Obamacare: An Alarming Checkup

OK, Obamacare. Up on the table. It’s time for your annual physical.

Three years old, eh? Well, with any luck, you’ll leave here with a clean bill of uh-oh. I can see one problem already. Have you seen these tax hikes?

Let’s see — five, 10, 15, 18 tax hikes in all. That hardly seems wise, considering the fragile health of the economy, but there they are.

There’s the tax on individuals who don’t purchase health insurance. That will cost $55 billion over the next decade. I also see a 40 percent excise tax on “Cadillac” health plans costing more than $10,200 for individuals and $27,500 for families. It’ll be $111 billion for that between 2018 and 2022. Several smaller ones, such as limiting the amount people can set aside in their flexible spending accounts: $4.5 billion there from 2011 to 2022.

It all adds up, Obamacare. It’s not healthy.

Hate to tell you this, but it gets worse. See this? That’s the number of people who are going to lose their current health insurance because of you. Not thousands, but 7 million, according to the Congressional Budget Office. This isn’t guesswork; it’s already happening.

Take Universal Orlando, which recentlyannounced that it won’t continue to cover its part-time workers. Why? Not because they’re coldhearted, but because they can’t afford it. Your prohibition of annual benefit limits beginning next year is making Universal’s health plans too expensive. The word is, this will affect about 500 Universal employees.

Or consider the American Veterinary Medical Association in Illinois. “[M]edical coverage will end for some 17,500 association members and thousands of their dependents at year’s end,” the group says in a news release. There are many more to come, from other employers. Ouch.

Wait. Obamacare, didn’t you say that nobody who liked his current plan would lose it? Yes. You promised it, in fact — repeatedly. I’d better note that in your chart.

You may be getting uncomfortable, but we’re not done yet. Over here, there’s another serious problem: You’re hurting hiring — and right at a time when the economy could use all the help it can get to reduce unemployment.

You don’t believe it? Look at the “Beige Book,” a report that the Federal Reserve publishes eight times a year detailing the economic activity in the Fed’s 12 regions. According to its most recent report: “Employers in several districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.”

“Affordable Care Act.” That’s you.

There’s more. It’s a good thing you’re sitting down. It turns out you’re making it more difficult to access Medicare services.

You can be as skeptical as you want, but this is right from the Congressional Budget Office and Medicare’s own trustees. They’ve shown what you don’t want to admit: You’re raiding Medicare to pay for other new programs.

Payment rates for Medicare Advantage: down $156 billion over the next decade. Home health services: down $66 billion. Hospice services: down $17 billion. The biggest one is hospital services, which you cut by $260 billion. What’s that? No, the cuts do not target medical institutions or organizations suspected of waste, fraud or abuse. Nice try.

Finally, I see that insurance premiums are going to skyrocket under you. It’s those coverage mandates you put in place; they’re the culprit. According to a congressional report by the House Energy and Commerce Committee, some premiums are set to rise in every state. Yes, every state, and not by small amounts. In many states, they’re primed to go up by more than 50 percent; in others, by more than 100 percent. It’s all as a result of changes you’ve introduced.

This despite your claim that your law would “cut the cost of a typical family’s premium by up to $2,500 a year.” That sure isn’t working out, is it?

You can pay the receptionist on your way out. No, I’m afraid we don’t accept that insurance plan anymore.

-Ed Feulner is president of the Heritage Foundation (heritage.org).

First appeared in The Washington Times.

Via: Heritage Foundation

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[VIDEOS] Fed's Yellen: Remain on track to raise rates this year if economy evolves as expected

Federal Reserve Chair Janet Yellen appeared before the House Financial Services Committee on Wednesday to deliver a monetary policy report.

In her prepared testimony released earlier, she said the U.S. has made progress, but labor market conditions are "not yet consistent" with maximum employment. Still, Yellen reiterated earlier comments that the Fed remains on track to raise rates this year—as long as the economy evolves as expected.

