QE1 and QE2 may have been great ships, but it will be written of this economic crisis that those terms referred to Federal Reserve policies that created cheap money in unprecedented ways. QE2 ended this past June with mixed reviews, but now headlines abroad and confidence eroding measures mostly created by politicians here have contributed to a softening in the economy. The Fed has observed that no other branch of government seems able to make a positive contribution to the economy's dilemma at this time, and felt they had to follow on with a new program.
The Fed announced today a program to push down long term interest rates even further than the near record lows they are today. Look forward to a chance to refinance your mortgage and maybe other debts once again in the future.
Reason I it is important to you:
Are 2.5% 15 year mortgages a possibility? In this era of amazing events and unheard of numbers, probably.
Reason II:
America and Its Political Leaders Have to Fix the Economy From Here
This really marks about the limit of the Fed's abilities to substantially help the economy. The President and Congress control spending, taxes and policies that govern the economy. It is time to expect them to understand the problem and fix it.
Unfortunately, partisan slogans don't add up to substance and that is what is needed. This is going to take a while and in the meantime the USA is going to be held hostage, so to speak, by the political class who have shown themselves adept at only one thing. Getting Elected.
The Political Debate about Spending or Not Spending is Wasting Time.
Six Issues Only Congress and the President Can Fix.
-Health Care Costs in the US are about $1 Trillion higher than they should be killing job growth and public sector budgets.
-China has conspired and largely succeeded in stealing our industrial base and accumulating our wealth through unfair trade. Thanks for the incompetence Federal trade regulators and Congress.
- Tax policies have to be simplified and streamlined, closing loopholes, while tax breaks for the very wealthy have to be justified in terms of the national interest or closed now.
-Stock and Capital market activities have to be regulated so they benefit the small investor first the formation of capital for productive investment. Amazing how influence money has warped this issue.
- Public education in the US is the most highly funded in the world. The outcomes for that investment is pretty miserable with kids leaving high school with inadequate skills to find a job outside of retail services. Trade schools, discipline, expectations, behavior contracts, school uniforms, teacher merit evaluations and most of all parent accountability are going to have to be put in place.
- A new energy infrastructure will lower our fuel consumption, increase domestic production, create jobs and lower imports. Extremists and political cronies of the left and right, should be shown the door from policy making.
The US can do these things and would thrive if it did. Bernanke can't do it for us though, we have to demand it of our political leadership.
