gdp came in below estimates today, market responded in a positively upbeat manner, not really surprising given the recent history. Zerohedge likes to refer to this as good news is good news and bad news is good news. I had trouble typing that out because the logic (or lack there of) is what is bothering me right now.
As somebody else said, we are borrowing money against the future, to fund current growth. Which would be true, if we needed to pay off our debt. And the real problem is that all anybody cares about is the margin, having 60 trillion in debt doesnt bother people because its such an astronomically large number. That number might be off, but I think the social security situation is incredible BS.
But really, we can spend more money than we have today because we assume we will make more money in the future is only ok when you arent spending orders of magnitude more money than you have, or when you are growing at a substantial rate. The joke in parallel programming class was if you can find some topic of interest that will take 8 years of compute time, it would be better to wait 2 years to buy the computers because by then it will only be 4 years of compute time, assuming moore's law (ish ~not actually what moore's law says.).
But our economy is only growing at 1.8%, and we are borrowing money at a rate below to that, but not significantly below that, so it seems to me that we are literally just taking money from our future selves and not making a particularly good investment of it. That is not to say I disagree with the Fed's actions. Well, I don't think they are doing things in the best way, but I do think austerity is the wrong approach, and anybody watching what happens to the market when it hears the word taper should see right away that the general rule of thumb is our markets are screwed if we aren't injecting freshly printed capital. But doesnt that just ring hollow?
/ramble
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