Comments for How the Fed Boosts the Economy: Lessons for George Will at http://www.cepr.net , comment 1 to 8 out of 8 comments http://www.cepr.net Thu, 23 May 2013 10:09:02 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18838 So other countries in worse shape are going to sit idly by while we devalue our currency? The people I know that have been able to refinance are fairly wealthy and I do not see their spending patterns changing much after doing a refi from 5.25% to 4.5%. Many of them had to bring cash to closing in order to get their loan to value ratios down. And many also shortened their loan terms from 30 to 15 years which resulted in higher monthly payments. Not sure how this is going to stimulate the economy much. Of course most of those that could refi have done so already. So unless rates go below 3.5% for 30 year mortgages I am not sure what Ben hopes to accomplish. Those that could really use the help of a refi cannot qualify due to being underwater and/or having inadequate income. Many of these folks have very hefty second mortgages. The smart ones have already walked away from their mortgage(s). Many more are sure to follow. And lastly I look at my mom and her friends (in their 70s). They are not going back into the stock market after being traumatized in 2008-2009. Much of their money is in CDs. They are cutting back spending as their interest income is reduced every time they roll over their CDs. I wish Ben luck. His only hope is that housing prices increase rapidly and many of the underwater buyers that have hung onto their homes are able to refi in the near term. I find that a very unlikely scenario. Obama blew it. He had a chance to restructure our banking system in 2009, but instead he listened to idiots like Summers and Geithner. We will be paying for his lack of courage for a long, long time. - john Thu, 13 Sep 2012 13:47:09 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18835 I understand Will knows a lot about baseball. He knows very little about economics. So of course he makes his living with punditry about economics, etc. - Chris Thu, 13 Sep 2012 12:50:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18830 It is very simple logically: If the best way to maintain high employment was through price stability, then the fed would have a single mandate of price stability. There's a reason for the dual mandate. - winstongator Thu, 13 Sep 2012 10:51:12 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18828 If the Fed could actually maintain price stability there might be something in Will's claim. But in the 70's and 80's inflation skyrocketed while the Fed is generally credited with causing several recessions and unemployment as high as 10.8% (not exceeded in the current recession). This time there was no inflation to begin with and the Fed made the greatest effort in history to expand the money supply and lower interest rates, but it still did not prevent unemployment from going over 10%. And after two or more rounds of QE unemployment is still over 8%. Apparently there is no evidence that would convince some economists that the Fed does not control the economy (both inflation and employment). They learned this as students and that was the end of it. - skeptonomist Thu, 13 Sep 2012 09:32:16 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18825 What exactly is the mechanism for why QE will affect the trade deficit? Yes yes, weaker dollar, how exactly will it make the dollar weaker? The exact same amount of net financial assets exist after QE.. - joe Thu, 13 Sep 2012 07:48:53 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18819 Following neoclassical macroeconomics by any name, Mr. Will means that achieving price stability now leads to lower unemployment [i][b]in the long run[/b][/i]. Of course in the long run... - Jeffrey Stewart Thu, 13 Sep 2012 04:51:33 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18815 George Will advocating austerianism via lower inflation over less unemployment under current circumstances is like the miser who died from starvation when he found out that food costs money. - David Thu, 13 Sep 2012 02:52:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/how-the-fed-boosts-the-economy-lessons-for-george-will#comment-18812 George Will advocating austerianism via less inflation over more employment under current conditions is like a hypochondriac driving a car who is so worried about getting bad gas mileage from driving faster, he slows down so much he never arrives at the destination. - Last Mover Thu, 13 Sep 2012 01:06:00 +0100