Felix TV: The fiscal solution

By Felix Salmon
November 17, 2010

We’ve seen the problem, and we’ve seen why quantitative easing doesn’t seem to be much of a solution. So what is the solution? Fiscal policy, of course. But don’t hold your breath.


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I am holding my breath! The Fed is creating money out of thin air and using it to buy U.S. Treasuries. In other words, the Fed is creating money out of thin air and, indirectly, lending it to the U.S government.

I think the U.S. Congress is smart enough (barely!) to figure out that it should go ahead and spend the money the Fed is creating out of thin air.

Posted by JPB3 | Report as abusive

Love it. Now make it embeddable!

Posted by MickWeinstein | Report as abusive

I nearly had a seizure watching that vid. WTF? Do you think your readers all have ADD?

What exactly would a government program targeted at putting the unemployed back to work look like? Should we make the census permanent?

We gave the Feds nearly a trillion in cold hard cash and they pissed it away. Since then, Obama has said about five words and Geithner has done ZERO about putting people back to work (unless you include “remembering them in my prayers” as a plan).

There would have to be serious debate about WHAT would actually work, but the cowardly Dems won’t even broach the subject with the great and powerful Oz (Boehner, our new default overlord). This is a democracy?

We deserve better than this. Really, America, we do.

Posted by LadyGodiva | Report as abusive

I’ll repeat myself from earlier in the week. What if Ben Bernanke came out and said: “I’ll stop QE2 when Congress 1) lapses the Bush Tax Cuts, because they are ineffective and budget busting and 2) uses 70% of the new revenue to fund direct stimulus.”

Fed Chair Alan Greenspan intervened in 2001 to push the cuts through. Why can’t Bernanke step in now with his Fed Chair’s prescription? If he believes stimulus will work better, doesn’t he owe that judgment to the American public?

Unless we think Bernanke is a Republican hack who cares only about tax cuts……but we really don’t know that with anywhere near the level of certainty that we now have about Greenspan’s direct support of the GOP

Posted by Dollared | Report as abusive

And please, make it embeddable. I have a friend at the WSJ and I need to post it on his Facebook wall and ask why we have to depend on Reuters for this level of pedantic innovation.

Posted by Dollared | Report as abusive

Felix –

We have massive fiscal stimulus built in. It takes the form of a huge structural deficit that will never be addressed with Obama and Congress gridlocked.

This stimulus takes place every day of ever year from now until ????

Posted by DanHess | Report as abusive

An extension of some or all of the Bush tax cuts, totally unfunded by spending cuts of course, is an enormous likely piece of fiscal stimulus happening presently.

Posted by DanHess | Report as abusive

@DanHess, don’t forget the repeated extension of unemployment benefits. Not saying that doesn’t make sense on a humanitarian basis, but massive deficit spending is the essence of “fiscal stimulus”.

Posted by TFF | Report as abusive

But DanHess, it’s incredibly inefficient stimulus. Given who gets it and what they do with it, it’s more likely to be buying shares in Baidu than startups in Silicon Valley, or buying trips to Paris than take-and-bake pizzas in suburban Chicago.

It’s part of the problem, more than it is a help.

Posted by Dollared | Report as abusive