Congress has no power in regards to the Fed Funds rates. The only power they have is to revoke the Fed Reserve charter, something Ron Paul mentions on a regular basis. Or offer government run & subsidized lending. The hearings are just a show to appease the masses, in case it's obvious since nothing ever gets accomplished. Although Ron Paul has been waking up some people with his excellent criticism.
What is the Internet Productivity you so speak of? I think you'll find that most of the economic growth of the last 20 years has been to the productivity of borrowed dollars. The growth in the financial and consumer sectors had nothing to do with computers except to track all the new debt.
Unfortunately, I'm a pessimist about the U.S.'s economic future. (I've been a pessimist since Jan 1991 when I emigrated from the U.S. The current crisis is no surprise to me--the handwriting was on the wall 18 years ago.) Obviously, the U.S. is now in a "deflationary contraction" to quote the poll in this thread. However, when the trillions of dollars of government "loans" (ha ha ha) come home to roost, I expect hyper-inflation to kick in. I'm a (wise) old brick with lots of water under the bridge. I read endless ranting comments from 20-year-old know-it-alls, who...ho hum...bore me. Most of these "experts" have never set foot outside of the U.S., and they have no idea how the U.S. compares to other countries. Here's my advice. If the U.S. ever intends to fix itself, start with a major overhaul of the educational system. I've lived in Japan--its educational system is excellent, and Japan's economy reflects it. I currently live in the Czech Republic--its educational system is excellent, too, and the Czech Republic's economy is one of the strongest for post-Communist countries.
If we are in a deflationary contraction, which I believe we are, why is gold rising? How does the debt unwind? Looks to me like its still increasing at an evermore alarming rate.
If the U.S. ever intends to fix itself, start with a major overhaul of the educational system. --------------- What the heck is wrong with the educational system? Our teachers enjoy the best benefits for fewest days worked. Most if not all have master degrees. They have great pension plans and disability benefits and enjoy paying generous contributions to the union (cough cough Democratic party). Most teachers cannot get fired. Principals, superintendents and various boe officials make 6 figures. All of this and much more is "for the benefit of the children". Did you ever sit in on a child care meeting at school? There is a child advocate, a parent advocate (sometimes a parent too), a lawyer, a psychologist, a social worker, a couselor, a note taker, and various teachers. All this "for the benefit of the children". Can't beat all that for education now, can ya?
Excellent point thrifty, Perhaps we need to broaden our scope beyond tradional lines when thinking inflation/deflation. Right now the US has deflating asset groups and an inflating cost of living. All this has been building whilst people were standing in a recession arguing whether to have a recession or not. Well the same thing is happening all over again. This time people are discussing whether inflation is coming whilst the banking sector is absorbing huge parcels of credit through the very back door that they used to carry out their 'off book CDS' transactions. Sooner or later we probably all need to accept that there are no 'off-book' transactions any more. Sadly now everything being is accounted for and compensation for bad judgment is being handed out. This being the case we have all entered a new era and the pressures of inflation are building whether we can see them or not. We just need a broader line of reasoning. regards f9