snapper,
i really don't understand this metric you're using. increasing the savings rate wasn't the point of QE. it's to goose demand.
if you want a more accurate statement, it'd be "US personal debt is going down - to the order of 20+% - despite QE".
at around 2.1, it's literally less than half of what it was in 2008, even with the small creep up recently. we're back to the levels of April 2012.
even if you define success as fiscal consolidation-- which i don't--
Government borrowing: Fiscal consolidation, American style | The Economist
note the discussion about how the CBO was conservative with its estimate, as they assumed higher interest rates than is likely.
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THE Congressional Budget Office released an updated budget outlook today. Here's the big news:
The 4% of GDP deficit forecast for 2013 is even more remarkable when one notes that the figure for 2012 was 7%. That's a breathtaking pace of fiscal consolidation. CBO reckons that the deficit will continue to fall and will drop to 2.1% of GDP in 2015. Public debt as a share of the economy is also forecast to begin falling from next year. The CBO thinks that deficits will begin rising again from 2016 through 2023, and they might. But CBO guesses that the biggest cause of increasing deficit will be the impact of rising interest rates on interest costs. It forecasts that the yield on the 10-year Treasury will average 4.5% between 2015-2018. That doesn't seem unreasonable looking at Treasury rates over the past generation. But yields have rarely been anywhere close to that level over the past decade. Overall one has to conclude that pundits and politicians alike dramatically overstated the challenge of bringing down American borrowing and stabilising American public debt.
One wonders how this news will be received in London. Since 2010 (when the coalition government took charge) Britain's growth performance has diverged sharply from America's. There was supposed to be a point to that pain; for its trouble, Britain was supposed to take the fast road back to fiscal rectitude. Instead Britain is badly lagging behind America on that score as well. There has been virtually no change in public borrowing as a share of GDP in Britain from 2011; it remains at about 7.5% of GDP. A very interesting contrast.
Savings are going down - despite QE
if you want a more accurate statement, it'd be "US personal debt is going down - to the order of 20+% - despite QE".
Meanwhile 10 year bond yields and mortgage rates linked to them creep up.
How you can call these 'stimulus' policies, both fiscal and monetary a 'success' is quite beyond me.
Government borrowing: Fiscal consolidation, American style | The Economist
note the discussion about how the CBO was conservative with its estimate, as they assumed higher interest rates than is likely.
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THE Congressional Budget Office released an updated budget outlook today. Here's the big news:
If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, the Congressional Budget Office (CBO) estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year—at 4.0 percent of gross domestic product (GDP)—will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.
One wonders how this news will be received in London. Since 2010 (when the coalition government took charge) Britain's growth performance has diverged sharply from America's. There was supposed to be a point to that pain; for its trouble, Britain was supposed to take the fast road back to fiscal rectitude. Instead Britain is badly lagging behind America on that score as well. There has been virtually no change in public borrowing as a share of GDP in Britain from 2011; it remains at about 7.5% of GDP. A very interesting contrast.
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