This post becomes hilarious once it's realized that you earlier tried to invoke probability to argue against the NYT Opinion regarding which Party did a better job with the economy. Actually as I read your post above my giggling has become uncontrollable. I especially liked this: "and the SCOTUS would have been forced to hear that evidence (focusing mass public attention on it) if they had not refused to hear the case..." Have you considered Comedy as a career. You're talented.
Disagree. You see the same pattern in history of the Fed raising interest rates sharply before a recession. The Fed could raise rates slowly but it always insists on raising rates too fast, which shocks the system. You'd think they'd have learned by now, unless they were doing this intentionally. 2018 is a good example. After 8 years of zero rates, the Fed raised rates to over 2% in two years, which almost triggered a bear market and a recession.Why didn't they just raise rates by 0.25% per year instead of 1% a year?
From jan 2016 to jan 2018 (two years) there were two raises of 25 basis points each. That's very gradual; Than in 2018 there were two less gradual raises, one from 1 to 1.75 , and than a second, much later in the year, to 2.5. These were less gradual but well spaced out. The pace of hikes is economy dependent and always subject to criticism. The question is what causes a recession? Is it interest rate hikes?, or is it something else?, a viral pandemic. for example. Regardless, when the economy turns, the fed must react. My personal opinion, with the advantage of hindsight, is that in 2018 the fed should have hiked more gradually with one 50 basis point hike followed later by an additional 25 basis point hike. Regardless, they would have had to put the brakes on their bond selling program once the pandemic hit.
From what I recall, the Fed rate has never been at zero. The lowest it has been is 0.25%. So there is ALWAYS interest on the money the Fed loans to the government. How can the Government ever get debt-free if the Fed never stops charging interest on the money it lends to the government? Where does the money to pay down that debt come from? Simple math I cannot understand.
The Fed should have increased rates more gradually. 0.25% a year would have been fine. In fact, without Trump's interference, the Fed might have tried to raise rates well past 2%. The Fed is private institution that tends to apply a lot of subjectivity in its decisions.
The Fed prints money to buy bonds but does not print money to pay the interest. That has to come through taxation. The Fed supposedly returns most of the interest payments to the treasury, but the money still has to come from taxpayers. Why the Fed doesn't just print the interest is illogical to me, unless the goal of the Fed is to increase tax revenue and allow the government to redistribute wealth.
No, it is NOT private.* The government is thoroughly in control, however representatives from private sector banking participate in Fed, Regional Branch Bank management. The private sector banks also have minor representation on the Fed's Board of Governors. Treasury and the Fed are different parts of the same overall operation, with the Fed made, by statute, to look like it is independent of the Treasury. In theory, the fed may operate independent of the Treasury; in practice the two agencies work hand in glove together on a daily basis. If you were to view the consolidated books of the Treasury and Fed you would, assuming you are well versed in their accounting procedures, recognize that they are different parts of the same overall operation. With regard to ownership, the deciding factor is always profit flow.. Do fed profits flow to private sector owners? -- there are in fact none for the profits to flow to! Or do fed profits flow to the government? All fed net profits flow directly to the U.S. Treasury! Regarding the subjective nature of fed decisions, a subjective component is, of course, unavoidable when divining the future, which the fed is continually called upon to do.. ___________________ *to see what the Fed has to say about ownership try FederalReserve.gov . The Fed will say that "no one owns the fed," and that the Branch banks have a hybrid structure somewhat reminiscent of a private bank. They have .org internet addresses. The mistaken idea that the fed is a private institution comes from the history of U.S. banking. The structure of the fed changed drastically with the banking laws of the 1930's and the advent of the FOMC. As a creature of Congress, today's fed, as I mentioned, is really just another part of the overall Treasury-fed operation. (Don't be confused by the fact that fed's private sector, member banks are required to buy fed shares which pay a fixed dividend set by law, This is an artifact of a much older structure. Fed "shares" can't be traded on the open market and do not impart the rights of ownership characteristic of marketable equity shares.)
This is actually incorrect. You can be forgiven, however, for confusing government and personal finances. Nearly everyone does it.
Without having to read 5 pages of posts... lets look at the bigger picture. Since Eisenhower, there have been 7 R's and 6 D's. Pretty much balanced. Maybe it's just America.
LOL I forget I had this chart stuck away in a dark corner somewhere in TradeStation - it is a comparison of (MAGA) Point Bridge GOP Stock Tracker ETF and (ESG) FlexShares STOXX ESG Impact Index Fund and SPX since tRump came into and now left office. As you can see MAGA in red vs ESG in blue (as R and D proxies) and SPX in yellow as a baseline, who is on top and has been for years, for the most part inline or above the S&P return. Blue Maga away. And on bottom of chart it shows the spread even more distinctly.