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Real Wages Still DECLINING

unlawflcombatnt

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Real have declined for the 2nd straight year. This decline greatly affects the ability of American consumers to buy their own production. Combined with an anticipated decline in home equity extraction, consumer spending would also be anticipated to decline. The declining ability to borrow, coupled with declining wages, reduces the money available for consumer spending. Given that consumer spending is 2/3 of economic activity, and 2/3 of our GDP, this portends a slowdown in economic growth as well.

Though nominal wages have increased 3.5% over the last year, when adjusted for inflation they have DECLINED 0.6%. January's real (inflation-adjusted) hourly wage was $8.18/hour (in 1982 dollars). This is a -0.6% change since January 2005's $8.23/hour. Worse still, this is a DECLINE of 1.1% since January 2004's $8.27/hour. This information can be found at the United States Bureau of Labor Statistics at http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0500000049.

Despite Bush Administration spin, American workers are losing ground. They're ability to purchase production through wages is steadily declining. Since consumer spending is 2/3 of all economic activity, this erosion in purchasing power spells trouble for our economy.

Over the last 2 years, consumer spending increases have been sustained through increased borrowing alone. Home equity extraction for 2005 was $243 billion, according to Bloomberg News http://www.bloomberg.com/apps/news?pid=email_us&refer=home&sid=aE50ss.wrOM0

Home equity extraction would account for 63.3% of our economic growth in 2005. As such, home equity extraction could account for nearly all of the 66.7% (2/3) fraction attributable to consumer spending. Thus it is increased home equity extraction, not wages, that have maintained consumer spending, consumer demand, and GDP growth.

Consumer spending increases are necessary for continued economic growth. According to Bloomberg News, home equity extraction is expected to DECLINE $126 billion from $243 billion down to $117 billion in 2006. This would be a 52% decline, and a 52% decline in consumer spending power. This source of spending is nearly equal to all of our spending growth. With a 52% reduction in consumer spending power, spending would also decline 52%. If 2006 consumer spending remains 2/3 of of economic activity (and GDP), it would reduce our GDP growth by the same 52%. A 52% reduction in this year's 3.2% GDP growth would leave a 2006 GDP growth of only 1.54%.

Considering 2 straight years of declining real wages, there is no reason to think real wages will rise in 2006. As such, wages won't make up for the spending loss from decreased home equity extraction. Less consumer spending will result in less consumer production demand, less demand for workers to provide that production, and declining wages and employment as a result.

It definitely looks like we're in for a year of significantly slower economic "growth." How much slower remains to be seen. With a December Durable Goods Order decline of 10%, the biggest decline in 5 years, the economy is not looking good.


unlawflcombatnt

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Carl

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unlawflcombatnt said:
Considering 2 straight years of declining real wages, there is no reason to think real wages will rise in 2006.

Why not? One aspect of a growing economy, which ours is, is that hitherto unemployed people begin to enter the marketplace. In sufficient numbers, this incrementally skews the average (mean) wage calculation to the low end.

There will be fluctuations, therefore, in mean wages as a reflection of variations in economic growth and job creation. My understanding is that a record number of new jobs were created the last quarter.

In order to accurately assess skew, we'd need to compare the average (mean) to the middle (median) salary in order to identify skew. I can't see how that's been properly done here.

Current wages right now are about 6% higher in current dollars, average, than during the Clinton boom years of the 90's. I'd say that's a pretty good measure of where we're at.
 

SouthernDemocrat

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Carl said:
Why not? One aspect of a growing economy, which ours is, is that hitherto unemployed people begin to enter the marketplace. In sufficient numbers, this incrementally skews the average (mean) wage calculation to the low end.

There will be fluctuations, therefore, in mean wages as a reflection of variations in economic growth and job creation. My understanding is that a record number of new jobs were created the last quarter.

In order to accurately assess skew, we'd need to compare the average (mean) to the middle (median) salary in order to identify skew. I can't see how that's been properly done here.

Current wages right now are about 6% higher in current dollars, average, than during the Clinton boom years of the 90's. I'd say that's a pretty good measure of where we're at.

You could not be more wrong. I have posted this before, but since this crap still seems to come up, I suppose I should post it again.

Income is in 2004 CPI-U-RS adjusted dollars.