As the hearing began, Yellen was immediately put on the defensive. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, called for more oversight and accused the Fed of flouting the law by ignoring requests for key documents. "The Fed's refusal to cooperate in a congressional investigation threatens both its reputation and its credibility. The Fed is not above the law," he said.

The most heated exchange of the day came when Rep. Sean Duffy, R-Wis., accused the Fed and Yellen of willfully quashing that Congressional leak probe. You can read about that here.

Via: CNBC

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[VIDEO] Yellen urges Congress to be wary of Fed reforms

Federal Reserve Chairwoman Janet Yellen urged lawmakers to tread lightly when it comes to overhauling the central bank, warning that proposed changes could undermine its ability to support the economy.

In prepared testimony, Yellen will tout the Fed’s own efforts to boost its transparency as a way to discourage lawmakers from pushing their own proposals to bring the Fed under stricter oversight.

“Efforts to further increase transparency, no matter how well intentioned, must avoid unintended consequences that could undermine the Federal Reserve's ability to make policy in the long-run best interest of American families and businesses,” she said.

Yellen’s testimony Wednesday before the House Financial Services Committee will come one day after that panel held a hearing in which Republicans blasted the Fed as being unaccountable.

While Yellen will argue in her testimony that Fed tweaks could subject the central bank to political pressure and make it less effective, GOP lawmakers have argued the Fed holds up its political independence as a way to avoid scrutiny.

“The Fed’s clamor for independence is its underpinning for circumventing any sort of congressional accountability,” said Rep. Sean Duffy (R-Wis.) on Tuesday.

The relationship between the Fed and Republicans has been touchy ever since the Fed embarked on an unprecedented run of monetary stimulus following the recession. But the dynamic took a turn for the worse recently, as the Fed has refused to comply with demands for documents lawmakers seek in conjunction with a probe into a 2012 leak of sensitive Fed information.

The Financial Services panel went so far as to issue subpoenas for some documents, at which point the Fed refused to provide them, citing an ongoing criminal probe into the matter by the Department of Justice.

Via: The Hill

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Fed holds off on interest rate hike, downgrades economic forecast

The Federal Reserve downgraded its view of the U.S. labor market and economy on Wednesday in a policy statement that suggested the central bank may have to wait until at least the third quarter to begin raising interest rates.

The Fed's statement put in place a meeting-by-meeting approach on the timing of its first rate hike since June 2006, making such a decision solely dependent on incoming economic data.

The data, however, have been getting worse. Just hours before the Fed's statement, the U.S. government reported that first-quarter gross domestic product came in much weaker than expected.

The central bank acknowledged that growth had slowed in the winter months, a dimmer assessment of the economy than its view in March. And while it said the poor performance was in part due to transitory factors, it pointed to soft patches across the economy, in a sign it may have to hold off hiking rates until at least September.

"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the Fed said in its statement, following a two-day meeting of its policy-setting committee.

U.S. Treasury yields added to earlier gains and short-term interest-rate futures contracts dropped slightly after the Fed statement before paring the losses. Futures traders continue to bet the Fed will wait until December to raise rates, and give an October rate rise just a 46 percent chance, according to CME FedWatch.

Via: Reuters

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How President Obama Is Killing Jobs

Five years on and President Obama still refuses to assume responsibility for his woeful economic record. The buck stops with Republicans, other countries, changes in the weather, etc.—anywhere but the Oval Office. Of course, it’s not new having a chief executive who refuses to admit failure. What is rare is having a news media that does not hold the President accountable.

So let’s establish the record. At 2.2 percent annual growth, we are now witnessing the slowest economic recovery in generations. Even the Council on Foreign Relations says “the economic expansion following the 2008 recession has been the weakest of the post-World War II era.” This is true across a number of fronts: economic growth, housing prices, industrial production and capacity, etc.

