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Joe Biden calls for setting aside deficit concerns to invest in ailing U.S. economy
They have three primary concerns.
A: Inflation. This is a very difficult and complex thing to understand. That the federal reserve had failed to hit their inflation targets and can’t explain why, shows they don’t understand it very well themselves.
B: Upending the stock markets. If bond (debt) yields get to high, it can both increase borrowing costs, and trigger a sustained stock market contraction (40% or more). Aside from a few Bernie fanatics and democratic socialists that may think otherwise, the Democratic Party can not politically sustain that kind of prolonged market correction. The Republicans can’t because of CEO and hedge fund managers, Biden can’t because of union and public sector pensions and retirement funds.
C: Increased wealth inequity. The federal reserve will ultimately have to purchase debt on the open market to keep the world and markets from downing in US sovereign debt (other nations are doing this as well, not strictly a US problem). This essentially throws the created currency back into equities and financial institutions, driving up equity prices and fueling wealth inequity. Everyone with money to spare knows holding cash is dumb, and has their wealth in dollar priced assets.
For C, he may not even be aware. The Republicans seem to think the rich got richer since ‘08 because of merit, the Democrats because of tax code. Neither seem to be aware of the consequences of pumping and siloing 7+ trillion USD into financial markets, and how US deficit spending increased the wealth gap. So C may not even be on his radar.
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, The Dismal Science reports