Oh right, except in 2000 & 2008...pretty important election years, doncha think?
And I gotta love your willingness to drown the country in infinite debt to try and ride out your final years.
I want to respond in a way that will perhaps make my position more clear to you. I'm not expecting you to agree. But I am asking that you make an effort to try and understand my position and the reasoning behind it.
Yes, I am an advocate of QE. But in the U.S. we haven't got nearly so much benefit from it as we could if the Central bank had had a better partner in the Congress. (Japan may be in the process of making mistakes similar to those the U.S. has made, but implementing QE is not a mistake. That is a good thing! It will very interesting, to me, to follow the inevitable ECB implementation, where it should be both more difficult to implement QE --they have no Eurobond-- but easier, I would hope, to achieve agreement on demand-side initiatives.)
Here is the mistake we've made. The macro economy of the U.S. is suffering from a hangover. There has been a too long binge, nearly thirty-years in fact, drinking from the supply-side trough. The result has been falling real wages, weakening internal demand, excessive build-up of corporate reserves and a damaging, top-heavy, national wealth distribution. Corporations now have to look more externally for customers than in the past-- this is one of the incentives for corporations to move operations abroad. There is intractable, long-term unemployment in the U.S.
We give our Central Bank the charge of preventing high unemployment. This is wrong, because the tools available to the Central bank are inadequate, by themselves, to do this. The responsibility for a satisfactory employment rate should rest jointly with the CB
and Congress.
QE is a demand side initiative. Whereas paying for lowering of top marginal income tax rates using bottom marginal rates, lowering corporate tax rates or increasing incentives and subsidies are all supply-side initiatives. These two styles, if you like, of macro economic policy are somewhat incompatible -- quite incompatible actually! We should do one at a time, but for heavens sake, not both simultaneously!
What we need now is corporate austerity combined with government largesse aimed at the middle class. What is needed is a return to demand side-economic policy. We need tax cuts aimed at the middle class, paid for by a combination of a modest rate increase in the top marginal rate along with increased corporate taxes,
or a focused reduction in corporate subsidies. I would recommend that we break the top marginal personal tax rate into two brackets with the penultimate bracket at ~39% and the top bracket at ~42%. Creative corporate tax policies are needed to penalize retention of excessive reserves in favor of putting those reserves to work in domestic investments.
Clearly you can not expect internal demand to grow much if wages continue to increase less than inflation! Expecting that is lunacy! We must reverse the supply-side-caused pattern of the past three decades. If we do, real wages will start growing again, corporations can enjoy stronger internal markets, and wealth distribution will, over time, revert to that of the much healthier economic periods enjoyed in the past. And too, QE, which is a demand-side tactic, will be more effective and result in less debt hangover.
It makes no sense to apply supply-side and demand-side economic policies simultaneously. They tug at each other and result in a interminable recovery that is neither hot nor cold, but lukewarm. That is precisely what we are experiencing, and we will continue to until we make the necessary shift away from supply-side policy and back toward demand-side. That requires that the Congress act. The CB alone is powerless to pull off the necessary policy changes. QE is a useful initial step in the right direction. Now we need our Congress to follow through.
Yes, QE does result in debt. But debt for investment purposes is a good thing. QE was an investment in the future of the U.S. economy. Without it we'd have had a full on depression and deflation. Unless you had lots of cash, you'd be on a breadline! The country has more debt than either of us wants. Let's reduce debt by cutting back on our expenditures on wasting assets rather than cutting our investment in the future.
