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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: jttmab who wrote (198300)	8/20/2006 3:30:50 PM
From: geode00	Read Replies (1) \| Respond to of 281500

If the US was in danger of a recession the Fed would be reversing on interest rates. They seem to have stopped for the time being but who knows? There is always stagflation, the worst of both worlds which is generally what the Bushies deliver to us. For example, they delivered a 'war on terrorism' which provides us both a war AND more terrorism. They delivered us a Medicare bill which provided both hugely inflated costs AND lousy coverage....I'm still waiting for the 'doughnut hole' to hit right before the midterms. :) Stagflation Worries in the Present "As of 2006, certain economists belive that global stagflation may be making a comeback with the price of oil well over $70 a barrel, the US Federal Reserve incrementally increasing interest rates, and employment rates stagnant. Fears of stagflation began getting attention on blogs before becoming more mainstream with statements by Stephen Roach and Paul Krugman. They cite a rapidly cooling housing market combined with a failure to adjust monetary policy as potentially leading to higher than "comfort zone" inflation with below trendline growth. That is, a mild form of stagflation, compared with the sometimes double digit inflation and recession that occured in some countries in the early 1970's." en.wikipedia.org "Stagflation. A combination of economic inflation and industrial recession, during which consumer prices rise but business output falls. This is often accompanied by rising unemployment at businesses cut back. A recent example of stagflation was in the U.S. during the 1970s, when rapidly-rising oil prices pushed consumer prices up sharply but caused businesses to cut back production." garyascott.com