Keep 'em to just one sentence like Ricter does. Drive by slams are easier for those like Ricter and have become his normal post. So, heaven forbid that someone should do some research and provide an intelligent answer to share.
While you're at it...why don't you enlighten us to how the economy is doing "so well" with GDP numbers that barely register a pulse and massaged inflation numbers (I've seen your numerous John Williams references). So 4+ years of ZIRP currently (with promises of several more years), endless Fed intervention to deal with deficits and an economy that barely has a pulse (outside of the FIRE sector and the incessant asset reflation schemes). Come on Piezoe, you're supposed to be the champion for the little guy, not a cheerleader for asset reflation schemes masking as a "healthy economy".
His one word riddles remind me of the famous quote: "Better to remain silent and be thought a fool than to speak out and remove all doubt."
I have a little time right now. Reached my target already in the S&P this am. [edit: when I started this post it was mid morning now it's late afternoon.] That's a perfectly reasonable question you've asked. I am not an economist, though I have studied economics and may be able to contribute something that makes sense. First let me state that I believe Keynes was correct and has been proven so. In my opinion, Friedman and the Chicago School and Hayek and the Austrian School economists have been discredited, and their ideas are incorrect, though certainly not entirely so. Keynes has been criticized on a number of grounds. One such criticism is that he was not successful in formalizing his theories in rigorous mathematical models. [Others later tried to!] Because I don't believe economics is a science, I find these criticisms absurd. I am firmly in the Soros camp. I believe that neither the "Efficient Markets Theorem" nor "Market Equilibrium Theory" correctly describe real markets. Real markets don't go spontaneously toward equilibrium. Real markets are virtually always distorted. Real markets are not efficient, at least not in the textbook sense. I bring this up, because it is market equilibrium theory that the "free market" advocates such as Greenspan, Friedman, etc. have been so disastrously wrong about. When markets are left alone without government interference they don't self-correct harmlessly! Instead, they move very far from equilibrium and then crash and move far from equilibrium in the opposite direction, creating economic chaos! So yes, of course, markets left alone will "self-correct." But the result isn't pretty. If you're interested in this topic, then I can't recommend too highly "The Soros Lectures at the Central European University." So back to QE and how is it helping with the recovery. QE is easing, depressing interest rates or keeping them from rising, by buying bonds using newly created money, though earnings from Fed assets might also be used. Bond buying with created money expands the Fed's balance sheet. This has the effect, several months down the road, of expanding the amount of money circulating in the economy, while holding interest rates down. The opposite effects occur when the Fed shrinks its balance sheet by selling bonds. The Fed may also cause the yield curve to adjust by choosing which maturities to buy, and which to sell. For example, in operation twist the fed sold short term bonds and bought long bonds. As mortgage rates are tied to long bond interest, operation twist had the effect of reducing mortgage rates, or holding them at low levels. So these are just some of the many operations the Fed can engage in to control long and short term interest rates, and the "ease" with which money can be borrowed. QE is part of a Keynesian approach the U.S. Treasury is taking to assist recovery from the deepest U.S. recession and worst financial crisis since the great depression of the 1930's. Money is being pumped into the economy to create jobs, build infrastructure, and provide unemployment compensation. Considering that the U.S. was already running sizable deficits before the crisis hit, additional money needed to "stimulate the economy," according to Keynesian principles, has to be borrowed. But it was desirable that interest rates not be pushed up in a time of recession, as they normally would be in the face of greatly increased Treasury borrowing. Thus the Fed embarked, rather cleverly in my opinion, on its various rounds of Qualitative Easing by which means money could be provided to the Treasury without interest rates rising. Normally such an expansion of money supply circulating in the economy would cause unacceptable inflation. Because of the recession and high unemployment, however, real inflation, though by no means as insignificant as the government's figures indicate, has been held in check. All in all, I would say, a rather brilliant job of juggling by the U.S. central bank in the face of a serious economic disruption. Now here is where to read about Keynes and Keynesian economics. This article is beautifully written, and as with the Soros Lectures, I can't recommend it too highly. (I don't think I have ever read a better written article in Wikipedia!) http://en.wikipedia.org/wiki/John_Maynard_Keynes At the risk of losing you because I really am rambling here, beyond what I had intended when I started this, let's explore further. And I ask you to accept for the moment that Keynes, Soros, Galbraith, Samuelson, Bernanke, Krugman, Blinder, Romer, Stiglitz, etc., are all correct, and that Hayek, Friedman, von Mises, Greenspan, etc., are