Is Quantitative Easing TOO Easy?

by Teréza Eliasz-Solomon (HeiressMommy™)

QEFools rush in, where wise men never go  ...” is not just a wonderfully romantic Frank Sinatra classic. No indeed, but it just might be the prefatory reasoning that the Federal Reserve uses in deciding not to  continue with QE in the fourth quarter. Are you wondering what exactly that term means? Break it down folks – they ease the quantity of available funds in our country by supplying more to banks and other financial lending institutions, while keeping inflation stable [not lowered] and as such not promoting over borrowing of easy money. Often misunderstood and frequently used as a political football, this economic tool has in fact helped rally the U.S. financial situation for some time now. Called both a tool of the rich in consideration of their ability to handle inflationary condition more readily than the middle class and equally suggested by others to be a socialist manifesto in the always present rant about governmental pejorative concerning involvement in private banks. The standard operating quandary these days is politicians piggy backing as a publicity stunt any suggestion by this Obama administration to do redirection of economic factors. Truth is not even members of Congress, let alone the general public, have full purview and comprehension of processes like QE, etc.. I say learn REAL facts or get out of the way because this nation is headed either to complete and long lasting stability or a forever more dissolution of a strong and vibrant fluid economy – one that works for most of our citizens and allows international involvement to be a REAL growth factor or an economy that marginalizes many and limits world participation.

In June of this year Federal Reserve Chairman Bernake promised to end Quantitative Easing in 2014 – why?  The REAL answer is nervousness that the proverbial “slippery slope” is just around the corner where our debt ceiling or the perceived debt ceiling will rise out of control by government over spending. I subscribe to the “you have to spend money to make money” theory – simple business structure explains that to produce goods or profit, one must invest. Well our government is investing in us – we the people get to use the eased funds for loans both private and commercial and the cycle continues in hiring, research and development, etc.. The bogey man debt ceiling mantra is destroying any ability for a REAL and reasonable consideration of what needs to be done to stabilize and grow the U.S. economy. Add to the vitriol and panic, the far too referenced situation in other countries like Greece where cradle to grave subsidies caused run away inflation – well now, warning, warning America! Nonsense I say – we are not any where near a socialist structure in this nation – there is a substantial tax base and if we invest to help create REAL living wage [not minimum] jobs more and more spending will be able to create a ongoing cyclic situation.

So in conclusion I ask my government to ease our path – do not fear and do not falter from the REAL task at hand and please do not fall victim to public opinion. These days the drum beat of social media and one note news outlets is deafening in relationship to REAL facts and REALLY necessitated actions. Just think how dire our situation will be America if the Feds do not stay involved – surely run amok privatization got us into this morass in the 2000’s and under President Obama so called government intervention saved our collective asses – auto industry for instance. Still caution needed and we the people need to get educated and be the ombudsman of sorts or at least start electing to Congress those REALLY interested in the sophisticated academics needed to run this place!

P.S. In my memoir, Heiress Mommy … A Modern Super Woman Life! and more complete follow-up Life Journey of Heiress Mommy my life long – yes cradle on – reasons for caring about issues like the economy will be explained. Not too difficult to understand considering I was born and bred in a business family and my dear father hoped one of us would go to the Philadelphia located iconic Wharton School of Business – who knows maybe the grandchildren my husband and I provided will do just that!

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