Liberals cry that what we need is more government overspending, which without a trace of irony they call “stimulus.” In other words, they want us to ignore the fact that this Administration and the Federal Reserve have spent more on government-based economic “stimulus” than any other in America’s history, and with little to show.

Via: The Foundry

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Andrew Huszar: Confessions of a Quantitative Easer

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

Via: WSJ

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Examiner Editorial: Politically connected banks got bigger bailouts

It should come as no surprise that politically connected banks received larger bailout loans from the federal government during the 2007 financial crisis than banks that spent less on lobbying and campaign contributions. That's the conclusion of a new analysis by Prof. Benjamin Blau of Utah State University. His findings were based on data from the Federal Reserve and published by the Mercatus Center at George Mason University.

Blau noted it was “unlikely" that the Fed intended "to provide political favors to banks with the most political connections.” But whatever the motive, the pattern was stark. Banks that received bailout loans spent 72 times more on lobbying in the decade before the meltdown than banks that got no loans. Blau also found that 15 percent of the banks that received loans employed politically connected individuals. Only 1.5 percent of banks with politically connected employees got no loans.

There are three potential reasons for the skew, as Blau indicates:

1. The Fed may simply have had more information on the politically active banks, which would have made it easier to approve the loans.

2. The politically active banks were probably more likely to seek Fed loans.

3. Because of their political sophistication, these banks may have taken greater risks believing they would be rescued by the Fed if anything went wrong.

Following the 2007 crisis, Congress passed Dodd-Frank, a massive tome of a bill that Americans were told would prevent a repeat of the financial meltdown. In fact, Dodd-Frank all but guarantees that big banks stay big and small banks struggle to compete. “Dodd-Frank has not done enough to coral ‘too big to fail’ banks and, on balance, the act has made things worse, not better,” said Richard Fisher, president of the Federal Reserve Bank of Dallas.

Via: Washington Examiner

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Not so fast: The improving unemployment rate masks problems

WASHINGTON — The monthly unemployment rate holds almost mythical importance as a barometer for the health of the U.S. economy. But what if it’s not telling us what we thought?

Economists still view the monthly jobless rate – 7.2 percent in September – as an important guidepost, but many question whether it tells the whole story in today’s impaired labor market..

“I think it is exaggerating improvement,” said Scott Anderson, the chief economist for San Francisco-based Bank of the West. “It’s a muddy picture. No doubt about it.”

He’s not alone.

“Things kind of fell off a cliff in 2008, and then made very little improvement since then . . . except the unemployment numbers are telling this other story,” said Heidi Shierholz, a labor economist at the Economic Policy Institute, a left-leaning policy research organization.

The problem is that the Federal Reserve has held up the unemployment rate as a must-read, calling it the key sign of when the Fed will take its foot off the pedal of unconventional stimulus for the U.S. economy. Specifically, Chairman Ben Bernanke has said a 7 percent unemployment rate is a good marker for ending the support. In the latest report, for September, the jobless rate was just two hairs off that.

Yet while unemployment indicators seem to be improving, the data on employment itself is much more flat. Think of it as two lines, one sloping down on a decline and the other largely flat and straight. It’s why many are wary of the monthly unemployment rate.

Via: McClatchy

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Read more here: http://www.mcclatchydc.com/2013/10/24/206407/not-so-fast-the-improving-unemployment.html#storylink=cpy

Read more here: http://www.mcclatchydc.com/2013/10/24/206407/not-so-fast-the-improving-unemployment.html#storylink=cpy

How Obamacare Hurts You If You’re Looking for a Job

America is hurting for jobs. And if you’re looking for one, here’s how Obamacare is hurting you.

Obamacare is keeping businesses from hiring.

We already knew that many employers plan to cut workers’ hours to stay under the threshold of Obamacare mandates. This makes full-time jobs—much less full-time jobs with health benefits—harder to come by.

It’s more difficult to track the phantom jobs that just don’t exist today because of Obamacare’s strain on employers. But the latest report from the Federal Reserve confirms that they are all too real.

