Goldman Sachs recommends increased deficit spending and money creation

[Brian4Liberty]

Goldman Sachs recommends that we stay the course and keep the printing presses (monetizing the debt) and deficit spending going. Don't worry about that debt, they won't.

Another day, another dollar (to print). Goldman Sachs has called for more of the same economic policy, in other words, more irresponsible Federal monetary creation, and more government debt. This shouldn't be surprising, as Goldman Sachs are some of the main beneficiaries of cheap money from the Federal Reserve and the subsequently derived financial products (and profits). Government debt? No problem to them as long as government keeps the "monetizing debt and printing money" pyramid scheme going. Remember, those who profit the most from pyramid schemes are those that are closest to the top, and Goldman Sachs could hardly be any closer to that peak than if they actually became the Federal government. Come to think of it, many of them are already there.

And what is the downside? Just those nasty "asset bubbles". The same kind that made Goldman Sachs billions. And when the bubble popped, it drove much of their competition out of business, and almost collapsed the entire global financial system. It worked out so well for them last time, they might as well recommend a second go at it. It's a no lose proposal for them.

Are our politicians foolish enough to continue taking advice from the people who profit from the economic demise of the United States?

http://septvote.blogspot.com/2010/07/will-boxer-side-with-goldman-sachs-yet.html

 

[Brian4Liberty]

More on Goldman's call for increased stimulus:

Goldman calls for QE2
Posted by Neil Hume on Jul 07 10:04.

This will be music to the ears of Paul Krugman – Goldman Sachs calling for Quantitative Easing v2.0 and additional deficit-financed fiscal stimulus.

The bank’s chief US economist Jan Hatzius reckons there are enough “disturbing signs” — Friday’s payroll report and recent CPI releases for example — to justify further policy easing via a return to unconventional monetary policy, and/or fiscal stimulus.

And don’t worry about the consequences — such as asset bubbles or a higher public debt burden — because financial markets are nowhere close to bubble territory and federal interest payments stand at just 1.5 per cent of GDP, says Hatzius.

Here’s what he says must be done to counter the possibility of a double-dip:

On the monetary side, the possibilities include additional purchases of Treasuries and mortgage-backed securities, as well as TALF-like structures—i.e., special purpose vehicles that lend to nonbanks using equity provided by the Treasury and debt provided by the Fed. Whether these will happen anytime soon is another matter. Additional purchases of Treasuries and/or MBS mortgages do not yet seem to command a sufficient majority on the FOMC. This might change if growth and/or inflation ease further. But even then it is unclear just how effective they would be. After all, Treasury purchases did not seem to have much impact in 2009, and MBS spreads are already quite compressed, limiting the potential for further narrowing. A TALF-like structure could be more powerful, but it would need the Treasury’s cooperation and the Fed’s authorization under article 13.3 of the Federal Reserve Act, i.e. the Fed would need to invoke “unusual and exigent circumstances.” This is a very high hurdle.

On the fiscal side, we hope that Congress passes the extension of emergency unemployment insurance, continued aid to state and local governments, and at least a temporary extension of the bulk of the 2001/2003 tax cuts beyond the end of 2010. If some of the tax cuts are left to expire, then this should be offset by temporary fiscal easing elsewhere. The point is that a tightening of the overall fiscal stance at a time when the economy is already struggling to maintain the current, unacceptably low level of resource utilization is a bad idea. In fact, we favor additional deficit-financed stimulus, coupled with a commitment to cut the longer-term deficit more aggressively than currently envisaged in the administration’s 10-year plan. The consolidation could include cuts in discretionary expenditures, slower growth in entitlement spending, and gradual hikes in both direct and indirect taxes. The precise mix is a matter of political preferences, and reasonable people can disagree about the pros and cons of different measures. But the need for long-term budget restraint should not stand in the way of a near-term boost when the economy clearly needs it.

Krugman does have his supporters.

http://ftalphaville.ft.com/blog/2010/07/07/280396/goldman-calls-for-qe2/

 

[Brian4Liberty]

Another excerpt from the Goldman Sachs paper:

Our recently released Global Economics Paper No. 200 entitled “No Rush for the Exit” argues that policymakers should react to the combination of a sluggish recovery and declining inflation with additional policy easing, either via a return to unconventional monetary policy or via further fiscal stimulus. The obvious counterargument is that monetary and fiscal easing carries long-term costs in the form of, respectively, a risk of a renewed asset bubble and a higher public debt burden.

 

[Seraphim]

These criminals should be indicted, prosecuted and sent away for fraud in front of the whole world. Once that is done MAYBE we can have a chance at restoring honest money systems.

 

[sevin]

Meanwhile the IMF wants the U.S. to bring its deficit under control. http://www.ronpaulforums.com/showthread.php?p=2783717#post2783717

It seems less and less likely that a single group of people are working together to get financial control of the world and more likely that several different groups are at war with another. Things could get real ugly in the next decade.

 

[noxagol]

Meanwhile the IMF wants the U.S. to bring its deficit under control. http://www.ronpaulforums.com/showthread.php?p=2783717#post2783717

It seems less and less likely that a single group of people are working together to get financial control of the world and more likely that several different groups are at war with another. Things could get real ugly in the next decade.

Or that's just what they want you to think! DUN DUN DUN!

 

[sevin]

Or that's just what they want you to think! DUN DUN DUN!

http://www.dramabutton.com/

 

[the count]

look, goldman, warburg and all the other investment banks only care ABOUT THEMSELVES! so obviously they will recommend ANYTHING FROM WHICH THEY WILL BENEFIT.

....and dont forget that they are buddy buddy with their pals of the same faith over at the fed.... nuff said

PS when i was young i really believed everybody was the same, everybody had good intentions and everybody in politics was honest. boy was i wrong.

 

[Seraphim]

look, goldman, warburg and all the other investment banks only care ABOUT THEMSELVES! so obviously they will recommend ANYTHING FROM WHICH THEY WILL BENEFIT.

....and dont forget that they are buddy buddy with their pals of the same faith over at the fed.... nuff said

PS when i was young i really believed everybody was the same, everybody had good intentions and everybody in politics was honest. boy was i wrong.

Bro, goldman sachs, warburg, jp morgan etc ARE THE FEDERAL RESERVE. Those are the controlling interests of the FED. They aren't buddy buddy, they are one in the same. So even worse then what you said lol

 

[Anti Federalist]

http://www.dramabutton.com/

I'll see your drama button, and raise one sad trombone for the utter fail of GS.

http://sadtrombone.com/

 

[specsaregood]

News Flash: Budweiser recommends drinking more beer.

 

[the count]

Bro, goldman sachs, warburg, jp morgan etc ARE THE FEDERAL RESERVE. Those are the controlling interests of the FED. They aren't buddy buddy, they are one in the same. So even worse then what you said lol

OMG! We are all scr*wed for sure then!