srg

You cannot tell the difference between a preposition and an adverb, explaining economics may be a lost cause.

bikinkawboy Loc: north central Missouri

One of my sons and my best friend are on opposite sides of the political fence as I am. I keep telling my son to keep in mind that regardless of which party they are affiliated with, ultimately politicians are looking out for only one person, themselves.

Down through the years, one thing has been constant; it’s always the other guy’s fault or the other party’s fault. The guy or party in power is always innocent and they can’t keep their campaign promises because of the mess the previous person or party left for them to clean up. And when those innocent people are voted out of office, they suddenly become guilty and are accused of doing the same thing they accused their previous politician-party of.

This is human nature at its lowest. That’s how it has always been and how it always will be.

Anyone who thinks that politicians put other people’s needs before their own wants and desires is a fool. Which includes my son and friend.

pendennis

As was my own experience, except that I got a blended major of finance/economics, concentrating on investments and macro.

During my entire college career, I didn't have single professor who didn't think the Fed should be dissolved. And their opinions remain valid today.

The Executive Branch has allowed the Fed to act as a central bank, which is really counter to their charter. They're not in the mold of The Bank of England, Banque de France, or Deutsche Bank. They never act quickly enough, and their economists must be using abaci to forecast. Their prime rate adjustments are usually too little/much, too late. They live to "fight inflation" but they're a bucket brigade, when in reality, they need to be a modern fire department.

They seem always to dabble around the edges, but can never come out and tell the Executive Branch, that it must stop spending over and above revenue. As long as the Executive Branch has the power to appoint the Fed's chair, we will have bad money policy. The Congress and the Executive branch will then have to make some really tough decisions.

The Fed is making financial market decisions despite being a non-financial markets entity. Disband the Fed; move the debenture function back into the Treasury Department, and let the commercial banks determine their own "prime rates".

rlv567 Loc: Baguio City, Philippines

Absolutely - except for one thing. It didn't take decades (though the tendency has been there) to run up the incredible national debt - it has occurred in just the last few years, using "money" that has no backing or value, nothing more than an entry on a computer.

Unfortunately, we are in for not just a recession, but a major depression, probably considerably worse than 1929. The idiot "nice government men" in the pointy toed shoes, and the "quantitative easing" and the "plunge protection team" can not do anything to prevent it. They are, in fact, causing it, in conjunction with the spend money we don't have and never will, crowd. We are very near the point where the INTEREST on the national debt will be more than there is any possibility of paying. That's one reason they have been so reluctant to boost interest rates. And they're caught between causing runaway inflation - like Germany, where people needed a wheelbarrow to carry enough money to buy a loaf of bread - and the total collapse of Wall Street. Their choice always will remain to help their friends in Wall Street!

Again unfortunately, those currently in power - and with the loudest voices - are espousing (demanding) nothing short of communist/socialist measures - and some unabashedly admit this! The dismal truth is, however, their way has been tried many times, only to fail, while causing untold misery for the general populace. The sysyphean attempts never have succeeded, and unless they are the ones in power, the rock rolls right over them - time and again!!!

The very drastic conclusion is - we may already be at a point of no return; if not, very close to it. And regardless, there IS a lot of misery ahead!!!

Loren - in Beautiful Baguio City

jeep_daddy Loc: Prescott AZ

My guess is that if they raise interest, you won't buy as much because you can't afford it now. If there are less purchases, that means there's more product, more product and less buying is the same as supply and demand. When the demand is high, the supply goes down and things become more expensive. When the demand goes down, there is a larger supply and therefore the price will decrease to get rid of all the stuff in the warehouses. I don't know if this works though. I know that every time we have a lefty in the white house, we have problems like this. Usually unemployment is really high but now it seems low. I do think that stat is skewed because many people have not returned to work since Covid. But many may return to work now that inflation is high and the free money has run out.

Minitman Loc: Centreville, Virginia

Given the traditional definition of recession: two consecutive quarters of negative growth, unless there is a dramatic turnaround in the next 12 days, we'll find out we're already in one. The good news, that data won't be out for several weeks.

Paladin48 Loc: Orlando

FACT: The "Economists" have predicted 14 (Fourteen) of the last 3 (Three) recessions.
Anyone who half-way paid attention to economics in High School can see what is happening here. They want to blow up our economy and crash our government system. It is intentional.
Buckle Up and save your scraps of tin foil and dryer lint ... it's gonna get nasty

rrozema Loc: Sacramento, California

Good answer

bhanusa Loc: Maui, Hawaii

When I told my daughter who lives in New Zealand that I paid $7.99 for a gallon of milk, she came back with this:

In comparison to the money thing. It's $7 for half-gallon of milk here - and it's now $13 for a gallon petrol!

mikenolan Loc: Lincoln Nebraska

These Keynsian economists will destroy the economy trying to fix it.

rlv567 Loc: Baguio City, Philippines

True - it IS intentional.

Loren - in Beautiful Baguio City

BrianFlaherty Loc: Wilseyville, CA

Answer to your question (in FOUR letters!): SCAM. . .The FED is just selling you a "pig in a poke!" This concept was created (and, amplified) during the Reagan Years. . .It is/was thoroughly debunked in any high school Economics class(which I had the pleasure of teaching!). Whoops! I forgot! They do not teach econ or civics or music or History or any of those non-athletically related-courses any more!

pendennis

The irony here, is that Maynard Keynes more or less debunked his own aggregate demand theory after FDR proved without a doubt, that it didn't work. Yet, today, you still have "economists" like Krugman who still espouse an unworkable concept.

It all comes down to the concept, that Keynesian theories work; it's just that the right people haven't come along yet to make it happen.

edrobinsonjr Loc: Boise, Idaho

Would someone please explain why the Fed's raising interest rates has an effect on everyone?

Surely the Fed is not the sole source of funds - are they?

Ed

robertjerl Loc: Corona, California

The US hasn't been debt free since 1837 but it was, except for war years, relatively small until after WW II when it started getting larger faster. Then in my lifetime (1945) it really started to trend up. During the last several years it accelerated greatly, but it has always been there. The 1998-2001 fiscal years we had no deficit. As of 2001 the national debt was $5.8 trillion and now it is over $30.5 trillion.

It is just too tempting to Congress (and others in government, but it doesn't happen if Congress doesn't vote it) to spend money on pet projects and things designed to "buy" votes to preserve the most important jobs in the universe - THEIR OWN!

It can't keep up forever, one day a really large flock of huge chickens will come home to roost.