Economists Say Fed Saved the U.S. Economy

[cory777]

Source: Wall Street Journal

By PHIL IZZO

The $787 billion stimulus package was a good for the economy, but the Federal Reserve played the biggest role in rescuing the U.S. economy from the financial crisis, according to the majority of economists in the latest Wall Street Journal forecasting survey.

"A much worse result would have occurred if nothing had been done," said survey participant Allen Sinai of Decision Economics, co-author of a paper examining the effects of government intervention with colleague Paul Edelstein. But "the absence of monetary policy easing would have resulted in a much worse economy than the absence of the fiscal policy stimulus."

Read more: http://online.wsj.com/article/SB10001424052748703625304575115674057260664.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

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Damn! The kool-aid tastes great!

[Grand Taurean]

1. And the banksters still have

trillions of bad assets they are being allowed to hide on their books.

[PerfectSage]

Geez if only the Fed hadn't blew up the economy in the first place

I never could understand why Greenspan made those last 2 rate cuts in Nov 2002 and June 2003.

Low interest rates(ie negative real interest rates) give people disincentive to save and incentive to borrow beyond their means... ...to repay. The Fed can ease all it want's but that won't stop the privately owed Fed from being the ultimate bagholder. Who owns the Fed? Wall Street?

Quantitative Easing... ...inflation... ... ... ... ... ...the end of the US dollar as reserve currency... ...the end of the US as superpower.

[karynnj]

13. To pump the economy for Bush, who he wanted to win.

[PerfectSage]

2. Geez if only the Fed hadn't blew up the economy in the first place

I never could understand why Greenspan made those last 2 rate cuts in Nov 2002 and June 2003.

Low interest rates(ie negative real interest rates) give people disincentive to save and incentive to borrow beyond their means... ...to repay. The Fed can ease all it want's but that won't stop the privately owed Fed from being the ultimate bagholder. Who owns the Fed? Wall Street?

Quantitative Easing... ...inflation... ... ... ... ... ...the end of the US dollar as reserve currency... ...the end of the US as superpower.

[heli]

3. Goldman Sachs boys hailed as heroes for pissing out the fire they started

[Dr.Phool]

4. Update:

Economists caught smoking crack, meth, opium, and dog shit.

[lagavulin]

14. Better Update: "74% of Economic articles are literally published by the Fed"

National Post: "Rewriting the Fed's History"

"74% of the articles on monetary policy published by U.S. economists in U.S.-edited journals appeared in journals published by the Fed...The Fed’s own capacity to write and re-write history dominates the information flow."

[Lucky Luciano]

5. It is true - the policies helped, though you can easily argue that prior

Bad policies brought us to the brink. If the Fed did nothing - AKA the Herbert Hoover method if hzndlng a severe economic crisis, then you would see far more tent cities than you see today.

[countmyvote4real]

6. And consider the source.

This is not you father's WSJ.

[beardown]

7. Amazing what you can save with 12 trillion in guarantees.

Duh. 12 or more trillion in guarantees helped?

We could have seen much better and fairer and broader help if the FED had given out 2-3 trillion in mortgage adjustments and refinances to allow owners to stay in the houses they could no longer afford and to give breaks (stimulus) to those who did not need to be saved and the FED could have allowed a dozen or so of the worst offending banks to die and take their investors' money with them.

Then we'd have a bunch of rich folks hollering for more regulations and millions more working class people still in their homes or spending a bonus for having stayed out of the housing Ponzi game in the first place.

[Kablooie]

8. Maybe they did and maybe they didn't. We will never know.

Is what we are going through a good result?

Or did it not do any good and what we are going through is a bad result?

It will always remain a matter of opinion.

[rucky]

9. Shock Doctrine in three easy steps...

1. Come up with a solution to a crisis that benefits you

2. Cause said crisis.

3. Implement solution quickly, before anyone comes up with a better one.

Lather, rinse, repeat...

[No Elephants]

10. Saved the economy----for whom?

[Roland99]

11. Are these the perpetually "surprised" economists?

[Javaman]

12. Um, no, it was our tax dollars that did that...

it was the fed that spent them.

And I'm still not convinced that the economy is "saved".