Back in the ancient times of Q4 2012 (ahead of the election) the White House kept telling us that the economy is booming.
The Fed has kept overnight interest rates near zero since late 2008 and it has tripled its balance sheet to about $3 trillion through its purchases of securities, which are aimed at pushing longer-term borrowing costs lower. However, the recovery from the 2007-2009 recession has been stubbornly tepid. A report on Wednesday showed the economy unexpectedly contracted in the fourth quarter
This contraction was due to the Obama administration frontloading defense spending in Q3 to boost that quarter’s GDP. It just so happened that Q3 GDP figures were released a week before the election.
Fast forward to today and Q4 comes out showing the contraction which Obama then blamed on defense spending cuts, in part, saying those cuts were part of the sequestration agreed to as part of the fiscal cliff deal. I guess we’re all supposed to be too stupid to figure out sequestration isn’t scheduled to begin until the start of Q2 2013 and that the fiscal cliff deal was only reached a couple weeks ago in Q1 2013. Of course not a peep out of our shameless media class.
“has tripled its balance sheet to about $3 trillion through its purchases of securities”
That’s like saying I’ve paid off my credit card debt by putting it on my other credit card, then bizarrely, declaring that the 2nd credit card debt is an asset and not a liability.