Median Household Income Decline under Bush:

Median Household Income in 2004: $44,389
Median Household Income in 2003: $44,482
Median Household Income in 2002: $45,062
Median Household Income in 2001: $46,058


Median Household Income Increase under Clinton:

Median Household Income in 2000: $46,129
Median Household Income in 1999: $45,003
Median Household Income in 1998: $43,430
Median Household Income in 1997: $42,545
Median Household Income in 1996: $41,943
Median Household Income in 1995: $40,677
Median Household Income in 1994: $40,217
Median Household Income in 1993: $40,422

Source: http://www.census.gov/prod/2005pubs/p60-229.pdf

Employment Rate under Bush:

2001: 4.7%
2002: 5.8%
2003: 6.0%
2004: 5.5%

Employment Rate under Clinton:

1993: 6.9%
1994: 6.1%
1995: 5.6%
1996: 5.4%
1997: 4.9%
1998: 4.5%
1999: 4.2%
2000: 4.0%

Source: http://www.bls.gov/cps/cpsaat1.pdf

Poverty Rate under Bush:
2001: 11.7%
2002: 12.1%
2003: 12.5%
2004: 12.7%

Poverty Rate under Clinton:

1993: 15.1%
1994: 14.5%
1995: 13.8%
1996: 13.7%
1997: 13.3%
1998: 12.7%
1999: 11.9%
2000: 11.3%

Source: http://www.census.gov/hhes/www/pover...v/hstpov2.html

If you will notice, the unemployment rate dropped every year that Clinton was in office and the median income rose every year as well. The median income has actually dropped every year Bush has been in office and the poverty rate has gone up. If partisan Republicans actually wanted less social spending, you would think they would get the basic economic principle that as the poverty rate drops, median income grows, and more people enter into the middle class, the need for social programs declines.
 

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SouthernDemocrat said:
The median income has actually dropped every year Bush has been in office and the poverty rate has gone up.

Those are interesting citations, thank you. So now we have a median to compare to the averages the other author provided. However, a shift in median to the low end will likely also occur if hitherto unemployed people enter the workforce in large numbers.

A meaningful analysis would require the construction of a distribution, so we could see if the shift is due to new people entering the measured workforce. In the absence of that, we have to look at other factors. Such as new home starts, etc. The factors that are mostly indicating a strong economy.

SouthernDemocrat said:
you would think they would get the basic economic principle that as the poverty rate drops, median income grows, and more people enter into the middle class, the need for social programs declines.

I'm unconvinced that any correlation exists, and the definition of "poverty line" is purely subjective. Though I am a hearty enthusiast for eliminating government social programs.

If only the Republicans that ran the House and Senate when Clinton was president still ran it today, we'd surely be in better shape.
 

SouthernDemocrat

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Carl said:
Those are interesting citations, thank you. So now we have a median to compare to the averages the other author provided. However, a shift in median to the low end will likely also occur if hitherto unemployed people enter the workforce in large numbers.

A meaningful analysis would require the construction of a distribution, so we could see if the shift is due to new people entering the measured workforce. In the absence of that, we have to look at other factors. Such as new home starts, etc. The factors that are mostly indicating a strong economy....

The numbers I posted completely refuted your hypothesis. During the nineties, huge numbers entered the workforce as evidence by the sharp and consistent decline in the unemployment rate, yet median income rose every single year.

I am not saying that this is empirical evidence that the Clinton era economic policies are the reason for that, although it would hint at that, but rather I am saying that the empirical evidence refutes your hypothesis.

Moreover, it is simply common sense that as median income rises and the poverty rate drops, there is less of a need for social safety net programs.
 

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SouthernDemocrat said:
The numbers I posted completely refuted your hypothesis.

I don't see how, I was speaking to "average" (mean) income, not "middle" (median) income. They could both go down, it's the distance between them that lends the necessary information. I never claimed median was up, only that it was missing.

A skew to the low end doesn't necessarily indicate either good or bad economic news. It could indicate great news.
 

SouthernDemocrat

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Carl said:
I don't see how, I was speaking to "average" (mean) income, not "middle" (median) income. They could both go down, it's the distance between them that lends the necessary information. I never claimed median was up, only that it was missing.

A skew to the low end doesn't necessarily indicate either good or bad economic news. It could indicate great news.
Average income is the most misleading statistic one can use. For example, if income greatly increases at the top say 5%, yet remains flat or decreases for everyone else, then because of the distribution of wealth and income in our nation, average income would actually go up.

The only meaningful numbers in terms of actually prosperity in the economy are the employment numbers, median income, GDP, and the poverty rate. From those one can determine actual prosperity and who is sharing in it.
 