The Federal Reserve collects feedback from businesses and issues reports about the economic outlook. Its latest report directly links Obamacare to a lack of hiring. In fact, it cites Obamacare’s mandates and regulations 10 times.

Examples from the report (emphasis added):

“Many contacts also commented on reluctance to expand due to uncertainty surrounding the Affordable Care Act; some employers cut hours or employees.”

“A number of contacts voiced concern about the uncertainty surrounding future employer and employee healthcare costs.”

“There is anxiety about rising health insurance premiums [among manufacturers], which was attributed to the Affordable Care Act.”

This lines up with a recent Gallup survey reporting two-fifths of small business owners have held off on hiring because of Obamacare. As Heritage expert James Sherk summarizes: “For the next several years, Obamacare will also make it harder for workers who want jobs to find them.”

Via: The Foundry

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A Return to Keynes?

The nomination of Janet Yellen to become head of the Federal Reserve System has set off a flurry of media stories. Since she will be the first woman to occupy that position, we can only hope that this will not mean that any criticism of what she does will be attributed to sex bias or to a "war on women."

The Federal Reserve has become such a major player in the American economy that it needs far more scrutiny and criticism than it has received, regardless of who heads it.

Ms. Yellen, a former professor of economics at Berkeley, has openly proclaimed her views on economic policy, and those views deserve very careful scrutiny. She asks: "Will capitalist economies operate at full employment in the absence of routine intervention?" And she answers: "Certainly not."

Janet Yellen represents the Keynesian economics that once dominated economic theory and policy like a national religion -- until it encountered two things: Milton Friedman and the stagflation of the 1970s.

At the height of the Keynesian influence, it was widely believed that government policy-makers could choose a judicious trade-off between the inflation rate and the rate of unemployment. This trade-off was called the Phillips Curve, in honor of an economist at the London School of Economics.

Professor Milton Friedman of the University of Chicago attacked the Phillips Curve, both theoretically and empirically. When Professor Friedman received the Nobel Prize in economics -- the first of many to go to Chicago economists, who were the primary critics of Keynesian economics -- it seemed as if the idea of a trade-off between the inflation rate and the unemployment rate might be laid to rest.

Via: TownHall

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It's back with a vengeance: Private debt

As Washington is struggling with debt and all its political ramifications, American companies and consumers are embracing it, running up record amounts in 2013.

Whether it's corporate loans, all quality levels of bonds or simple consumer credit, the debt party is back on in the U.S., whether it's in the boardroom or the living room.

Amid the financial crisis of 2008, the U.S. went into what economists call a "debt deleveraging cycle"—akin to a credit hangover, where the party has ended and everyone there decides to quit drinking cold turkey.

Somebody has clearly turned the lights back on, though, and corporate and individual buying is soaring.

Consumer credit, for instance, surged past the $3 trillion mark in the second quarter of 2013 and continues on an upward trajectory, according to the most recent numbers from the Federal Reserve.

Via: CNBC

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Yellen's No. 1 theory: The badly paid don't work hard

IS SHE KIDDING WITH THIS COMMENT?? WE ARE IN DEEP TROUBLE!!!

President Barack Obama's choice of Janet Yellen to head the Federal Reserve was surely bolstered by the fact that her concerns about unemployment outweigh her concerns about inflation. It must have gratified him, then, to learn that her most famous theory attempts to pinpoint the specific cause behind unemployment.

Co-written with her husband, Nobel-winning economist George Akerlof, Yellen's most widely cited paper is borne out of a simple premise: "if people do not get what they think they deserve, they get angry." Yellen and Akerlof go on to argue that workers who receive less than what they perceive to be a fair wage will purposely work less hard as a way to take revenge on their employer. And the worse they are paid, the less hard they will work. Or, as the paper puts it, "workers proportionally withdraw effort as their actual wage falls short of their fair wage."

In the 1990 paper, the economists christen their theory "the fair wage-effort hypothesis," and go on to explain why the phenomenon could explain unemployment.

