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Kansas City Fed President Thomas Hoenig - the central bank’s longest serving policy maker...

Kansas City Fed President Thomas Hoenig - the central bank’s longest serving policy maker - says the real problem facing our economy is bad debt, and a quick-fix monetary policy isn't the cure-all. He asserts that if we don’t turn our focus to the long run, "we will be dealing with overnight crises for as far as the eye can see.”
Comments (33)
  • JohnLocke
    , contributor
    Comments (381) | Send Message
     
    I guess common sense is not so common...
    25 Aug 2011, 08:05 PM Reply Like
  • WMARKW
    , contributor
    Comments (10252) | Send Message
     
    They don't have a quick fix monetary policy.

     

    They don't have a SLOW fix monetary policy.

     

    They have no bullets left.

     

    This is a fiscal problem. The fiscal problem has been created by past monetary and fiscal policy. How about the Fed just take a vacation for about 10 years and let us sort their mess out !!!
    25 Aug 2011, 08:10 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    Why stop at 10? Easy money got us into this mess. Putting the group who decided on that policy out of a job is the best way to prevent it happening again, not giving them more power as has been happening ever since.
    25 Aug 2011, 08:24 PM Reply Like
  • WMARKW
    , contributor
    Comments (10252) | Send Message
     
    OK....Losing Paper...while I feel like my arm is being twisted....I'll go for 25 years.
    25 Aug 2011, 08:53 PM Reply Like
  • Financial Insights
    , contributor
    Comments (945) | Send Message
     
    Sounds like good old fashioned mid-western common sense
    25 Aug 2011, 08:27 PM Reply Like
  • tjohn1
    , contributor
    Comments (152) | Send Message
     
    Our hedonistic life style financed by mountains of debt is the root problem. Look around! Why do we need such big and expensive homes? Only two people in each house? Why do we need two cars in the garage and two cars on the street? Why do we need gas guzzlers and huge vehicles made of so much steel? We have only one person in each SUV which can accommodate four persons? I can go on and on. Yes we all must come down! Especially the leveraged buy out , private equity and hedge fund elitists. Then only will there be any salvation! Any economic recovery!
    25 Aug 2011, 08:29 PM Reply Like
  • GotLife
    , contributor
    Comments (1215) | Send Message
     
    Europeans are already doing this. Has it helped them?
    25 Aug 2011, 09:29 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3587) | Send Message
     
    Ever try to haul drywall or plywood in a Prius? Not fun.
    25 Aug 2011, 10:29 PM Reply Like
  • mike mohr
    , contributor
    Comments (451) | Send Message
     
    We need to clean the house.
    There is no recovery until those who caused it sent behind the bars. Bring the jobs back to U.S instead of shipping them to India and China.
    25 Aug 2011, 08:52 PM Reply Like
  • SlingWing9
    , contributor
    Comments (473) | Send Message
     
    Everyone in power has their own personal agenda which for the past couple of decades hasn't been very closely aligned with the needs of the country. And such as it is, it continues on and on at the expense of the middle American taxpayer.
    25 Aug 2011, 09:25 PM Reply Like
  • tunaman4u2
    , contributor
    Comments (2744) | Send Message
     
    I HEART HOENIG!
    25 Aug 2011, 09:25 PM Reply Like
  • rlg7_98
    , contributor
    Comments (35) | Send Message
     
    “What’s the fundamental problem?” Hoenig said. “Is the fundamental problem a yield curve issue? Or is the fundamental problem that the United States and world have too much debt?”

     

    That kind of talk can get you branded as a racist teabagger in some circles...
    25 Aug 2011, 09:30 PM Reply Like
  • Fueled By Randomness
    , contributor
    Comments (290) | Send Message
     
    This man has a solid and thorough understanding of the problem and must be fired immediately before he ruins everything. :)
    25 Aug 2011, 09:51 PM Reply Like
  • Native Texan
    , contributor
    Comments (-724) | Send Message
     
    The fix is simple:

     

    Repeal Obama Care
    Repeal Dodd-Frank
    Provide for a tax holiday on the repatriation of foreign capital.

