Fed Meets Enemy: Government Spending -- AP

[Career Prole]

NEW YORK - The Federal Reserve is increasingly concerned about inflation and a significant part of its problem is being caused by the nation's elected officials.

In language that's pretty tough for central bankers, the members of the Fed's rate-setting Open Market Committee bemoaned the fact that significant new spending to help rebuild hurricane-devastated areas would add to "federal deficits that were already large and underscored the worrisome loss of fiscal discipline evident in recent years."

Listen to that again: a "worrisome loss of fiscal discipline ..." Since the Fed thinks it's sharing Washington with legislators whose profligacy is working against the economy's interests, it could easily mean short-term interest rates are going to keep rising to an ultimate resting point higher than some now expect.

The central bankers also made clear in minutes of their Sept. 20 meeting that were just released Tuesday that the government's fiscal lapse comes at a bad time. "The expansion of federal spending implied an increase in fiscal stimulus at a time when the margin of unutilized resources in the overall economy was probably thin," the minutes state. That's an inflationary set of circumstances.

http://tinyurl.com/762rk


"Listen to that again: a 'worrisome loss of fiscal discipline ...'"
Hey dude, don't forget to repeat "in recent years" as well.
We know who the hell to blame.
It's political alright, but this fiscal madness we're embroiled in now is of fairly recent vintage...say, oh, 2000 or so...and it's important voters don't forget that.

[orwell]

1. This is funny...

...the main crack dealer is yelling at the junkie.

Spare me the outrage Greenie, you scumbag.

[rkc3]

2. What's even worse about those comments is the rise in short-term

interest rates - since the interest on most credit cards is tied to the fed's prime, a lot of people will be paying higher interest rates on already insurmountable debt.

And with the draconian bankruptcy bill, there will be a lot of folks getting bent over this winter.

Welcome to Gitmo America as the RudePundit said today.

[Career Prole]

7. Meaning larger minimum payments, which of course won't

mean a thing for well-off folks but will severely hurt those who are struggling to make the minimum payment already. :(

[rkc3]

8. Not to mention that but the interest is compounded.

$3,000 in debt paid in minimum payments now becomes what $5K. It becomes a death spiral.

[indepat]

3. Funny, but seem to remember some as**ole blessing W's tax cuts

and later indicating maybe social security benefits would need to be cut to pay for W's tax cuts which disproportionately benefit the most affluent. Hypocrisy at its zenith.

[Lasher]

5. Exactly right.

Now Greenspan hopes to salvage credibility with his retreat: "The expansion of federal spending implied an increase in fiscal stimulus at a time when the margin of unutilized resources in the overall economy was probably thin," That means the tax cuts for the wealthy were stupid. Well you're a day late and a dollar short, Alan. How pathetic.

A real man would have said something like, "The tax cuts were ill-advised and continue to be harmful, with little or no actual benefit to the overall economy. They should be repealed, because we have seen that the supply side economic theory was never anything more than an attempt to excuse taking from the poor and giving to the rich."

[indepat]

10. Exactly what Greenspan should say and should have been saying for several

years. No one IMHO will have caused more grievous permanent harm to the middle class than he by selling his intellect and immortal soul to the rape of this nation and most of its citizens. Other than that, the chairman is o.k. No, I cannot tell such a monstrous lie.

[Inland]

11. Yep. I hear some financial guys on the radio and they are scared

that the fed is going to monetize the deficit, eg, expand money supply to accomodate Bush's deficit spending and distortions of the economy. Inflation looms, incredible as it may seem.

[chopper]

4. we have met the enemy

and he is us.

[annabanana]

6. we know what THIS means .. LESS health.. LESS education

LESS critical function agency money LESS conservation

It does not mean:
less war
less corporate presents under the tree

[firefox]

9. I am surprised to see them called "central bankers"

I am all but shocked to see this. Most people have to believe the Federal Reserve is part of the USG. This is the first time I have ever noticed a report of this nature using the term "central bankers".