Misconception

The Fed does work indirectly and this is a common misconception by the General public. They don’t lower home loan rates and they don’t control what you pay on your credit card. The term linkages is a good one.

As for the short term spending plan to increase GDP by 4% proposed by Mr. Reeder, I would suggest that they could also do a short term tax cut to increase GDP. 😉 Beyond that difference, one should note that temporary changes are met with different results than permanent ones. Case in point is that check some of us got a while back from the IRS. Sure it was a little money in our pockets but did anyone change their spending habits? Probably not.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s