Which Mistake Would The Fed Prefer To Make?
Real Vision: Finance & Investing
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The Negative Effect of the Debt Ceiling on Growth
When a large portion of return goes into the hands of those who consume very little, what winds up happening is you don't have the kind of stimulative effect to growth. When it's going to people who are essentially making money, I guess the old fashioned word is the rentier class, make money on rents and basically clipping coupons from bonds,. You have this procyclical effect where you get even more asset price inflation as a consequence of that earning. It turns out to be a positive feedback loop that can be very negative for the economy. So right here we've had quite a big stimulus to markets. The debt ceiling represents a restriction on federal borrowing, but it doesn't necessarily represent
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