(Read more: Stocks shrug off Yellen, so I'm getting short: Pro)

But before that is elucidated, it is important to understand that under the admittedly "rudimentary model" used by these economists, unemployment is a bit of a riddle. After all, if the cost of hiring a worker is greater than the value that worker adds, then firms will hire no one.

Via: CNBC News

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Janet Yellen to be named Fed chair on Wednesday: White House

After months of speculation, it's official: Janet Yellen will be the next chair of the Federal Reserve, succeeding Ben Bernanke, the White House said late Tuesday.

President Obama will make the announcement on Wednesday at 3pm ET, the White House said. Both Janet Yellen and current Fed chair Ben Bernanke are expected to attend. That announcement will be right after the Fed releases the minutes from its last meeting, due out at 2pm ET.

Dow and S&P futures shot higher following the announcement, pointing to a higher open on Wall Street Wednesday.

What are futures doing now? Click here for the latest futures action.

"Markets are giving Yellen the thumbs up, counting on quantitative easing being maintained at full pace until further notice," Sean Callow, senior currency strategist at Westpac in Sydney, told Reuters after the announcement.

Andrew Harrer | Bloomberg | Getty Images

"It's a notable reaction given Yellen's nomination was so widely expected and that it comes at a time markets are already assuming the Federal Open Market Committee will not seriously consider a policy change at the October meeting given the fiscal standoff."

Yellen is seen as a dove on monetary policy, favoring strategies that bring down unemployment even at the risk of driving inflation higher. She has said she does not believe there is often conflict between the two Fed goals.

Via: CNBC

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$3.39T Quantitative Explosion: Fed Owns More Treasuries and MBS Than Publicly Held Debt Amassed From Washington Through Clinton

(CNSNews.com) - The same day that the Federal Reserve's Federal Open Market Committee announced last week that the Fed would continue to buy $40 billion in mortgage-backed securities (MBS) and $45 billion in U.S. Treasury securities per month, the Fed also released its latest weekly accounting sheet indicating that it had already accumulated more Treasuries and MBS than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton.

Since the beginning of September 2008, in fact, the Fed's ownership of Treasury securities and MBS has increased seven fold.

As of the close of business Thursday, the Fed said, it owned approximately $2,052,055,000,000 in U.S. Treasury securities and approximately $1,339,771,000,000 in mortgage-backed securities—for a combined total of about $3,391,826,000,000 in Treasury securities and MBS.

Via: CNS News

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No taper brings back talk of currency war

The Federal Reserve's shocking decision not to taper, despite broad expectations for a $10-20 billion reduction of its monthly asset purchases, has reignited talk of a global currency war.

Risk-on currencies like the Australian dollar, the euro and the British poundsoared in response, while the greenback dropped across the board. Now some analysts say the Fed's decision could prompt other central banks to devalue their currencies in an attempt to retain a competitive edge.

"We are on the verge [of a currency war]... especially if the Fed does not taper in October or December..." said Boris Schlossberg, MD of BK Asset Management.

(Read more: Where has the talk of currency wars gone?)

The other G10 countries will have to react and the only thing they can do is provide "even more accommodative policies in order to try and equalize all these currency differentials," he added.

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How will central banks react to the Fed?

Boris Schlossberg, Managing Director at BK Asset Management believes the rest of G10 central banks will have to enforce accommodative policies to combat the lack of Fed tapering.

Speculation over the onset of a global currency war first came to a head at the start of the year when dramatic falls in the Japanese yenprompted widespread criticism from other world economies, amid concerns the yen's weakness would put Japan's exporters at an unfair advantage. However, the rhetoric abated after Japan was given the go-ahead to pursue its radical policies at a G20 meeting in April.

But the Fed's decision on Thursday has reignited talk of a currency war, after thedollar index, which measures the greenback's value against other major currencies slid to levels not seen since February at 80.06 on Wednesday.

