How's that again? Deflation is good for growth? Have WSJ journalists ever read an economics textbook? Is the FOMC now following the BoJ by targeting deflation? Are they responding to a falling core CPI by raising the discount rate?
Even Olivier Blanchard, chief economist at the IMF, is now advocating an inflation target of 4% inflation instead of 2% or (God forbid) "price stability".
So now it appears that the U. S. plan is to raise the discount rate (now), end quantitative easing (April), and impose a huge tax increase (January). This growth-and-jobs policy will sure be a shot in the arm!
It is only a matter of time until nominal GDP growth dips below zero (2Q10?) and federal and state tax receipts crater again. We should expect a widening deficit, rising unemployment and very weak profit growth. What a fiasco. Bail out now. (Not that I have the courage to sell.)
It is only a matter of time until nominal GDP growth dips below zero (2Q10?) and federal and state tax receipts crater again. We should expect a widening deficit, rising unemployment and very weak profit growth. What a fiasco. Bail out now. (Not that I have the courage to sell.)
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