Dear Chairman Bernanke
By Carl
I have an idea that might help ease the transition from the “Quantitative Easing” (QE) policy of the Fed over the past five years to a more free market oriented capital market. More after the break:
OK, so here’s my thought: Methadone.
Methadone, in that you’d substitute one fix for a more controllable, sustainable fix that would give the addicts a chance to wean themselves off the socialist crutch you’ve been providing them.
My proposal is simple and will even cut the debt you’re piling up in half. Give the people $45 billion a month. $150 bucks in tax free spending each month. If you’d like, you can add the string, as you do for the banks, that it be used to pay down existing debt.
You have a $2,000 mortgage payment? It’s now $1,850. Let’s take the pressure off our poor middle class. You have payday loans that you roll over every month because you need to buy food? We’ll pay for a week’s worth of groceries.
See, capitalism does not work – and never has – on a trickle down basis. It works on a trickle up basis. I buy a thing in the store. The shopkeeper pays the manufacturer, and keeps a bit for him or herself. The manufacturer pays his workers and suppliers, and so on.
Giving it to banks only freezes the money at the upper echelons of the economy and it does not get spent or invested. Period. Programs like HAMP have only been used by banks to cherry pick mortgages for refinancing, often given to people who can easily afford their current mortgages, and denying almost 95% of requests. Basically, the rich are getting richer.
As usual.
Give the money to we, the people, and I can promise that within a year, the economy will be set to rights.
(Cross-posted at Simply Left Behind.)
I have an idea that might help ease the transition from the “Quantitative Easing” (QE) policy of the Fed over the past five years to a more free market oriented capital market. More after the break:
Here in the U.S., one thing is clear: The market is so accustomed to stimulus from QE that it is poised to retrench if it is cut off. And it is unduly fearful that the Fed would be short-sighted enough to suddenly turn off the spigot.
The market is such an extreme QE junkie that, perversely, whenever there's talk about the economy improving, stocks go down. Clearly, the market is afraid that the Fed would be cruel enough to put it on cold turkey.
Investors who react this way aren't thinking about a sound economy in which QE wouldn't be needed any more than a heroin addict thinks in terms of life without a fix.
OK, so here’s my thought: Methadone.
Methadone, in that you’d substitute one fix for a more controllable, sustainable fix that would give the addicts a chance to wean themselves off the socialist crutch you’ve been providing them.
My proposal is simple and will even cut the debt you’re piling up in half. Give the people $45 billion a month. $150 bucks in tax free spending each month. If you’d like, you can add the string, as you do for the banks, that it be used to pay down existing debt.
You have a $2,000 mortgage payment? It’s now $1,850. Let’s take the pressure off our poor middle class. You have payday loans that you roll over every month because you need to buy food? We’ll pay for a week’s worth of groceries.
See, capitalism does not work – and never has – on a trickle down basis. It works on a trickle up basis. I buy a thing in the store. The shopkeeper pays the manufacturer, and keeps a bit for him or herself. The manufacturer pays his workers and suppliers, and so on.
Giving it to banks only freezes the money at the upper echelons of the economy and it does not get spent or invested. Period. Programs like HAMP have only been used by banks to cherry pick mortgages for refinancing, often given to people who can easily afford their current mortgages, and denying almost 95% of requests. Basically, the rich are getting richer.
As usual.
Give the money to we, the people, and I can promise that within a year, the economy will be set to rights.
(Cross-posted at Simply Left Behind.)
posted by Carl at
12:00 PM
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