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Wow! The food stamp program is now equivalent to 14 percent of all U.S. grocery store sales. 

By: capt_nemo in WRGO | Recommend this post (1)
Fri, 14 Dec 12 10:31 PM | 252 view(s)
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Though the Fed indirectly finances the food stamp program with its purchase of treasury securities — $45 billion per month starting in January — we wouldn’t be surprised someday that the central bank actually begins to print food stamps. This wouldn’t pack the potential punch of creating “high powered” bank reserves, which can be multiplied in a healthy financial system through credit creation, however. But at least the “printed money food stamps” would lead to direct demand creation, rather than, as most of it does now, sit on deposit at the Fed in the form of excess bank reserves.

Seriously. Monetary policy has almost become this absurd.

What if the Fed’s policies actually contribute to unemployment? Such as repressing and changing the relative cost of capital. This makes it easier for companies to finance machinery which either enhances labor productivity, reducing the need for more workers, or less costly to replace workers with robots. Clearly, some of this is currently taking place.

The Fed’s policy of repressing government borrowing costs and indirect deficit financing reduces the government’s incentive to implement the necessary structural reforms to put the budget on a sustainable path. This would reduce uncertainty and maybe give the business

http://www.ritholtz.com/blog/2012/12/the-fed-on-food-stamps/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29




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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.


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