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SouthernDemocrat said:
Average income is the most misleading statistic one can use. For example, if income greatly increases at the top say 5%, yet remains flat or decreases for everyone else, then because of the distribution of wealth and income in our nation, average income would actually go up

Precisely. And if a whole ton of formerly unemployed people entered the marketplace, the average would go down. And the median would shift to the low side as well, most probably. In statistics, you need both values to determine anything useful.

In any case, there are many more problems with judging "actual prosperity" based on a single set of statistics. Especially average or median wages.
 

SouthernDemocrat

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Carl said:
Precisely. And if a whole ton of formerly unemployed people entered the marketplace, the average would go down. And the median would shift to the low side as well, most probably. In statistics, you need both values to determine anything useful.

In any case, there are many more problems with judging "actual prosperity" based on a single set of statistics. Especially average or median wages.

But I posted the statistics. Durring the nineties, significant numbers entered the workforce, yet median income still went up every year. Today, while unemployment numbers are low, they are still not as low as the reached in the ninties, yet median income has went down every year.

To be honest with you, I really dont see how you are refuting that.
 

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SouthernDemocrat said:
Today, while unemployment numbers are low, they are still not as low as the reached in the ninties, yet median income has went down every year.

To be honest with you, I really dont see how you are refuting that.

I'm not refuting anything at the moment, because I don't know what I'm supposed to refute. The movement of median and average could have just as much to do with changes in the distribution of wealth as anything else. In other words, the shape of the bell curve would deviate from a perfect distribution.

A shift of the median downward could easily indicate many more poor people rising into the middle class, it just depends. It's one of many possible statistics. I simply do not accept that this single statistic, or the average wage statistic, in a vaccuum indicates anything.

The effective unemployment rate during the entire period you cite for both presidents is 6% or lower, which is effectively full employment. The poverty line is purely arbitrary.

I'm just not seeing how either median or average wage tells the whole story, or is a reason in and of itself for either joy or apprehension.
 

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Carl said:
I'm not refuting anything at the moment, because I don't know what I'm supposed to refute. The movement of median and average could have just as much to do with changes in the distribution of wealth as anything else. In other words, the shape of the bell curve would deviate from a perfect distribution.

A shift of the median downward could easily indicate many more poor people rising into the middle class, it just depends. It's one of many possible statistics. I simply do not accept that this single statistic, or the average wage statistic, in a vaccuum indicates anything.

The effective unemployment rate during the entire period you cite for both presidents is 6% or lower, which is effectively full employment. The poverty line is purely arbitrary.

I'm just not seeing how either median or average wage tells the whole story, or is a reason in and of itself for either joy or apprehension.

  • Poverty rate statistics are not purely arbitrary in the scope of this debate because the federal government calculates the poverty rate the same way today as it did during the nineties so in that regard it is an apples to apples comparison.
  • Your averaging of employment rates only serves to muddy the debate. During the nineties, the Clinton Administration inherited an unemployment rate that was nearly 9%. It dropped consistently every year. The Bush Administration still has reached an unemployment rate as low as the one they inherited.
  • Although I did not include it in the three statistics I cited, average income rose during the 90s as well. In fact, income growth at the top bracket rose at a higher rate than it has during the last 5 years. Anyway one slices it, while the income is strong today, it was stronger during the nineties, and more people enjoyed that prosperity than today.
Why do you think that even though the economy is growing strong today, when polled, people are still very apprehensive about it? It’s not some big “liberal media conspiracy”. It’s simply that even though the economy is growing at a healthy rate, the average Joe doesn’t feel as though he is doing any better and the governments own labor and economic statistics seem to back up his assertion.
 

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SouthernDemocrat said:
It’s not some big “liberal media conspiracy”.

Well, yes, it is. Liberals paint everything in gloom-and-doom terms. Can't even report an 11,000 point market without qualification. Home ownership is at record highs....but only because everyone is in hock up to their ears. Everyone is buying bigger houses than before....see, we told you it's because their spending too much. Yada, yada, yada.

I think it's pretty clear there's a huge disconnect from reality on the part of the media.
 
T

The Real McCoy

Yes, it's all Bush's fault. Forget Congress, forget the Fed, forget the dot.com bubble burst and the plummet of the stock market in 2000, forget 9/11, forget the fall of the airline industries, forget the exponential rise in demand for oil from China and India, forget Katrina, forget the hundreds, probably thousands of countless outside variables on the economy and tag whatever negative economic news there is on George W. Bush.
 

