HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Topics » Economy & Education » Economy (Group) » The Keynesian Apotheosis ... » Reply #5

Response to Crewleader (Original post)

Sat Jun 21, 2014, 07:36 PM

5. Stockman's criticisms of the Fed are valid, but his assumptions and reasoning are flawed.

While Keynesian economics may be cited by the Federal Reserve as the rationale for its policy of easy credit, its activity is actually promoting "trickle down" economics for the benefit of the 1 percent.

As Stockman suggests in the article, easy credit is being used by those who already have some significant wealth as "free money" to "gamble" in the real estate and stock markets.

Keynes' postulated that governments should spend money on infrastructure to provide jobs and income for workers who would then be able to purchase goods and services (increase demand) and thereby grow the economy and create more jobs.

The Fed, by keeping interest rates artificially low, is actually damaging the economy, by cheating depositors out of a realistic return on their savings. Unemployed people cannot borrow and spend money when they have no income to repay the loans.

Moreover, bank depositors earn less on their savings than the current inflation rate so they lose principal.

Meanwhile, the wealthy get essentially "free" money to rig the stock market, buy out existing American companies and ship the jobs to China, and send the profits to tax havens such as the Cayman Islands.

Federal Reserve policy is NOT the solution to our economic problems. The Fed is a primary CAUSE of our current economic problems.

Reply to this post

Back to OP Alert abuse Link to post in-thread

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 6 replies Author Time Post
Crewleader Jun 2014 OP
enki23 Jun 2014 #1
jwirr Jun 2014 #2
Crewleader Jun 2014 #3
Crewleader Jun 2014 #4
LineNew Reply Stockman's criticisms of the Fed are valid, but his assumptions and reasoning are flawed.
AdHocSolver Jun 2014 #5
Crewleader Jun 2014 #6
Please login to view edit histories.