     

    The ultimate fix? Exile Obama and all of the Democrats to Kenya.
    25 Aug 2011, 09:54 PM Reply Like
  • WMARKW
    , contributor
    Comments (10252) | Send Message
     
    Tex.....I ok with the last one, so long as you confiscate their wealth first :]
    25 Aug 2011, 10:01 PM Reply Like
  • Terry330
    , contributor
    Comments (866) | Send Message
     
    Going back to the W. Bush failures want fix the US economy. One question, who will pay the 5.5 trillion in Bush debt?
    25 Aug 2011, 10:25 PM Reply Like
  • WMARKW
    , contributor
    Comments (10252) | Send Message
     
    Terry, this is a broken record comment again. The same people will pay the Bush debt as will pay the Obama debt. The real answer is probably no one. It will be defaulted on.
    25 Aug 2011, 10:33 PM Reply Like
  • inthemoney
    , contributor
    Comments (981) | Send Message
     
    So, the life before Obama was perfect, I take it? What happened? Had too much of good life and decided to try a Democrat instead? Somewhere deep in my memory I recollect something about 2008 Armageddon, wasn't it before Obama?
    25 Aug 2011, 11:09 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    You can change the guy in charge, but if the same people are pulling the strings nothing changes.

     

    You still have Helicopter Ben, JP Morgan and Goldman Sachs and all their friends calling the shots...

     

    Edit: Urgh, forgot my "I'm not responding to politics on the internet" rule...
    25 Aug 2011, 11:46 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Defacto default, you must mean, via high inflation for years to come. Actual default is impossible when you can print your own currency and print, print, print they certainly will.
    25 Aug 2011, 11:46 PM Reply Like
  • trey3216
    , contributor
    Comments (28) | Send Message
     
    It wasn't. But you idiots act like what's going on is the result of the last 10 years. This is a mess 50 years in the making. Just like all bubbles, the last few time periods before the pop is when it goes locomotive. This is not just a Bush or Obama problem, this is an America problem and has been for 50 years. Why so many of us were led to believe that our most expensive asset should be our most illiquid is confounding at best, and no doubt idiotic in actuality. That we decided to strap that asset with ridiculous perishables and re-treads that we spent debt to buy is sad. That we buy a car and then buy another new one in 4 years instead of using the entire vehicle life is comical. That we have 30+% of our society, and likely more, that has no clue how to cook their own meal let alone grow their own food, or kill their own food is regrettable.

     

    Party politics have killed this country. Our Congress has killed this country. Just like Jefferson, Washington and Franklin told us
    26 Aug 2011, 12:18 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    Us idiots? You're the one making the assumptions here...

     

    Why assume we all disagree?
    26 Aug 2011, 12:31 AM Reply Like
  • varan
    , contributor
    Comments (3520) | Send Message
     
    Perhaps it will be easier to haul of everyone who thinks like this to Texas. Perry wants to secede. We should let him. And give him Oklahoma as a bonus.

     

    You can keep your bigotry too.
    26 Aug 2011, 12:36 AM Reply Like
  • trey3216
    , contributor
    Comments (28) | Send Message
     
    I'm not being a bigot. And I'm calling both sides idiots. The 'royal you', got me? How in the world is what I said above bigotry in any fashion?? We're all guilty here in some form or fashion.
    26 Aug 2011, 12:54 AM Reply Like
  • rick flair
    , contributor
    Comments (369) | Send Message
     
    exactly. theres no more reason to comment. he just stated it EXACTLY!
    26 Aug 2011, 12:21 AM Reply Like
  • varan
    , contributor
    Comments (3520) | Send Message
     
    The real problem is the lack of jobs.

     

    Sadly the elites in Washington and Federal Reserve do not have to face the problem. So they talk like ignorant medicine men of the ancient days who used to prescribe bleeding, pain, more bleeding, more pain, and ever more pain for everybody.

     

    Sadder still is the gullibility of the victims which means the rest of us.
    26 Aug 2011, 12:29 AM Reply Like
  • trey3216
    , contributor
    Comments (28) | Send Message
     
    The sad thing is all they did with QE1/QE2/Stimulus was line the pockets of bureaucrats and corporate titans, along with a few academics as well. Record cash, record stock repurchases, record profits, no jobs. Know why?? Because our pathetic legislative branch is too concerned about having a job to enact and brand of fiscal policy, and damn sure any amount of currently essential regulatory changes/easing/elimina... to create jobs. This whole time period has made me sick. If you went out in public 40 years ago and the first thing that came up at dinner was a political discussion, you may not have been asked back to dinner. Now it's the first thing you hear at the bar, at lunch, on the phone with a client, in the clubhouse, at the ballpark, sleeping with your wife. It's disgusting and transformative. Transformative in the sense that we're transforming ourselves into a sub-optimal mound of crap that does whatever people tell us we should do. Therefore, the real problem is lack of spine
    26 Aug 2011, 01:00 AM Reply Like
  • Slugbug
    , contributor
    Comments (4) | Send Message
     