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Carl said:
Well, yes, it is. Liberals paint everything in gloom-and-doom terms. Can't even report an 11,000 point market without qualification. Home ownership is at record highs....but only because everyone is in hock up to their ears. Everyone is buying bigger houses than before....see, we told you it's because their spending too much. Yada, yada, yada.

I think it's pretty clear there's a huge disconnect from reality on the part of the media.
Wow, you might actually have a point if practically every year for the past 50 years home ownership was not at record highs.

When I get up in the morning and get my coffee I usually turn on CNN or occasionally my local Fox affiliate to get the morning news. Every morning I hear on the business report the jobless rate is low and usually, the stock market is up. This I might I might remind you is with CNN, its almost always economic optimism. I then get in my car, make my 10 minute drive into the office, and on the way usually catch the morning marketplace report on NPR. There, on NPR, I hear about low unemployment and strong markets. Almost always economic optimism.

After I get to work, I generally make my morning bathroom run at some point before lunch, and almost always without exception, there is a copy of the Wall Street Journal there in my favorite stall. I usually skim it, where it read that unemployment numbers good, the markets are strong, but that consumer debt is at all time highs. This of course makes sense being that consumption is over 2/3rds of the economy and that median income has been flat so people are borrowing more to sustain all the spending that fuels our economy. I doubt though, that most people would consider the Wall Street Journal part of the “liberal media conspiracy”. My point being that I don’t think its doom and gloom in terms on economic reporting that is the reason why so many when polled are not optimistic about the economy. Reason being is that most the economic reporting is optimistic. Instead, I think, and the statistics seem to back up my assertion, that its simply that the average joe is just not doing any better today than he was 5 years ago and quite possibly, he is doing a little worse. If things are going great, you are not going to convince people that they are not. If things are going not so great, you are not going to convince people that they are going great. Most people are not partisan hacks. They are simply people who go to work every day and look forward to some cold beer and golf or fishing on the weekends. If things are going great in terms of their household economics, then they feel good about the economy. If things are not going so well, then they don’t feel so good about the economy. No one can spin that for them.
 

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The Real McCoy said:
tag whatever negative economic news there is on George W. Bush.

Yep, but first take all news of whatever sort and find a way to show how it's bad.
 

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SouthernDemocrat said:
If things are not going so well, then they don’t feel so good about the economy. No one can spin that for them.

I'm afraid I have to reject that out of hand. The media accused George Bush of "talking down the economy" back during the 2000 campaign when he was simply pointing to the legitimate signs of a looming recession, which did in fact obtain.

Everyone was feeling pretty darn high-on-the-hog then, due to the consistently favorable spin and failure to report the truth of the matter. The opposite is what we experience now.
 

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Carl said:
I'm afraid I have to reject that out of hand. The media accused George Bush of "talking down the economy" back during the 2000 campaign when he was simply pointing to the legitimate signs of a looming recession, which did in fact obtain.

Everyone was feeling pretty darn high-on-the-hog then, due to the consistently favorable spin and failure to report the truth of the matter. The opposite is what we experience now.

Yeah, or it could be that your gut feelings are wrong and the government statistics are right and people were doing better then than they are today. I am not saying that it is either because of or in spite of the Bush Administration Economic policies. I am merely stating that I don’t know how someone could argue with the governments own labor and economic numbers.

Personally, I think presidents get to much credit when the economy is doing well and too much blame when the economy is doing badly. Economic growth is cycle. We have had growth after tax increases and recessions after tax cuts. We have had booms and recessions under Republicans and Democrats. No one wakes up the day after and election and thinks “well a Republican won so I am not going to give my employees a raise this year” or “well a Democrat won so I am going to go out and buy a new car”. It just doesn’t work that way. One could argue with a great deal of empirical evidence that the federal reserve influences economic growth, but they would have a hard time of making an intellectually honest argument that any president’s economic policies have much to do with the economy one way or the other.

Finally, Bush has abysmal approval ratings because most people think he does a poor job governing. Clinton and Reagan had great approval ratings because most people liked the job they were doing. It’s that simple. If Clinton or Reagan were president right now they would have good approval ratings. The Bush Administration is good at politics, which is why they marginally win elections, but does a pretty crappy job at actually governing which is why his approval ratings is so low despite the strong economy. You guys on the far right always talk about “personal responsibility” but you guys never take responsibility for any of your failings. It’s always someone else’s fault. You have all three branches of government, so now you have to blame all your failings on some media conspiracy instead of taking responsibility for them. Just like the liberals, you have this view of the world that’s full of “if only…”, but lacking in any and all pragmatism and realism.
 

