What do You think about the Federal Reserve Controlling Interest Rates&keeping Millions in the US Unemployed?

Question

By raising and lowering interest rates, the Fed can control unemployment. They even go as far as keeping millions of Americans out of work in order to stem off inflation. This tactic is also used to keep downward pressure on wages. If too many Americans have jobs, there will be too much pressure on employers to raise wages and offer more benefits. If they didn't then their employees would most likely just find work elsewhere if they didn't feel as though they were being fairly compensated. To date, no economist has been able to come up with another way to stem the tide of inflation. But does that make it right? When interest rates are higher, there's less economic activity, no one buys cars or houses and businesses hire less. But the jobs are low wage jobs, so it's not the doctors, lawyers, and CEO's who are getting hurt, it's the janitors, dish washers, cashiers, etc. who feel the squeeze. Any thoughts

If you're interested in finding out more, please read "The Conservative Nanny State: How the Rich Use the Government to Stay Rich and Get Richer" Or visit Http://www.ConservativeNannyState.org

The Unemployment rate in the US is actually higher than the reported 4.5-5%. Those numbers are only compiled every few weeks. The TRUTH is that the US unemployment rate does NOT include those who have never applied for unemployment benefits, nor does it include those whose benefits have run out either.

I am by no means an economic expert, however, I understand that when interest rates are high, the economy slows and when they're low it picks up. Look at the people who are making the money, stockholders as you said. But how many people own stock and at what expense are they making money? At the expense of keeping millions of Americans unemployed and living in poverty.

Jeepers Peepers could not be MORE WRONG! The US unemployment rate DOES NOT COUNT those whose benefits have run out or those who have never applied for unemployment benefits. I have an email from the US Department of Labor and would be happy to send it to anyone who is interested in the TRUTH!

Answer 1

I'm guessing when you asked the question around three EST you had mostly the investor class online with their standard "trickle-down" economic perspective. I was working my blue collar job and am now home cooking dinner...your analysis is rock solid...downward pressure on wages was always the target with Greenspan and still is the case... I know people who have had their unemployment run out so they don't count in statistics.

Answer 2

America has an excellent unemployment rate. I agree with you that we could do more to make more jobs available, but if you think unemployment is such a huge problem here, could you care to compare it to some other country with a much better rate? Probably not - a 5% unemployment rate is considered a "labor shortage." Like you said, it contributes to wage increases and inflation because companies who want to expand are forced to choose employees from an increasingly small part of the population and those people may not have the exact skillsets they want. The main political way to end this shortage hasn't been to intentionally increase the unemployment rate, it has been the attempt to allow illegal immigrants in.

Fighting inflation is easy: government makes things more expensive. Taxes, regulations, subsidies, bureaucrats, these all cost money and its either taken out of the consumer's paycheck or added to the price of the final products. Raise interest rates so demand for the currency goes up, end budget deficits and trade deficits and suddenly all the downward pressure on the dollar goes away. But like you said, this reducing borrowing and overall economic activity, maybe even hurt job growth. There is no simple one-size solution. In economics, all decisions usually come with an opportunity cost, that is, whatever you gave up when you decided to pursue one course over another.

Answer 3

Why do people still beleive the myth that the US unemployment rate does not count those who never applied for benefits, or those whose benefits have ran out ?

Have they ever taken the time, to actually go to the Labor department webpage and read how the unemployment rate is calculated ?

Well evidently not, or they would know, that it is calculated from a monthly survey.

And not from the number of people who are collecting unemployment.

So just who do you think should set the rate, at which banks borrow money from the US Government ?

The Government set up the Fed to handle that.

Who would you replace them with ?

Answer 4

Jeepers Peepers is entirely correct. Unemployment figures are NOT computed by looking at who is receiving benefits. It has nothing to do with benefits, or them running out or never applying for them. I invite you to look at the link below from the Bureau of Labor Statistics that shows exactly how unemployment figures are computed. It's done with a monthly survey of 60,000 households. Since you seem to need extra proof to believe the actual TRUTH, I've also linked to the original document authored by Robert B Reich, Secretary of Labor, dated 1994.

I would like you to email me a copy of that email though. i'd like to follow up with that person who wrote it and ask why they don't know how their own Department computes unemployment.

As for your main question, the Feds principal job is to give us a stable money supply. After that is achieved, their secondary purposes is to aid the economy, but only when it doesn't conflict with goal #1.

You complain the Fed causes unemployment. It's minor compared to the unemployment that would result from the economic consequences of hyper inflation, or deflation.

Tough economic times do hurt the lawyers and CEOs. CEOs don't get their big bonuses from increasing stock prices. Lawyers don't get their fees from working on business deals.

Answer 5

I am not entirely sure you understand what unemployment really represents. Nor do I think you really understand the role of the Federal Reserve.

Raising and lowering the interest rates are to stimulate or slow down the economy. Employment is only one aspect of that. Production, consumer confidence, banking, loans, stock markets, the price of bread, they are all other aspects and effects changes in the prime rate.

Your question could just as easily been: What do you think about the Federal Reserve controlling interest rate, and making stockholders rich?

Answer 6

I believe what you say. it extremely is a "legal" scandal that has been occurring on condition that 1913. i think of maximum individuals are purely naive sufficient to have self belief that through fact this is been in place that long, it would desire to be ok. I even have certainly heard that the dollar has depreciated one thousand% on condition that 1913. What replaced into $a million.00 back then is now extra beneficial than $one thousand.00. I even have additionally heard that wealthy Ashkenazi Jews own and administration the Fed (the Rothschilds, and so on.)

Answer 7

yeah more commie clap trap.
5% unemployment is nothing. many are welfare slobs that don't want to work in the first place.

commies and their propaganda.

so more jobs means higher wages? uh moron, it's the other way around. less WORKERS means higher wages to draw in the qualified employee.
again more commie clap trap.

how about your lefty bud georgina opensoros? why not rail against his billions from currency trading that almost destroyed the malaysian economy among others? oh yeah cause he's a lefty!!!!

if you're interested please read "Welfare for the rich leftists"

Answer 8

I trust them more than I do some of my creditors.