Hey, Big Saver!

If you want to know what the future of the American economy looks like, when the unemployment rate will return to below 6%, or when annual growth will climb back above 3%, it’s helpful to stop thinking for a moment about those families in serious financial distress. That’s because the future of the U.S. economy relies, in large part, on another group of people living in fear: millions of Americans who have a little disposable income. The decisions that the twitchy class faces may not be the most challenging, but they are, from a purely economic perspective, perhaps most important. Imagine a couple in their 30s, living in the starter home they bought eight years ago. Their kids have outgrown that tiny shared bedroom, and the den is crowded with toys. The couple are eager to buy a bigger place, they have paid down their debts and built up their savings, but they’re not quite over the terror of financial crisis and sluggish recovery. Even though they can afford it, they worry that now isn’t the best time to splurge. What if one of them loses a job? What if the other doesn’t get a raise for years? The agita still comes easily. Though it doesn’t always seem true, times actually have changed. During the worst of the recession, people were just plain broke. Their debts were at historic highs, and their savings were at record lows. That’s no longer the case. American households have reduced much of that debt and built up some savings. They’re just not spending it yet. So whereas Federal Reserve was once tasked with performing life support on financial sector, it’s new challenge is more subtle but nearly as complicated. It needs to convince consumers that they can trust the economy again, that now really is the time to jump back into stock market or buy that bigger house. To that end, Federal Reserve chairman, Bernanke, has announced a third round of what’s called quantitative easing, the controversial strategy that the Japanese first experimented with in 2001. Then as now, quantitative easing has fairly simple goal (to unstick a stagnant economy, that is), but like nearly everything Fed does, it’s also shrouded in confusing language, technical details. And it’s not exactly most direct stimulus either (…..)

Link: http://www.nytimes.com/2012/09/30/magazine/hey-big-saver.html


Acerca de ignaciocovelo
Consultor Internacional

3 Responses to Hey, Big Saver!

  1. Professor Uziel Nogueira says: Commodities -priced in US dollars- are another downside of FED printing money for nothing. Food and energy prices will continue to go up in order to compensate for a devalued dollar. US consumers are caught up in a double whammy. Negative interest rates in their savings and high food and energy prices. US economy 2012 became Japanese economy of the 90s.


  2. Republicans came into this campaign believing that it would be a referendum on President Obama, and that still-high unemployment would hand them victory on a silver platter. But given the usual caveats — a month can be a long time in politics, it’s not over until the votes are actually counted, and so on — it doesn’t seem to be turning out that way. Yet there is a sense in which the election is indeed a referendum, but of a different kind. Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives? If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored? I ask that question because we already know what Mr. Obama will face if re-elected: a clamor from Beltway insiders demanding that he immediately return to his failed political strategy of 2011, in which he made a Grand Bargain over the budget deficit his overriding priority. Now is the time, he’ll be told, to fix America’s entitlement problem once and for all. There will be calls — as there were at the time of the Democratic National Convention — for him to officially endorse Simpson-Bowles, the budget proposal issued by the co-chairmen of his deficit commission (although never accepted by the commission as a whole). And Mr. Obama should just say no, for three reasons (…..)


  3. Professor Uziel Nogueira says: Prof PK has an UNIQUE view of two fundamental tenets of modern macroeconomics. First, he believes that there is no limit on the amount of dollars that can be printed by the FED. Second, he believes that there is NO limit on the amount of money to be spent by the government.

    In other words, Prof PK believes in the fiscal-monetary EXCEPTIONALISM of the US. Perhaps, he will have a chance to transform his academic thinking into policy if Obama is reelected in November.



Introduce tus datos o haz clic en un icono para iniciar sesión:

Logo de WordPress.com

Estás comentando usando tu cuenta de WordPress.com. Cerrar sesión /  Cambiar )

Google+ photo

Estás comentando usando tu cuenta de Google+. Cerrar sesión /  Cambiar )

Imagen de Twitter

Estás comentando usando tu cuenta de Twitter. Cerrar sesión /  Cambiar )

Foto de Facebook

Estás comentando usando tu cuenta de Facebook. Cerrar sesión /  Cambiar )


Conectando a %s

A %d blogueros les gusta esto: