12th April 2023, 10:44 AM
As I said, I've heard of the 'we need to increase jobless numbers in order to slow down inflation' argument, but I am pretty sure that their goal is not to increase homelessness much but instead to make people look for new jobs. I don't get economics enough to remember offhand why they say that high employment is bad, but it clearly is something the Fed believes...
I agree with the goal of slowing down inflation, the rate of increase of basic good such as food and housing is horrible. How do we do that? I don't know. "Let's hope more people get fired, that'd be good for the economy" seems like an odd way to reduce inflation, but I'm not good enough at economics to know if it'd work or not... but given that employment is generally probably more positive than negative it's not something they should try to cause, I would think.
Also, even though obviously much higher taxes on the rich are necessary, that's not something the Fed can do. Only congress can change tax law and the Republicans in the House sure aren't going to do that. Basically all the Fed can do is adjust the one lending rate they have control over and see what that does to the economy...
I agree with the goal of slowing down inflation, the rate of increase of basic good such as food and housing is horrible. How do we do that? I don't know. "Let's hope more people get fired, that'd be good for the economy" seems like an odd way to reduce inflation, but I'm not good enough at economics to know if it'd work or not... but given that employment is generally probably more positive than negative it's not something they should try to cause, I would think.
Also, even though obviously much higher taxes on the rich are necessary, that's not something the Fed can do. Only congress can change tax law and the Republicans in the House sure aren't going to do that. Basically all the Fed can do is adjust the one lending rate they have control over and see what that does to the economy...