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Politics : View from the Center and Left

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To: Steve Lokness who wrote (239916)	12/15/2013 12:34:03 PM
From: bentway	Read Replies (1) of 542148

"So by doing nothing interest rates kept going up." You show a total ignorance of the history. Interest rates going up was due to the Volker "medicine" to conquer inflation - not due to Carter inaction. Volker jacked up the interest rates to FIGHT the inflation. en.wikipedia.org "The Federal Reserve board led by Volcker is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was lowered to 3.2% by 1983. [14] The Federal Reserve board led by *Volcker raised the federal funds rate*, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well. Thus, the unemployment rate became up over 10%. The economy was restored since the tight-money policy was over in 1982. According to William Silber [15] "His policy of preemptive restraint during the economic upturn after 1983 increased real interest rates and pushed Congress and the president to adopt a plan [the 1985 Gramm-Rudman-Hollings bill] to balance the budget. The combination of sound monetary and fiscal integrity sustained the goal of price stability."" So, Steve, you don't even seem to understand what you lived through.

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