies (young can still borrow from mom and dad, old have SSI & Medicare) so they can pay them less.
    
    This is driving up wages, and the Fed No Likey. They want wages low. Your wages low. Because they think (incorrectly) that'll l

• Infrastructure spending now identifies as pork

  There's another way. Infrastructure spending.

  Well that used to be a good way but these days pretty much all infrastructure spending is just pork going to political allies and not doing anything for real infrastructure.

  We already had a TON of infrastructure spending in Covid relief bills, I've not seen a single bit of real world infrastructure improve as a result. But that money is sure gone...

  It's the same as how we are sending tens of billions rot Ukraine, except Ukraine as best might see 1/10 of that. T

  • Re:

    Do you think that a bill passed and signed 6 months ago for infrastructure spending to take place over 10 years is going to move the needle in only 6 months? They've barely had time to figure out what to fund with all that money, much less actually start moving dirt on any of it. It took two months just for the FAA to announce [house.gov] that they would be making $1B available in 2022 for airport terminal construction and renovation, out of the total of $5B appropriated for airport terminal construction and renovati

    • Re:

      Even what you're saying is overstating the impact of the infrastructure bill. The majority of the bill was just reallocating money from other spending bills. A large chunk of it was money previously allocated to infrastructure, now with new spending rules. Another chunk was unspent COVID relief funds. Only something like 1/4 of it is newly allocated money.

  • I've been hearing this since I was a kid

    and it's nonsense. People point to gov't waste as pork. It's like nobody ever worked in mega corporation. Then again lots of Americans work for small businesses (with shitty pay and benefits that sadly go with it unless you're the owner), so maybe you've never experineced this, but _every_ large organization has a ton of waste.
    
    Think about that worthless coworker. The one that never gets anything done and when he tries makes things worse. Think about how every department has one, two sometimes three or 4

• heheh I need to make some popcorn now - watching the leftists suddenly embrace supply side economics should be a hoot.

  Infrastructure spending only works when there is a return. government could spend a lot of money building canals and employing people to do it with teaspoons; but it would not be productive. Nobody needs a canal in 2022 and teaspoons are not an efficient way to go about making one.

  That is the problem. While there are few things like maintenance of existing roads, and better rural internet access; EV infrastructure, all already being funded and worked on its unclear what spending is 'really' needed and will pay dividends in the future. Reclassifying things like college tuition as 'infrastructure' as the left wants is the opposite of helpful here too, its investing a lot in people who mostly won't use it when we already have a huge part of the population that isn't WILLING to take a job digging ditches for any reasonable sum. Talk about sustainability issues, eventually we will run out of room to place immigrants so they can work while the last group of immigrants joins the welfare roles, once naturalized, to say nothing of The existing public. "shovel ready projects" just don't exist right now.

  Spending alone won't bring down inflation it will exacerbate it! AND taxing the wealthy to pay for it will ALSO make it worse because of the long period of easy money that has lead to massive balance sheet expansion of the very wealthy. If you go after that money with confiscatory taxes and spend it paying people to do things -- guess what you just increased the velocity of previously idle money, you get even more inflation!

  You and I might find a rare patch of agreement - in that I think the 1%ers were quite aware back to at least 2009 or so they were creating a situation where inflation was stalled by assets bubbles. Allowing them to gain control of the velocity of that money by sidelining it - effect traditional policy tools like progressive-taxation actually end up cause the less wealthy more pain not less. They were cynically aware of this and backed the policy that enabled it.

  • Re:

    I'd say bridges that don't randomly collapse is a return. The infrastructure is in a sorry state due to neglect. Look what happened just a few months ago.

    https://www.cbsnews.com/pittsb... [cbsnews.com]

    https://www.npr.org/2017/08/01... [npr.org]

    https://en.wikipedia.org/wiki/... [wikipedia.org]

    Looks like the USA is leading the pack on that list.