Risk-on currencies got a boost; the Australian dollar rallied above the $0.95 handle in Asia on Thursday, a high not seen since mid-June, while the sterling surged to around $1.61, its highest level since January, and the euro reached highs not seen since February of around $1.35.

Via: CNBC

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Summers Withdraws Name from Fed Consideration

Lawrence Summers, seen as President Barack Obama's first choice to replace Ben Bernake as chairman of the Federal Reserve, has taken his name out of the running, according to The Wall Street Journal. 

Summers, who served as treasury secretary under President Bill Clinton and as chairman of Obama's National Economic Council, called Obama Sunday to inform him of his decision. 

"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery," Summers wrote in a letter that followed Sunday's phone call, the Journal reported.

Summers' nomination has been opposed by liberals and women's groups over statements he has made while serving as president of Harvard University. He also has been opposed by Democratic members of the Senate Banking Committee who see him as a symbol of the failures of financial regulation.

On accepting Summers' withdrawal, Obama described him as "a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today," the Journal reported.
Via: Newsmax

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Fed Up Yet?

There are more important things than whether the next Federal Reserve chairman will be a man or a woman.

AS SUMMER BECOMES fall, we commence the 100th anniversary of that most glorious of all the violations of the United States Constitution, the Federal Reserve. The legislation that eventually emerged as the Federal Reserve Act was introduced in the House in August 1913 and was enacted and signed in December. The Fed itself started doing business in 1914. It would seem that this is a dandy time to pause in our national rush to ruin so as to reflect on what the first century of the Fed has wrought.

The chairman of the Joint Economic Committee in Congress, Representative Kevin Brady, has been nursing a bill to create a Centennial Monetary Commission. The idea would be to look at all the questions related to how the Federal Reserve System has, or has not, worked. The Texas Republican is a cheerful, sensible, moderate fellow who has put out word that he wants the commission to be “brutally bipartisan.” Wouldn’t you know but that the Commission is given but a 14 percent chance of getting out of Brady’s own committee and a 2 percent chance of becoming law.

Instead, the press has been chasing the question of whether the next chairman of the Fed ought to be a woman. The New York Timesassigned two reporters to write a story called “In Tug of War Over New Fed Leader, Some Gender Undertones.” They disclosed that the pro-woman camp was for the vice chairman of the Fed, Janet Yellen, while the pro-man camp was for a former treasury secretary, Lawrence Summers. This led the New York Sun to issue a bemused editorial called “The Female Dollar.”

So how is the nation that Reagan likened to a shining city on a hill going to get at the various issues surrounding the Fed? Particularly now that the Fed’s craftiest congressional critic, Ron Paul, has left Congress? The Texas libertarian-Republican had been nursing a measure to require an audit of the Fed, one that would look not only at its holdings but also at how it does business, including internationally. The bill actually passed the House on a bipartisan vote. But it died in that graveyard of reform, the Senate, where Ron Paul’s son, Rand Paul, is trying to carry on his dad’s effort.

Via: American Spectator

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U.S. 'DROWNING IN UNEMPLOYMENT,' SAYS FEDERAL RESERVE MEMBER

On Friday, Dallas Federal Reserve President Richard Fisher said the U.S. is "drowning in unemployment" and that the Fed's monetary easing was not the solution; certainty on taxes and regulation are what's needed to jump start hiring. 

Mr. Fisher's comments, delivered during a speech at the University of Texas at Dallas, highlighted the intractable nature of unemployment over the last few years and the folly of so-called "quantitative easing" by the Federal Reserve.

"A short-term fix to the fiscal cliff will do nothing but push out the envelope of indecision and we will continue to be plagued by high unemployment,"  Fisher said.  "We've had a recovery that is quite disappointing....We've never been here before so none of us know how we're going to navigate out of this particular quadrant of the liquidity pool in this ocean of money. And what I'm concerned about is that we may be painting ourselves into a corner," he said.