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SouthernDemocrat said:
Yeah, or it could be that your gut feelings are wrong and the government statistics are right and people were doing better then than they are today.

You already know that I don't agree your numbers show that at all. All the signs are that the economy is cooking along nicely. What you are posting, and what this thread is based on, is just more of the negative spin.

I think that the numbers, and reality, show the strength of a growing, robust economy. The only place that's not being reflected is in the media, and the gloomy pronouncements of liberals and Democrats seeking new methods to harm the administration, whom they hate.
 
T

The Real McCoy

SouthernDemocrat said:
I am merely stating that I don’t know how someone could argue with the governments own labor and economic numbers.

Because those statistics merely illustrate coorelation, not causation.



SouthernDemocrat said:
Personally, I think presidents get to much credit when the economy is doing well and too much blame when the economy is doing badly.

Agreed. 100%.



SouthernDemocrat said:
You guys on the far right always talk about “personal responsibility” but you guys never take responsibility for any of your failings. It’s always someone else’s fault.

Volumes can be (and have been) written on the hypocricy and double standards of both ends of the political spectrum. This is a symptom of human nature, not right wing ideology.
 

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The Real McCoy said:
Because those statistics merely illustrate coorelation, not causation.





Agreed. 100%.





Volumes can be (and have been) written on the hypocricy and double standards of both ends of the political spectrum. This is a symptom of human nature, not right wing ideology.

We are agreed on all three points.
 

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unlawflcombatnt said:
Though nominal wages have increased 3.5% over the last year, when adjusted for inflation they have DECLINED 0.6%. January's real (inflation-adjusted) hourly wage was $8.18/hour (in 1982 dollars). This is a -0.6% change since January 2005's $8.23/hour. Worse still, this is a DECLINE of 1.1% since January 2004's $8.27/hour.


Over the last 2 years, consumer spending increases have been sustained through increased borrowing alone. Home equity extraction for 2005 was $243 billion, according to Bloomberg News Home equity extraction would account for 63.3% of our economic growth in 2005. As such, home equity extraction could account for nearly all of the 66.7% (2/3) fraction attributable to consumer spending. Thus it is increased home equity extraction, not wages, that have maintained consumer spending, consumer demand, and GDP growth.

Consumer spending increases are necessary for continued economic growth. According to Bloomberg News, home equity extraction is expected to DECLINE $126 billion from $243 billion down to $117 billion in 2006. This would be a 52% decline, and a 52% decline in consumer spending power. This source of spending is nearly equal to all of our spending growth. With a 52% reduction in consumer spending power, spending would also decline 52%. If 2006 consumer spending remains 2/3 of of economic activity (and GDP), it would reduce our GDP growth by the same 52%. A 52% reduction in this year's 3.2% GDP growth would leave a 2006 GDP growth of only 1.54%.

Inflation = devaluation of the dollar.
Devaluation of the dollar is directly proportional to the number of dollars introduced by our privately owed central banking monoply, the FEDERAL RESERVE. Through the authority granted to it in 1913, the FED produces money at will through the purchasing of government debt, and lending to foreign nations, with money that doesn't exist. This government guaranteed debt is considered an asset to the FED, which then multiplies it through the magic of fractional reserve banking by nearly a factor of ten to its member banks through the discount window. The banks then multiply this new currency by nearly another factor of ten through consumer lending. In fact, every dollar in existance has been created by debt in this same fashion.
Your dollars have absolutely no value, an can only be forced upon us through legal tender laws.

Given the consumer and government debt that has been driving the economy for years, it is not difficult to understand the devalued dollar(inflation). Why just a short time ago, Greenspan himself was encouraging homeowners to refinance to variable rate mortgages. Now the FED is scrambling to controll the monster it created by raising interest rates.(difficulty acquiring financing).
This same activity has been responsible for every economic bust since the FED's inception. We are beginning to feel the crunch. You can expect the FED to praise the market and the economy right up to the eve of the next crash, just as it did in 29

Now when average americans start losing their homes because they can't keep up with the results of the perpetual refinancing games encouraged by the banks, guess who owns the property ? The Banks

Billions in profits collected in the form of interest, from loaning money that doesn't exist. Billions in profits from forclosures, captured property and equity. Inflation rising out of proportion to earnings. A quadrupling in the money supply since the eighties. Over one thousand percent inflation since 1913. This is the legacy of the FED, an institution fully endorsed by both parties, quietly controlling our elected officials, and rapidly redistributing our wealth to the elite.

