FDR was inaugurated in March 1933 and died in April 1945. He is thus responsible for the 12 fiscal years from 1934 to 1945. During those years of depression and world war, according to OMB, federal spending averaged 19.35 percent of GDP. During Obamaâs four fiscal years, OMB estimates spending will average 24.13 percent of GDP. That is about 25 percent more than under FDR. ________________________________________________ This is fact....and think about if you adjusted the spending for inflation...... So, now you understand M1 and where we are going? Oil closed above 77 in one of the worst downturns in history...with reserves full. Why is oil at 77? Think about that. We have yet to turn the corner ...and when we do get things running quarter speed, what do you think oil will do? DUUUUHHHHH Oil is at 77 because of inflationary pressures...which have yet to take full effect. Oil futures for Dec 2010, near 90? Look them up. We are bleeding bad.....and all the fucking idiots in Washington can do is raise taxes on us in the top taxbracket, now also the low tax bracket. Im in the 38%....next year, I will be at 42%..... with no state tax....and all you who are in the top tax bracket with state as a kicker...your gona be near 50%. And for those who are in the lower tax brackets...get ready, cause its going up on you as well. So. lets see where M1 is next year.
FYI, banks are not lending to Business. The consumer is still getting loans to some degree. Most business, Manufactures are not getting loans for Expansion in RE....new builds or all that jazz. If they have a line of credit...most are still open.....some have had 1 plus prime added. The Commerical RE is the next blow.....Mid size banks are gona take a hit when this comes to. .....as it is starting to now. That will also effect small business loans. Banks are sitting on their reserves....because they are still scared.
Banks are not sitting on their reserves. They are trading like crazy... much more profitable than the prime plus 1 loan biz. They will not loan as long as they can speculatively trade with the govt covering their losses.
The game gets tough to keep playin if the Treasury auctions begin to fail. Biggest problem for the Fed is that excess government debt, including state and municipal debt, will go into accute crises if interest rates rise and at same time Fed promises to restrain inflation with interest rate rise and at same time failure to restrain inflation will precipitate interest rate rise. You are right that it is not all up to Fed.; clearly we are at a point where monetary policy cannot solve our problems. Worse problem is that President and Congress are harming growth prospects with one off spending programs that are actually making the problem worse and reducing the Feds options. I personally think we will face social unrest as severe austerity programs are forced into policy; becuase revenues will drop even if tax rates are raised and the cost of debt will rise. This will force choices between paying debt service or maintaining basic services. We will see dramatic municipal and sovereign bankruptcies and reorganizations that don't make anyone happy and that will make it even more difficult to create a context for growth that is the only real solution.
LOL. Since inflation has kicked prices up to be about 1500% of what they were in 1940, does that mean you are suggesting the real spend is 24.13*15 or about 360% of GDP?
Karl, what do you think 'money' is? Did you ever open your wallet and look at the cash? You will see that right on the top of each piece of linnen it says, "Federal Reserve Note." If this is not tradeable non interest bearing demand debt, then what is it?
You're talking about reserve notes, not money. Money is what a reserve note is, not the other way around. Gold is money. Oil is money. Time is money. (quite literally) Anything I am willing to accept in trade for services or goods is money.