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Thursday, December 3, 2015

Federal Deficit Spending, Fed Funds Rates + QE, & Recessions


  1. So where will the Federal Govt spend $15-20T over the next decade? Looks like the individual is tapped out (mortgage debt, auto debt, student loans, and revolving credit), the businesses have taken on a lot of debt during this growth cycle, which likely leaves the govt. to due a lot of spending during the next cycle. Left or right? Education, welfare, healthcare spending or military, war, tax cuts? Other options?

  2. I'm finding this very difficult to understand, but the lower chart seem to suggest that the tools that the fed has previously used - previously effective - are no longer working. I think this phenomena is called the 'Law of diminishing returns' means the more and more you put in, the less and less you get out. Perhaps that's the real reason behind the Fed talk about interest rate rises....nothing else will do anything much?


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