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2011 Apr 23, 7:05pm
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2011 Apr 23, 7:05pm
There was a stealth stimulus of $1T/yr of new consumer debt:
http://research.stlouisfed.org/fred2/graph/?g=gM
shows how new consumer debt went from $400B/yr in the late 90s to $1T+ in 2003-2007.
Now it's -$200B/yr.
With that $1T/yr injection gone, we should expect to be down millions of jobs, even though gov't spending is rising at $200B/yr or more.
To put that in perspective, here's government spending increases (red line) on that same graph:
http://research.stlouisfed.org/fred2/graph/?g=gN
Sobering, no?
Stimulus by Fed Is Disappointing, Economists Say
http://www.nytimes.com/2011/04/24/business/economy/24fed.html?hp
I'll cut to the conclusion:
“What has it done? It has eased credit conditions, it has pumped up the stock market, it has suppressed the dollar,†said Mickey Levy, Bank of America’s chief economist. “But does the Fed think that buying Treasuries and bloating its balance sheet is really going to create permanent job increases?â€
Answer? Yes, but don't look at the participation rate lurking behind the curtain, of course.