Hanky Panky Bernanke may revamp bond buying program

[No Elephants]

Dec 12, 2:03 AM EST

Fed expected to revamp bond buying program

By MARTIN CRUTSINGER
AP Economics Writer

WSHINGTON (AP) -- The Federal Reserve is wrapping up 2012 the way it began the year, searching for ways to help a U.S. economy that is still struggling with high unemployment and sub-par growth.

The expectation is that the Fed will announce a revamped bond-buying plan at the conclusion of their second day of discussions on Wednesday. The Fed's policy statement will be followed by the release of a revised economic outlook and a news conference with Federal Reserve Chairman Ben Bernanke.

If the central bank does revamp its bond purchases, the goal would be to keep downward pressure on long-term interest rates and encouraged individuals and businesses to borrow and spend more.

The Fed's final meeting of the year is being held against the backdrop of the looming "fiscal cliff," the sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to reach an agreement this month to avert them.

http://hosted.ap.org/dynamic/stories/U/US_FEDERAL_RESERVE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-12-12-02-03-31



1. Could the media possibly beat the drum more or do anything more to make the fiscal cliff kabuki seem like the end of the world (which is, btw, due any minute, per Mayan legend) This feels even more dramatic than the media run up to the Iraq War. That alone would make me call bullshit on the "fiscal cliff." And it is working. We now have people begging for a compromise, ANY compromise. Which means, people are begging for cuts to social safety nets, once known as the third rail of American politics. No Republican President could have accomplished that, the proof being that Bush tried and failed miserably, not all that long ago.

2. You want people to spend? Give them jobs and more than subsistence level wages. We have spent a fortune doing anything but giving people jobs, like multiple extensions of unemployment benefits. Does it make any kind of practical sense to keep paying people for remaining idle, as opposed to paying them to do things the country needs to have done?

3. The plutocrats of both parties have done great at making people think that a larger federal payroll will cause the end of the world. I agree that federal spending needs to be reined in quite a bit, but not this way. For just one little thing, how much has Bernanke been getting to be this ineffective? Ditto Obama's economic team.

4. Speaking of subsistence level wages, more and more Americans have only subsistence level money, if that. At the same time as the money Americans have to spend on "extras" has been decreasing, the plutocrats have been getting a monopoly on farm lands all around the world. So, guess what is coming soon to a grocery store near you at prices you will not be able to afford. And guess what people will soon be going to war over.

And the right could not stop questioning why Gore got a peace prize, of all things.