Kocherlakota: Fed should set unemployment threshold at 5.5 percent

  • Article by: ADAM BELZ , Star Tribune
  • Updated: January 15, 2013 - 2:30 PM
  • 14
  • Comments

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theagonybhoJan. 15, 13 8:07 AM

Why not set it at 0? 370,000 to 400,000 people keep applying for UI benifits and the number keeps dropping set your sights higher.

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joe_mnJan. 15, 13 9:29 AM

Huh? How is the Feds monetary policy going to create a private sector job for me? The govt is not going to hire me. A company that makes stuff and has happy customers may hire me.

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marathongirlJan. 15, 1310:18 AM

The Fed should start slowly raising the interest rates back UP. The interest rate manipulation is the strongest tool the fed has and it has kept things so low for so long they have no other tools to work with and what they are doing is NOT working. Best thing government could do would be to lower the corporate tax rate to something comparable to other countries...then maybe corporations would bring their profits back into the country and possibly consider bringing jobs back too...

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theagonybhoJan. 15, 1311:51 AM

The feds have manipulated everything in the Obama economy, the stock market, housing and auto sales all getting better due to the feds printing money and artificially keeping interest rates near zero. The printing of money and 0% interest will have to change, when it does people will pull back and here we go again

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ranger78Jan. 15, 1311:53 AM

So now the Fed is going to base monetary policy on the unemployment statistic? Unemployment numbers don't include those who have dropped out of the workforce, those who have gone on disability, etc. So their policy of playing to a number is skewed and misleading right out of the gate. If this is their tactic, we are in for a long, hard time. Unemployment isn't dropping. The disability numbers are skyrocketing. We still have millions who have completely dropped out. This is a failed directive and will not improve the economy.

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scarecrawJan. 15, 1312:08 PM

The only way out of this unemployment rate is to is to mandate E-verify and stop flooding the labor market with cheap foreign labor.

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mylittleidJan. 15, 1312:10 PM

joe_mn "How is the Feds monetary policy going to create a private sector job for me?" --- When private sector companies expand they often use credit. If interest rates are low, they are more likely to go ahead with an expansion, and that equals new jobs.

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mylittleidJan. 15, 1312:15 PM

ranger78 - "So now the Fed is going to base monetary policy on the unemployment statistic? Unemployment numbers don't include those who have dropped out of the workforce, those who have gone on disability, etc." ---- Quite true. But if the unemployment rate dropped as low as 5.5%, those who had dropped out of the workforce would most likely already have returned to it. 5.5% is about what most economists consider full employement (which is not zero as you might think).

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scarecrawJan. 15, 13 1:06 PM

The only way out of this unemployment rate is to dramatically increase immigration and continue to flood the US labor market with cheap foreign labor.

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hjlazniJan. 15, 13 2:22 PM

During depression/recession times the nervous rich, holding government paper, exchange this government paper for cash printed under the heading of "quantitative easing" supposedly conducted for the sole purpose of increasing value of this government paper and subsequent lowering of interest rates. In this way, we are investing in rich people to grow the U.S. economy that will result in increased revenue. Is this system working? It depends. The rich people are getting richer and the middle class is getting poorer because the politicians are allowing the rich to put small business out of business, big business is increasing productivity and globalizing manufacturing and bringing lower paid workers into the U.S. to lower wages in the U.S. and putting U.S. citizens out of a good paying jobs with less income tax revenue coming into the treasury. In the U.S. at this time, the top 1% makes more money each year than the bottom 90%. More and more monopoly money is going to the rich, which money is not used by the middle class to purchase stuff that may be manufactured in the U.S. which may increase economic growth and printing of "real" dollars” to add to the supply of "real" money in the monopoly game. Rich people can only buy so much stuff and horde most of this money and purchase investment products.

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