Thursday, February 2, 2012

How has the Federal Reserve changed since Obama became president?

I am doing an essay that covers the following questions:

Whats is your assessment of the current economic conditions? Do you believe that the actions by the federal reserve, the prez, and the congress are the correct actions? Will these programs be effective? What actions would you recommend?



I can find plenty of resources on what actions the Obama administration is taking in regards to the current financial crisis, but would really like some up to date information on what actions the congress and Federal Reserve have been taking since Obama has become the president.



Any information certainly would be helpful.

Thank you so much!How has the Federal Reserve changed since Obama became president?Wow, thanks for your super duper helpful answers guys lol



Lemme try and help. The Federal Reserve is by far the most powerful organization in America, and it is also incredibly secretive, very few people know what its really like. The Chairman of the Fed, Ben Bernanke, has been printing money like crazy, the number is around $4 trillion to give out as loans to struggling banks and companies, and try and pay off bad debt. So far, this has been working tremendously well, and the economy seems to have "bottomed out" and will begin improving within the next few months. So, wile the Fed has been printing money, Congress has been deciding what to do with it, so they've passed the stimulus package you hear so much about, which is chock full of building projects and things of that nature. They've also been working with a new budget for next year, and have been handing out TARP money to banks. Obama has been doing a phenomenal job, if you look at the facts and not opinions, and he's had great help from Congress and the Federal Reserve. If you need to know more, feel free to email me, I'm happy to help :]|||No, but under both Bush and Obama the Federal Reserve is spending money without permission from the Treasury and they're sending the American people the bill.How has the Federal Reserve changed since Obama became president?not really.|||The Federal Reserve is by far the most powerful organization in America, it is a quasi-public central bank and it is also incredibly secretive, very few people know what its really like. The Chairman of the Fed, Ben Bernanke, has been printing money like crazy, the number is around $4 trillion (quadrupling the amount of cash in circulation) to give out as loans to struggling banks and companies, and try and pay off bad debt. So far, most of this has been ineffective, Though the economy seems to have "bottomed out" and leveled off, it may not begin improving until 2010. So, while the Fed has been printing money, Congress and the Treasury (who does not have the constitutional authority) has been deciding what to do with it, so they've passed the 'stimulus' package(less than 2% has been spent so far and the economy has leveled off, the rest is not needed but will be wasted anyway) you hear so much about, which is chock full of unnecessary spending. They've also been working with a new budget for next year ( which is scheduled to have a $1.2 trillion deficit), and have been handing out TARP money like candy to banks. Obama has been doing a horrible job, if you look at the facts and not opinions, and he's had great help from Congress and the Federal Reserve is pushing the debt levels in this country to untenable levels. We will soon faced incredible inflation levels, far worse than the 1970's, that will stifle any major increases in the economy. This will drive the costs of goods and services up on everyone.

If you need to know more, feel free to email me, I'm happy to help :]How has the Federal Reserve changed since Obama became president?In talking about monetary policy and fiscal policy, the Federal Reserve and the government respectively have two targets: Money Supply and Interest Rates.



In talking about monetary policy, the Federal Reserve (aka the Fed) has three tools: Open market operations, discount policy, and reserve requirements.



In talking about fiscal policy, the government changes federal taxes and government purchases in attempt to affect these same two targets.



In the economy today, both the fed and the government are going to use expansionary policies. This means expansionary monetary and fiscal policy.

For the fed, this generally means buying treasury securities to increase money supply, discount loans to banks, and possibly lowered reserve requirements (so that banks can make more loans).



Likewise, the government is trying to increase money supply by passing the well known "Bailout Plans". However, this is NOT a government purchase. These "bailouts" are known as transfer payments where the government spends money and does not receive a good or service in return. Right now, these are in the trillions of dollars and projected to be 1.7 trillion dollars MORE THAN the government is expected to take in (aka, deficit spending - see Keynesian economics)



The problem sets in where both institutions are pushing in the same direction.

Think of the economy as a toy train on a track, and the fed and government are two kids pushing it up a hill. If the two combined push it more than it needs to go then it will fall down the other side of the hill and end up back in a recession or depression. If they don鈥檛 push it enough, then it won鈥檛 get up the hill at all.

In looking at both policies in a static aggregate demand and aggregate supply model, we find that the government uses its powers to affect demand. If there is too much policy used, we will see a surplus of money and thereby see inflation. If not enough policy is used, we see a shortage and thereby see deflation. The issue the fed and government run into is that nobody really knows how far to push.
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