Hm. I fully admit that I know little about macroeconomics or high finance, but I do know a little bit about running programs and mission accomplishment. This article brings up some questions for me. First, is the Fed Chairman presidentially-appointed and congressionally-approved? Secondly, didn't he say in July 2009 that: So in 2009, his bank was able to "foster economic recovery" and "prevent inflation" in order to get "maximum employment," but in 2011 there's "only so much he can do" and congress needs to fix "long-term unemployment, budget deficits and the depressed housing market" before his policies can work? While at the same time saying "the central bank is prepared to take steps to support (the economic recovery)?" Thirdly, how many times does this guy have to be wrong in order to stop doing things [taking steps, using bank tools, etc.]? From 2006: or 2007: tl;dr fodder
Are we the next Japan? http://money.cnn.com/2011/09/27/news/international/US_Japan_recession.moneymag/index.htm
The guy is right and the guy is wrong. He's right that it's a debt driven recovery, but he's wrong about needing massive govt. spending. Our GDP isn't as high as it looks because $1.5T of it is govt. borrowed money. No matter what we do, the recovery won't happen until consumers pay down enough of their debt to feel secure in borrowing again or simply spending some of what they've been using to pay down their debt. Tax cuts are exactly the prescription because it does help the consumer pay down his debts faster. Government borrowing is not encouraging anyone to lend elsewhere; it's the prescription for the new normal (lost decade). The caveat I'll make is that if govt. had transferred consumers' debt to its books, we might be enjoying a nice recovery about now. Instead, the money went to the banks so they could buy other banks and own a lot of foreclosed properties.
