Saving the Economy From Obama’s Liquidity Trap

It was bad enough that Barack Obama responded to the 2008 housing crisis by making health spending his top priority.

Now a liquidity trap — created by his failure to coordinate fiscal policy with monetary policy from the Federal Reserve — may make recovery harder for the economy.

As the accompanying image from The Wall Street Journal shows, Americans have been refinancing fewer mortgages due to a recent jump in interest rates from Obama’s liquidity trap.

Not only do more expensive mortgages hurt the U.S. housing market, still struggling four years after the crisis. Higher interest rates also hurt the economy with less refinancing activity, otherwise expected to increase aggregate demand through consumer spending.

Necessary and Expedient Measures

We will recommend fiscal policy to Congress that complements monetary policy from the Federal Reserve to grow the economy, as explained in the highly acclaimed Handbook of Government Budgeting:

The Fed largely adapts to the constraints imposed by fiscal policy because its policy decisions are more frequent, more flexible, and less constrained by political considerations … The fiscal and monetary policy mix that results from their independent but coordinated actions has major implications for both economic stabilization and economic growth.

We can’t afford four more years without a president with an understanding of the economy for more Americans to achieve their dreams of middle-class dignity.

The first year of a Grey administration will focus not on a distraction like health spending but on a solution to related problems in jobs and housing markets still struggling in the last year of Obama’s disappointing term — join me


Viral V. Acharya, Guaranteed to Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance (Princeton: Princeton University Press, 2011).

Graham Bannock, R. E. Baxter, Evan Davis, and Graham Bannock, Dictionary of Economics (New York: John Wiley & Sons, 1998).

Kathleen C. Engel and Patricia A. McCoy, The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps (New York: Oxford University Press, 2011).

Van Doorn Ooms, Ronald S. Boster, and Robert L. Fleegler, “The Federal Budgert and Economic Management,” in Handbook of Government Budgeting, ed. Roy T. Meyers (San Francisco: Jossey-Bass, 1999).


11 thoughts on “Saving the Economy From Obama’s Liquidity Trap

  1. I see no reason we can’t market freedom just like they market taxes, wars and prisons!

    (Note to readers: This comment has been edited down from a longer version.)

    • Dear Ed,
      Thank you for writing! You’re right about the problem that The Economist now defines as an emerging “prison-industrial complex.”
      Ronald Grey

  2. Someone please tell me why people still believe in this man? I have studied….I have done the research….and it is all out there for the whole world to see! This man has lied to the American Public….he has covered up his presidency…he has usurped our constituition….he has sold us out to our enemy’s…he has began to take away our rights as American Citizens! How in God’s name can you still support this longlegged Macdaddie Socialist greedy, give me the power….run my country as I want to socialist son of a ########? Come on People….Look at the numbers….read the results….ask yourself how you are doing now after three years! Ask yourself what your future holds if he is reelected…Do you enjoy your Freedom my friends?….If you do….you better wake the Hell up! Because it is being taken from you! Barrack Obama is the scariest thing this country has ever faced! I will not answer to his socialistic dictator based give me the world policy’s! Call me a rebel…call me a hardcase….call me anything you may…but I will not give up my rights as a n American Citizen! Sorry Barrack….but you will not sell out what my forefathers gave to me! Please AMERICA>>>>WAKE THE HELL UP!

    • Dear Kevin,

      You’re not alone to believe Barack Obama is too willing to raise taxes and spend like a socialist.

      Unlike Obama, our campaign still believes in the common sense of our American founders: government most likely to ensure safety and happiness to society, with the least expense and greatest benefit, is preferable.

      “It has been my faithful study to collect my duty from a just appreciation of every circumstance by which it might be affected,” said George Washington, who has been my mentor through training at Harvard and service in the U.S. Army.

      Join me to spread the word about our campaign (like Paul Revere).

      We have not yet begun to succeed.

      I am, Kevin Messick, proud to be your obedient servant,
      Ronald Grey

  3. Kevin, an excellent post. I totally agree that the masses have been brainwashed. This man doesn’t have the decency to show us his real birth certificate or his selective service documents. He’s a fraud and a traitor and should be dealt with accordingly!

    • OK Mr Grey….I want to know the truth about you? I like your words….I like your thoughts….I like your disatisfaction with the poor job being done in Washington right now! But are you any different my friend? Can you leave the hate…discontent….racism….and ignorance behind? And Govern our country as our ancesters created it? Can you show me you are above the past and show me that we as black and white can live on together in harmony and make our world better for those who follow us? It is not for us my friend….we will soon be gone….but can we ;eave an unbiased…fair and equal world for our children? This is our world….black and white today….how can you settle this present hatred that we face? We all bleed red my friend….and we have all suffered….but black and white have built this country from blood ,sweat ,and tears! Can you truely bring this great Nation together?

      • Dear Mr. Messick,

        Thank you for your great question!

        You’re right to imply Americans are disappointed in government, because they are. Gallup reports that approval ratings for Congress are at all-time lows.

        The Federalist Papers said, “Government ill executed, whatever it may be in theory, must be, in practice, a bad government,” which is why we believe it’s time again for an American president in the spirit of George Washington (who described slavery as the “only unavoidable subject of regret” in the nation’s founding).

        U.S. Army strong and Harvard trained, I volunteer to lead this campaign to victory for all Americans to secure greater safety and happiness.

        I am, Sir, happy to be your obedient servant,
        Ronald Grey

        P.S. We have not yet begun to succeed

  4. MR Grey….all I want is our country back! Black or white should mean nothing when it comes to our rights as US citizens? Slavery was gone many years ago! I do not see color….I see man….and I see men that have fought and died for what this country was founded upon! The media….the outside world….and our enemys provoke race in this world to keep us from uniting together! When will the average man see this? Black and white are the history of this country….we should not be at war with one another….we must stand up together to the influx of the other nations who are trying to bring us down! Blacks and Whites and our Native Americans( whom we did wrong) are the people who have to save this country! As long as others urge our disregard for each other….we can not stand as a nation! We need a man to ubite us….protect us….guide us….and respect us as a nation….to stand up and lead us! Too set an example for the generations after us! Are you that man Mr Grey? Can you look over the ignorance of hate that has ran over our country like a disease? Can you bring our nation back together and give us the future we all severely need? Are you and God on the same page? Tell me my friend….but more important….tell the American population! I want to believe in you Mr Grey….give me a reason my friend!

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