all wrong. Allow me then please to make a few observations. First and most importantly, if modern equilibrium theory is correct, then the Hayek Friedman group has a chance of being right; if it is wrong, then all the theories of these "free market" economists must be looked at askance. (And I use here the classical definition, not mine, of free markets.) It would be better if instead of "free markets" the French term laissez faire was used, because that's what is usually meant by "free markets". Clearly, equilibrium theory is wrong! Numerous real life examples prove it to be. To name just two: The Great Depression and the 2008 Financial Crisis. Markets don't spontaneously correct when they get out of whack and then move back harmlessly toward balance. Instead, they get even more out of whack. In fact they tend to accelerate their whackiness and then overcorrect, sometimes violently, and often not harmlessly. When Greenspan recognized "irrational exuberance" he was actually observing an acceleration of market whackiness. He was waiting patiently for a "harmless" self-correction. When told about liar loans, he was being informed of extreme market whackiness, and this time the "self-correction" was much worse, and emergency intervention was needed. The free market economists put their faith in equilibrium theory. If equilibrium theory is wrong, and I say it is, then the free market economists are wrong, and therefore government regulation is essential to orderly markets. Naturally, there are good regulations and bad regulations. Now lets look at what can happen when these incorrect economic theories hold sway. We have three very good, fairly recent examples: The Reagan and two Bush presidencies. Look at this chart from the St. Louis Fed. Reagan was in office 1981-1989, Bush I 1989-93, Clinton 1993-2001,G.W. Bush 2001-2009, Obama 2009- Those Reagan and Bush years were years in which "supply side" laissez faire economics held sway. The deficits look all the world like a recession with Keynesian economics being applied, i.e. major deficits. But ironically there were only mild recessions during those presidencies, and much of the time the economy boomed. Mostly boom years in other words; yet big deficits! It is as though the economy was 180 degrees out of phase with what Keynes would have thought we should be doing. What on earth is going on during those Reagan Bush periods? Apparently the increased government spending was on top of a healthy economy. Tax rates were cut due to belief in supply-side economics --the opposite of what Keynes advocated during boom times-- and military and war spending ballooned. The economy looked exceptionally healthy until one realized that it was being "goosed" by massive debt and government spending. These are periods in which Keynes would have recommended either decreasing government outlays, raising tax rates, or both. We did none of these things. WE DID THE EXACT OPPOSITE. Now look at the Clinton years. The economy thrived and Clinton raised taxes on top earners and made modest spending cuts. The deficit graph looks more like what it should look like if Keynesian economics are being followed. We are currently emerging from a deep recession. But, in stark contrast to the Reagan-Bush years, the large deficits are now in sync with what Keynes would have advocated. When full employment returns, and it will if we stay the course -- more deficit spending might be needed-- then it will be time to start shrinking the Fed balance sheet, raise interest rates, reduce federal spending and raise tax rates. (I don't see the highly focused, and very modest tax rate increases that have been proposed as being at all harmful to the recovery). If we do those things, and I am confident we will, we will be just fine. As long as Bernanke, or someone of similar economic philosophy, is still in charge at the Fed and the council of economic advisers does not change significantly, we should do all the right things once good times return. Our deficits will return to the horizontal line where they should have been during the Reagan-Bush boom years. We have already fixed one thing. We're no longer subscribing to failed economic theory, though the tea party folks are fusing about it. Going forward we will have to fix two more things: medical and military spending. To restore confidence in the dollar, we need to develop, as rapidly as possible, a comprehensive, long range plan to do just that. We do that, and we avoid getting entangled in any more absurd wars, and we'll be just fine. And dollar will remain the "go to" currency for the world. The danger our country faces at this very moment is coming from that faction that does not understand the Keynesian economic course we are embarked on and might even succeed in throwing a monkey wrench into the works. We must not let that happen.
I'll give you an A for baffle them with bullshit distraction, otherwise known as the red herring logical fallacy. I find it rather odd that you would go to such effort as the above but ignore outright my 2 simple follow up questions to your rather undeveloped assertions that people " don't understand that government finances don't have to operate the way their checking account does. ". If you REALLY believe what you claim and think you are correct in this very basic salient differentiation. WHY ARE YOU RUNNING AWAY FROM EXPLAINING IT? Besides you state it so flippantly as to assume it's an a priori fact.
He also flippantly stated that the economy is in a "nice recovery", even with a negative GDP print in the latest quarter.