HUFFINTONG POST: The Federal Reserve is trying again to jolt the American economy out of its stalled recovery. It’s extending a program that aims to encourage borrowing and spending by reducing long-term interest rates.
Wednesday’s decision followed months of concern that the economy is being held back by a weakened job market.
At the end of a two-day policy meeting, the Fed also sharply reduced its forecast for U.S. growth and said it’s prepared to take more action if necessary. It reiterated plans to keep short-term interest rates at record lows until at least late 2014… (more)
EDITOR: As we have stated on various occasions, the poor Fed board is trying to do with monetary policy what can only be done with fiscal policy; in other words, through stimulus despite short term greater budget deficit and greater national debt for a couple of years. Once people get back to work, the budget can be more than balanced and the debt paid down.
Furthermore, the dirty little secret is that real inflation of perhaps 2% a year reduces the ratio of debt to Gross National Product, which is a key ratio, far more important than how much is actually owed .