    • Re:

      Good luck - I don't disagree that we need to make some investments in highways and bridges. However you can't find people who want to work in the trades need to build them for any reasonable sum current and if you can, you can't get the supplies.

      I suppose you could toss enough dollars at it to 'make it happen' but turning a bunch of riveters into millionaires isnt a recipe for controlling inflation..

      The infrastructure projects needed here just don't exist - even if infrastructure projects exist. We did this

      • Re:

        So your solution is to let everything rot because it's simply too expensive (in your opinion) to pay people?

      • Re:

        The infrastructure projects needed here just don't exist

        The American Society of Civil Engineers thinks they do [infrastruc...rtcard.org] and I've seen little evidence to the contrary. While it's easy to be cynical whether government is up to it, there is at least some leverage for society to hold their feet to the fire.

  • The return is new cities

    which in turn means new jobs, new factories, more stuff produced. It also means lower housing prices (though the boomers, who gutted Social Security by letting the cap stay low, won't like that since they're too old to work and the only way they can retire is by fucking over Gen XMZ).
    
    The gov't spent the 60s, 70s and 80s building wealth for the working class with massive public works projects. Then along came the boomers to pull the ladder up behind them. We slashed funding to higher education in the 90s

    • Re:

      I doubt very much I'll see a pay cut - literally NEVER happened my entire career, in good economies or bad. What I won't see - already not seeing is pay raising keeping up with inflation.

      I plenty self aware; I also know that is my personal situation not everyone elses - but you know what I vote in my own self interest!

      I got mine and I want to keep it - I hope that does not also mean 'fuck you' but if it does well adapt or die; because you are just as happy to support policy that harmful to me and mine.

  • Re:

    The answer is simple: eliminate the minimum wage in order to bring prices down, and replace it with a universal basic income. People who want more than the UBI offers will continue to work or, knowing their living expenses are paid for, will start their own business or go back to school.

    Do we want to give people that kind of freedom or not?

    • Why stop there?

      bring back slavery. Give the slaves UBI.
      
      But Silvergun, won't their masters just take the money away?
      
      Hush little one. Go back to sleep. Don't think things through. Thinking things through is the mind killer.

  • Re:

    We recognize secondary education as infrastructure, why not tertiary education? That aside, this is about the government undoing the damage caused by helping colleges convert education into a pump-n-dump scam, and probably giving banks more money too.

    The policy is called "Build America", providing the infrastructure that 36 years of right-wing policies refused to build.

    Or, the government could keep it to pay-off federal debt, instead of treating debt like an endless Ponzi scheme.

  • re: building canals with teaspoons

    Trust me.... government has already been doing a whole LOT of this horribly inefficient stuff. Rand Paul just put out an economic plan that, if followed, could balance our budget in 5 years' time. It relies on government making a $298 billion spending cut in the first year and $16.1 trillion over the next 10 years relative to adjusted baseline estimates. Who knows if it's the "best" way to do things? But at least he published something concrete and is talking about it, unlike practically everyone else in po

• Re:

  I largely agree with the sentiment of your post. However, today, "infrastructure" is too vague. [strongtowns.org] I suggest we remove costly infrastructure which we don't need and can't afford; a great place to start is the interstate highway system. Donate it to the states and let them try to balance the books (keeping in mind that the states can't print money like the federal government can). The necessary roads will be funded through tolls & taxes, and the others can be dismantled (starting with "interstates" which g

• Re:

  The dual mandate of the feds is to MAXIMIZE EMPLOYMENT and STABILIZE PRICES. Sorry for shouting, but if they cause job losses they are violating the first part of that mandate. Their goal has to be to stabilize prices and cause as few layoffs as possible. Admitting they are intentionally causing layoffs violates their purpose.

  That said, abolish the Fed, anyone? It was a terrible system designed to maximize banker profits to begin with, so I'm all for starting over.

• • Re:

    robot overlords welcomed here