    5+T in Bush debt over 8 years, 4+T in Obama debt over 2+ years....really, we all gotta get past this, stop the blame game, move on, learn from it and try to fix it. Printing money is not going to fix it. That makes our money worthless. I don't understand why the government can NOT seem to cut more spending. Just STOP. We are out of money. We do not HAVE money to GIVE away right now. Sorry. We can support the the programs we have in place in the US, be we just can not continue to BORROW money in order to GIVE it away to other countries and people that are not even citizens of the US. It just doesn't even make sense. I don't understand it.

     

    If we could start by not giving money away that we don't have, wouldn't that help? Definitely no more BORROWING of money to give away. What am I missing here?
    26 Aug 2011, 01:00 AM Reply Like
  • varan
    , contributor
    Comments (3520) | Send Message
     
    You are missing the some basic economics 101. spending is not the problem. people are without jobs is the problem. if the governments cuts spending - for example saves a few hundred million a day by shutting down the Iraq and Afghanistan wars - it will lead to more unemployment.
    26 Aug 2011, 01:38 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (497) | Send Message
     
    Varan: so the solution to a problem created by easy money (debt) is ... more debt?

     

    Why doesn't the US army just destroy various parts of the US, then people get employed in the rebuilding, as well as manufacturing and using the weaponry and an entire region doesn't come to hate the country?

     

    (The last part is sarcasm - sadly people like Varan actually seem to believe nonsense similar to this)
    26 Aug 2011, 02:02 AM Reply Like
  • Slugbug
    , contributor
    Comments (4) | Send Message
     
    I realize that one of the problems is that people don't have jobs. I am one of the. I've been laid of twice in 29 months and am currently unemployed. I am a degreed professional with over 15 years experience. I assure you - I realize we need jobs. But I think you might have missed my point. I was speaking specifically to cutting spending by not GIVING money away. I didn't say anything cutting bringing home troops. If we bring home troops, I think they should be sent to defend our borders or dog other very important much needed jobs, I don't want their jobs to end.

     

    How much money does the US GIVE away every year? The government has tried various programs to stimulate job growth. It hasn't worked, the corporations have pocketed the money, done more with less, people with jobs are over worked, under paid and can't do anything about it for fear of losing their jobs.

     

    It may sound ridiculous but at this point thinking outside of the box can't hurt. In your home, if you run out of money, you certainly don't borrow money from a neighbor so you can then turn around and GIVE it away. And if one of the REASONS you are running out of money that supports your home is because you are giving money away for things that do not support your home, you simply have to stop doing that.
    26 Aug 2011, 02:05 AM Reply Like
  • varan
    , contributor
    Comments (3520) | Send Message
     
    It's not a question of belief. It's a question of basic economics.

     

    Suppose you have a room full of gasoline containers in your house. Suppose also that the gasoline catches fire. Focusing on spending and debt at this point is akin to worrying about how to retrieve the gasoline and the containers. Economists who have studied this problem for all there life would suggest that your first priority should be to get the hell out, and then try to contain the fire.
    26 Aug 2011, 10:50 AM Reply Like
  • thull6047
    , contributor
    Comments (4) | Send Message
     
    Debt is not the problem; bad debt is the problem! When you loan money to folks and they don't pay you back so you foreclose on their colateral (i.e. house or car) and then get told you can't do that by the government for 6 months by which time they have trashed the house and/or car and after you take possession the States DA files a law suit against you for getting the dead beats out and claims the property for the state because you used a computer to file the eviction rather than a person claiming that was inhuman and robotic...dah! Then the fed says you can only charge 22 cents for an electronic transaction fee for purchases on debit cards you issued that off set the free checking, bill pay computers in transaction processing etc all of which cost upward of 35 cents a transaction and they wonder why you are going broke. Banks are so fragile that companies wont hire because they want to hord money in case the banks fail in order to self finance rather than expand and hire.
    26 Aug 2011, 03:49 PM Reply Like
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