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AT: FRB Solves EconomyFRB out of tools to boost the economy Morici, 6/11 --- economist and professor at the Smith School of Business, University of Maryland (6/11/2012, Peter, “Federal Reserve has few options as economy flirts with 'double dip' recession,” http://www.foxnews.com/opinion/2012/06/11/federal-reserve-has-few-options-as-economy-flirts-with-double-dip/, JMP) The US economy is drifting toward recession, but when Federal Reserve policymakers meet next week on June 19 and 20, they will have few tools to turn things around. Jobs creation slipped to alarmingly low levels in April and May. Wages, which were rising modestly through most of the recovery, have been virtually flat for three months. An already tough labor market for both job seekers and the employed is getting worse. First quarter productivity was down sharply, indicating businesses have more workers than needed to meet demand and must soon lay off employees if sales don’t pick up. However, deteriorating conditions in Europe and China, and falling values for the euro and yuan against the dollar, indicate US exporters and import-competing businesses will face tough environment this summer.
When the Federal Reserve Open Market Committee last met on April 25 more bond purchases to lower long-term Treasury and mortgage rates were on the table. Since then, investors moved cash from risky European government bonds to US bonds. This has pushed 30-year Treasury and mortgage rates to near record lows, preempting the effectiveness of any additional Fed initiatives. A statement that the Fed intends to keep short rates near zero beyond 2014 would have little effect on investor and home buyer psychology—already, no one expects the Fed to push up interest rates in the foreseeable future. Central bank policy can help dampen inflation when the economy overheats and lift borrowing and home sales a bit when it falters, but it can’t instigate faster growth when the president and Congress fail to address structural problems. FRB can’t boost growth now Goldfarb, 12 --- staff writer covering the White House, focusing on President Obama's economic, financial and fiscal policy (6/11/2012, Zachary A., “With crisis rooted in Europe, U.S. less vulnerable but has less flexibility to act,” http://www.washingtonpost.com/business/economy/with-crisis-rooted-in-europe-us-less-vulnerable-but-has-less-flexibility-to-act/2012/06/11/gJQA3GujVV_story.html, JMP) The Fed is also more constrained than it was in 2008. Then, it could use its principal weapon — control of an interest rate that sets the benchmark for most banks — to encourage more lending and economic activity. It also has taken a range of unconventional actions to support growth. But the Fed’s benchmark interest rate is now near zero, and its tool kit is not as effective as before. One of the most important changes from 2008 is that the major drags on the U.S. economy come from abroad. The world’s four major developing countries — Brazil, Russia, India and China — have also showed signs of economic weakness recently. They are growing fast but slower than many economists anticipated.
Make no mistake, none of these are silver bullets, but they do highlight an important point with respect to differences among states and municipalities in the U.S. today. While some states and cities are ambitiously pursuing innovative sources of infrastructure finance—such as partnerships with private and foreign investors—many others are not. For example, only 24 states undertook at least one public/private partnership transportation project since 1989. Florida, California, Texas, Colorado, and Virginia alone were responsible for 56 percent of the total amount of all U.S. transportation PPP projects during this time. Fragmented nowNIB is key to synthesize exiting transportation funding programs and attract investors—current implementation is too fragmented to be effective Trottenberg 11-MA in Public Policy @ Kennedy School of Government, Harvard, Assisstant Secretary for Transportation Policy-US Department of Transportation, Executive Director of Build America’s Future [Polly, Congressional Documents and Publications, (congressional testimony) “Senate Commerce, Science and Transportation Committee Hearing: ‘Building American Transportation Infrastructure through Innovative Funding,’” July 20, 2011, http://commerce.senate.gov/public/?a=Files.Serve&File_id=19217555-56ac-46b6-aada-91b60cc1e352, DKP] The infrastructure bank is one of the most promising ideas for leveraging more private sector dollars into infrastructure and has generated support from leaders here in Congress, including the Chair and Ranking Member of this Committee, Senators Lautenberg, Warner and Kerry and Representatives DeLauro and Ellison. President Obama has been a long-time supporter and the Administration's budget for Fiscal Year 2012 requests $5 billion for a new national infrastructure bank. This is the first year of a six-year plan to capitalize the bank with $30 billion. The infrastructure bank, which would provide grants, loans, loan guarantees or a combination thereof to the full range of passenger and freight transportation projects in urban, suburban and rural areas, marks an important departure from the Federal Government's traditional way of spending on infrastructure through mode-specific grants and loans. By using a competitive, merit-based selection process, and coordinating or consolidating many of DOT's existing infrastructure finance programs, the infrastructure bank would have the ability to spur economic growth and job creation for years to come. Rigorous benefit-cost analysis would focus funding on those projects that produce the greatest long-term public benefits at the lowest cost to the taxpayer. This is achieved, in part, by encouraging private sector participation in projects in order for them to be competitive. Other important selection criteria would encourage accelerated project delivery and risk mitigation. The increased capacity and coordination of Federal infrastructure finance programs in the infrastructure bank will allow for greater investment in those projects that have the largest and most immediate impact on the economy. Many of these projects of national and regional significance are currently underfunded due to the dispersed nature of Federal investment and lending. The national infrastructure bank would be able to address this issue in a systemic fashion, partnering with the private sector as well as State and local governments to address the most pressing challenges facing our transportation networks. We expect that an infrastructure bank would be well-positioned to better align investment decisions with important national economic goals, such as increasing exports. This would amplify job creation and economic growth. Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective files -> Pop Warner History files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d files -> Hanban – asia society confucius classrooms network 2010 request for proposal files -> Northern England’s set-jetting locations Download 1.1 Mb. Share with your friends:
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