America Can’t Prosper With Low Rates, Weak Dollar
This is heavy material for a Memorial Day weekend but the suffering caused by Obama’s policies doesn’t get a holiday. Diana Furchtgott-Roth at Market Watch writes that the Fed isn’t helping the economy either, and may also actually be hurting it. Here is her opening:
Five years after the beginning of the economic recovery, after rock-bottom interest rates and trillions of dollars of quantitative easing by the Federal Reserve, the economy is growing about 2%.
No country has attained prosperity by printing money and weakening its currency, and the United States appears to be no different. Monetary stimulus might be useful in the initial stages of a recession and recovery, but zero percent interest rates for years on end are a different matter altogether. Under Fed Chairman Ben Bernanke and his successor, Janet Yellen, the dollar has fallen about 15% against the euro.
Here are devastating bullet points from the NCPA’s summary of the article:
- Over the past four years, GDP growth has averaged roughly 2.2 percent. This is nowhere close to the growth we saw in the fourth quarter of 2006, when GDP grew at 3.2 percent.
- Usually we can expect unemployment rates to decline in the years following the onset of a recovery. However, our current level of unemployment is 6.3 percent, a full percentage point higher than the average rate at this point in the U.S.’s four previous recoveries. Moreover, the only reason that the unemployment rate has fallen to 6.3 percent is because the labor force participation rate has dropped to levels not seen since 1978.
- Participation rates in the workforce should rise alongside employment rates. Instead, we have seen a drop in the participation rate from 65.7 percent in June 2009 to the current level of 62.8 percent.
- Additionally, 35 percent of the unemployed have been unemployed for more than six months. That is significantly higher than in previous recoveries. The portion of the unemployed that were unemployed for more than six months was a respective 18 percent and 16 percent in September 2006 and January 1996.
This is merely reporting what many already know, but it’s no fun to read about nevertheless.
Read the full article: Market Watch
Read the summary: National Center for Policy Analysis
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