Please do not fall into the trap of blaming one party or the other.
Follow the real money trail.
Here are a few suggestions to start with.

David Rockefeller, head of the NY branch of the FED ( the controlling branch)
Council on Foreign Relations ( most every cabinet sec and pres since 1960's)
Trilateral Commission (A few notable members Carter, Bredzinski, Mondale, D. rockefeller G Bush Sr. )
Read into the history of each and you might find a few surprises.
 

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Urethra Franklin said:
Of course real wages are declining. The capitalist system is failing.


The government won't let that happen, they'll pump in billions and billions of dollars more for capital welfare. You can take that to the bank...:rofl
 

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taxedout said:
Inflation = devaluation of the dollar.
Devaluation of the dollar is directly proportional to the number of dollars introduced by our privately owed central banking monoply, the FEDERAL RESERVE. Through the authority granted to it in 1913, the FED produces money at will through the purchasing of government debt, and lending to foreign nations, with money that doesn't exist. This government guaranteed debt is considered an asset to the FED, which then multiplies it through the magic of fractional reserve banking by nearly a factor of ten to its member banks through the discount window. The banks then multiply this new currency by nearly another factor of ten through consumer lending. In fact, every dollar in existance has been created by debt in this same fashion.
Your dollars have absolutely no value, an can only be forced upon us through legal tender laws.

Given the consumer and government debt that has been driving the economy for years, it is not difficult to understand the devalued dollar(inflation). Why just a short time ago, Greenspan himself was encouraging homeowners to refinance to variable rate mortgages. Now the FED is scrambling to controll the monster it created by raising interest rates.(difficulty acquiring financing).
This same activity has been responsible for every economic bust since the FED's inception. We are beginning to feel the crunch. You can expect the FED to praise the market and the economy right up to the eve of the next crash, just as it did in 29

Now when average americans start losing their homes because they can't keep up with the results of the perpetual refinancing games encouraged by the banks, guess who owns the property ? The Banks

Billions in profits collected in the form of interest, from loaning money that doesn't exist. Billions in profits from forclosures, captured property and equity. Inflation rising out of proportion to earnings. A quadrupling in the money supply since the eighties. Over one thousand percent inflation since 1913. This is the legacy of the FED, an institution fully endorsed by both parties, quietly controlling our elected officials, and rapidly redistributing our wealth to the elite.

Please do not fall into the trap of blaming one party or the other.
Follow the real money trail.
Here are a few suggestions to start with.

David Rockefeller, head of the NY branch of the FED ( the controlling branch)
Council on Foreign Relations ( most every cabinet sec and pres since 1960's)
Trilateral Commission (A few notable members Carter, Bredzinski, Mondale, D. rockefeller G Bush Sr. )
Read into the history of each and you might find a few surprises.

I'm not sure that this (the Fed purchasing Govt debt) is the most accurate description of how the Fed tries to control the money supply. I think its primary tools are adjustments to the fed funds rate (which it usually uses) or the reserve banks must hold (hardly ever used).

I believe most Govt debt is owed to third parties (private citizens and foreign governments) and intra government loans to trusts like the SS and govt pension trusts.

What is the value of the Govt debt held by the Fed?

I don't believe the Fed lends much money to foreign government, it lends money to member banks of the Federal Reserve system. These banks lend it to other banks and whomever they deem appropriate.

You can point to certain actions of the Fed that may be criticized -- in the 70s the Fed focused its policies on employment by keeping interest rates too low, leading to an over-expansion of the money supply and inflation, which was only checked by a reverse in policy by Volker (appointed by Carter) who slammed the brakes on money supply growth which caused a temporary spike in interest rates. Certainly monetary policy in the 1930s can be questioned, I believe there was criticism that the money supply was held too tightly, exacerbating the recession, but I am not as familiar with that.

But since 1979, IMO the Fed as done a fair job of keeping inflation under control (its primary goal) while letting the money supply expand to help economic expansion within the constraints of its primary goal.

Rampant inflation is harmful to the economy, but what is the argument that a moderate amount of inflation (~<2% per year) is particularly harmful?
 

Calm2Chaos

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The economy is doing horrible. My salary only increased 18% in 16 months and my commision from B2B sales only increased 20%. As much money as companies are spending they must really be in trouble......................Sorry I am being sarcastic. I have no doubt the countries failing the economy is failing it's all the presidents fault and the world os going to end....But the increases were real.....
 
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