Bernanke: Obama Spending Costing US 2 Million Jobs

( – promoted by Rob “EaBo Clipper” Eno)

Well, actually Ben did not put it in those terms.  But add up what the Fed has been saying about QE2 with the projected $1.6 trillion FFY 2012 deficit projection and that’s the only conclusion that you can come to.

Chairman Bernanke forecasts that QE2–Quantitative Easing Part 2: the purchase of $600 billion in Treasuries by the Fed–will result in the creation of 700,000 jobs.  Yes, really.  Here’s the coverage from the USA Today:   http://www.usatoday.com/money/…  

The theory behind QE2 is that when the Fed buys treasuries on the open market and puts them on its balance sheet, that drives interest rates down.  Bernanke made the claim that the reduction in interest rates as a result of the most recent $600 billion of bond buying will lead to the creation of 700,000 jobs over the next two years.

So what if the $1.6 trillion of Treasury paper that Obama plans to issue the coming year were not issued.  http://www.washingtonpost.com/…  Presumably, that would have the same effect as $1.6 trillion in quantitative easing on bond markets.  

And the effect on jobs?  By Chairman Bernanke’s estimates, Obama’s spending spree is costing the US economy  1.9 million jobs over the next two years (that’s 1.6 trillion is deficit spending / $600 billion from QE2 times the 700,000 jobs from QE2).

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  • So what if the $1.6 trillion of Treasury paper that Obama plans to issue the coming year were not issued. http://www.washingtonpost.com/… Presumably, that would have the same effect as $1.6 trillion in quantitative easing on bond markets.

    As I understand it, quantitative easing isn’t really about the bond market, per se… the point is to just print a bunch of money and put it into circulation by purchasing bonds.  Monetary expansion is usually accomplished by lowering interest rates, but when you can’t bring rates any lower, one must resort to “stimulus by other means.”  I don’t see how this expansion of the money supply would be in any way reversed by issuing new bonds to cover the deficit.

  • nomad943

    Anyone ever hear of the new Ebay Tax? Brand new for 2011 and brought to you by those same ever caring and compasionate souls that are “fighting for the working man” the best way they know how, by supporting those cheese head sad sacks who are presently investing their hard earned sick and personal time at the state capital in Wisconsin and then sending us the bill,

    Something to chew on while pondering how the self employment tax got so high .. how to make 3 bucks and hour and still have to fork over 36% of that in tax (before figuirng out what other taxes to spend the remaining 64% on)