The Fed is coming in hot trying to build a preemptive case for independence. This is not new. They have done this in the past to clear Wall Street fears. This is an interesting economic conundrum for Trump’s economic plans and control over the economic results he expects to see. He might be somewhat neutered on certain economic matters other than trade and tax policy. The Fed has gotten inflation close to the zone of 2%. The balance sheet is still a mess, but coming down. Will Trump insert himself into the mix and try to get interest rates down too fast? Or will his actions on “unleashing business” cause an increase in inflation and cause Powell to struggle to tamp down inflation? “An independent central bank is one that can carry out monetary policy insulated from pressures arising from other parts of government or elsewhere. When there is central bank independence, the role of national or jurisdictional governments is typically one of representing the public in specifying a mandate for the central bank and holding the central bank accountable by monitoring its performance and appointing central bank leadership. In this arrangement, the public, through representative government, specifies the overall objectives that central banks should pursue.” Speech by Governor Kugler on central bank independence and the conduct of monetary policy Trump has softened his comments, but he will do so in different ways like X or Truth Social. "I think I have the right to say I think you should go up or down a little bit. I don't think I should be allowed to order it, but I think I have the right to put in comments as to whether or not the interest rates should go up or down," the former president said during a Bloomberg News interview at the Chicago Economic Club. https://www.reuters.com/world/us/tr...eigh-not-order-fed-rate-decisions-2024-10-15/
Trump knows monetary policy better then some damn Washington beaurocrats.* * He learned it by bankrupting numerous businesses.
Separation of powers and independence are over rated anyway. Just have him rule by decree. His worshippers will love it.
since Reagan the number of Executive Orders has gotten way out of hand , but have been allowed( I am not a fan of them), however, they all come with a sunshine date of the end of a Presidential term as only Congress has the power to make laws
I guess you are confusing the fed with the military. When congress sez "audit" the fed, it means bring 'em in, roll the cameras & make ass clowns of themselves. the FED & all 12 branches are audited by KPMG Federal Reserve System Audited Annual Financial Statements
I did not know this, but good lord not a congressional shitshow. I can’t imagine the grandstanding. I do want to look into these FAM accounting standards to understand how they differ from GAAP.
here's a fun fact. if the federal gov used GAAP, the deficit increased by 11 TRILLION in 2004! But, they skirt contingent liability rules that firms must abide by. In fact, peeps that bitch about the debt at what 35T, ho ho! In a GAAP world that ain't even close.
I agree with what you are saying there but if you valued all of the land owned by the US Government, how would that impact their balance sheet. And yes I know that government entities don't report the same way under GAAP.
I totally agree & have made that pt here. Looking only at liabilities misses a lot. It is a pet peeve of mine when people say, "we're leaving our kids with all this debt"....yeah, but what about the assets - tangible & intangible. It's not like we just ran up debt & have nothing to show for it.
Agree, when we build an aircraft carrier it is literally "expensed" while it is being built but has no value after it is put in service. I totally get that government accounting is a totally different animal but if Exxon owned ANWAR what would that look like on their balance sheet?
IMO, the prob with the aircraft carrier example is how does 1 measure the value? There's no mkt, there's not revenue generated. It's like a park. EZ to calc the expenses, but how does 1 calc the value? Also, aircraft carriers require enormous operating expenses.
I get that but if an aircraft carrier was owned by US Defense company, they would depreciate the cost over the expected life of the asset. We have already written off the aircraft carrier.
yep. but, the logic of depreciation is the "matching principle" where a long-lived asset should produce revenues into the future & therefore we should match the expenses to those revenues & hence, get a more accurate measure of net income. But, when the value of an asset like an aircraft carrier is so uncertain & hard to determine full expensing is not at odds with GAAP. Give you an example. GAAP requires R&D to be expensed, not capitalized(depreciated) b/c it is voodoo to measure the value of R&D. Ditto advertising exp. fyi, Warren Buffet treats R&D as an asset when determining valuations as he should. the 1st rule of accounting is conservatism - if in doubt, expense. but, I don't know if any of this is relevant. if the military were to be audited, I would think it would be treated solely as a cost center. I think the audit would/should focus entirely on the cost side of the equation. Not value, not revenue. If they spent $500 on a screwdriver, who cares if they capitalize that or expense it.
Agree, that’s why I am curious about FAM. I believe that just by including the large USG unfunded liabilities the debt goes from that 35T to over 120T.
