Normally this kind of thread is posted in 'Finance', but you're new, so I'll allow it to stay a day or two, then to Finance.You raise some good questions but I'd like you to look into QE Infinity before I go any further.
As interest rates creep up, we "inflate" our way out of BO's mess... at the cost of every retiree.I cannot imagine the economy going so strong, and government ever reining in spending ... they can't even balance a budget for a year, how could they ever pay down existing debt!? I'm inclined to say, "There are no simple answers..." - but actually there is, the size and scope of government *must* be reduced, even halved, for starters. Workfare instead of Welfare - people need a change of heart, a will to work, instead of retire at 20yrs into the welfare system. The private, "Religious Sector" did a better job handling the disadvantaged, disabled, drunks and down-on-their-luck types. Local ministries were able to hold individuals accountable - the government just can't do the job effectively. Reduce the outflow of benefits from the Federal Government, let the State & Local governments do their jobs - encourage them to do so.The idea of importing "people" and dumping them into states, without "OKing" any local approval (or vote), is something a Tyrant does.I'd love Trump to turn it on it's head, and declare federal preserves both Obama and Clinton set aside as "Refugee Settlement Areas".With 20Trillion in debt, sucking more dollars out of the economy, or trying to print our way out, or reduce the debt through inflation - all been tried before, and miss the real power of the economic powerhouse that made America a great nation. IMO - the longer dollars stay in the public sector, the greater economic activity, and thus the greater the inflow of taxes.
Solar ... I spent a few hours looking at this. It's such a shell game and the guys moving the shells move them pretty fast!
So on QE Infinity ... my take is that QE has officially ended (stopped the $40B per month purchases) but the Fed continues the practice at a pace of about $100M per year as the feds continue buying securities with interest on the original securities ... that were generated out of thin air. So - pretty dishonest and I don't know why we don't hear about it. I can't verify that this is really going on, but some sites indicated that it is.
This is a very complex system that we've messed with. An unstable equilibrium is when a system is on the precipice of falling apart (going unstable). Like holding a marble on top of a bowling ball - you can do it, but it takes constant attention - and if the marble gains too much inertia it will roll off no matter what you do. QE may have setup for such a massive earthquake, we won't survive if the marble falls off.
What is to be done? It seems that we should start simple. Establish a budget and keep it. Try to keep the debt from growing. And diffuse the QE to an end - not too abrupt as to dump the marble fast. Then we could start selling back the securities over some amount of time. That should be more feasible if our economy actually starts producing something of value again - if real GDP rises.
I'm for a free market, but we've mucked with it now and have to try and coach the marble into a stable condition without having it fall on the floor. At some point, we need to let the market go again and take our lumps. You'll probably disagree with continued futzing, but it is true that we do things like build dams that control water so we can get a desired result. At this point, we've built a giant dam with a ton of financial pressure behind it and if we just breach the dam it will be a complete disaster. Better to let the water off slow and take the dam down a foot at a time. It may still breach, but we should at least try to let the pressure off easy.
Whenever it goes, the administration at the time will take the hit. God forbid it happens now for then I fear we'll see something worse than the Great Depression and those currently defending our Republic will take the blame even though they inherited the greatest economic mess of all time based on what Bush and BO did to our debt and monetary position vie QE.
Ok ... so that's how I've filled in from my oh-so naive and limited understanding of the financial system. Am I too doom and gloom here? What do think is going on under Trump?
This probably should move under financial ... how do I get it moved over?
...start paying down the debt?...