Friday, January 3, 2014

Why did we grow in 2013?

Summers has a dual claim, monetary offset by the fed and reduced government growth in a period where DC spending has a negative effect. So, what was it? A reduced ill wind from DC, or federal reserve adaptations? Or how about fracking in a period of oil shortages? Summer mainly proves sequestering helped. If the Fed did anything it was too much QE, a point Summer acknowledges:
It [sequestering] was quite a test, as the actual fiscal austerity was even greater than the Fed anticipated when it adopted QE3 and forward guidance in late 2012.

So we know the Fed is a bad guesser, at least. Even as we now know the Fed was a bad guesser, it is still late in making a correction, it is still over compensating. After all, if DC spends badly, the Fed should raise the rates on DC and make them cut the shenanigans.

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