Mr. Fisher says the sluggish economy and unemployment picture are not the result of the Fed's lack of trying.  Indeed, as Reuters notes, the Fed has held interests rates at zero and bought up over $2.3 trillion in long-term securities to tamp down borrowing costs.  And yet, long-term unemployment remains at historic highs, with one in five American men now out of a job and record high 88,921,000 Americans no longer in the U.S. labor force. 

"We've done a lot," says Fisher. "It's not clear to me despite our theoretical ability to understand the tools very well, in practice, how we are going to get out of this."

Via: Breitbart

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Federal Reserve Chairman Ben Bernanke The greatest fraud in history

Too few Americans are prepared for what’s coming our way. We are facing a grave crisis that will have a dramatic effect on every American citizen, our national security and our very way of life. It is the asymmetrical warfare of financial terrorism, and the U.S. politicians, the central bankers, the global leaders are the terrorists. Sound harsh? Absolutely. Frightening? Although a healthy dose of fear is indeed warranted, it should not paralyze you, but compel you to act. Preparation is an effective antidote for fear.

But prepare for what? I’ll admit that I was never that good in Economics classes as I found them to be very boring. Even today, I find the talk of derivatives, toxic assets, off balance sheet loans, and so on to be complex and hard to follow. I suspect I’m not alone in thinking this way. It was not until gas reached almost $5.00 per gallon in 2008 and I realized that I had “more month than money” that I wanted to know everything I could about what’s going on in the financial world.

Having accepted that I’m only good at a few things, one being an investigator, I decided to spend as much time as possible investigating the who, what, when, where, why and how behind our current economic situation. Why are we going broke as a nation, and why are we, as Americans, running out of money before the end of the month while our standard of living declines as well?

What I found disturbed and alarmed me. The challenge now is to articulate my findings so everyone is able to understand given the complexity of the subject. That’s no reflection on you as a reader, but an indictment of our elected and appointed “leaders” who deliberately cover their greed and financial criminal activity by talking in a manner that only a select few can understand. However, one thing I understand is fraud, which is what is being perpetuated on everyone reading these words. Hopefully, I’ll be able to convey the urgency at hand, and plainly explain how we are being systematically robbed and looted, and the fallout that will result.

Via: Canada Free Press

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The Magnitude of the Mess We're In

Sometimes a few facts tell important stories. The American economy now is full of facts that tell stories that you really don't want, but need, to hear.

Where are we now?

Did you know that annual spending by the federal government now exceeds the 2007 level by about $1 trillion? With a slow economy, revenues are little changed. The result is an unprecedented string of federal budget deficits, $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and another $1.2 trillion on the way this year. The four-year increase in borrowing amounts to $55,000 per U.S. household.

The amount of debt is one thing. The burden of interest payments is another. The Treasury now has a preponderance of its debt issued in very short-term durations, to take advantage of low short-term interest rates. It must frequently refinance this debt which, when added to the current deficit, means Treasury must raise $4 trillion this year alone. So the debt burden will explode when interest rates go up.

The government has to get the money to finance its spending by taxing or borrowing. While it might be tempting to conclude that we can just tax upper-income people, did you know that the U.S. income tax system is already very progressive? The top 1% pay 37% of all income taxes and 50% pay none.

Did you know that, during the last fiscal year, around three-quarters of the deficit was financed by the Federal Reserve? Foreign governments accounted for most of the rest, as American citizens' and institutions' purchases and sales netted to about zero. The Fed now owns one in six dollars of the national debt, the largest percentage of GDP in history, larger than even at the end of World War II.

The Fed has effectively replaced the entire interbank money market and large segments of other markets with itself. It determines the interest rate by declaring what it will pay on reserve balances at the Fed without regard for the supply and demand of money. By replacing large decentralized markets with centralized control by a few government officials, the Fed is distorting incentives and interfering with price discovery with unintended economic consequences.

Via: Wall Street Journal

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