Jerome Powell fielded questions from reporters Wednesday, and he made it clear the Fed is a long, long way from abandoning its current dovish policy stance. The Fed plans to keep interest rates near zero, while monetizing US debt, financing zombie companies, and pouring new dollars into the market through balance sheet purchases. But even that may not be enough, and the Fed is now hinting that even more fiscal support may be necessary.
With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current zero to 0.25% target range for the federal funds rates until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.
This basically means ultralow rates from now until at least 2023. There’s no surprise there. Following the 2008 financial crisis and Great Recession, the Fed kept the target federal funds rate at 0.25 percent for 83 months, before slowly allowing rates to inch upward in 2015.
For the last five years of that period, the Fed generally maintained that the economy was “strong,” “strengthening” or generally doing well. The fact that the Fed refused to allow rates to move upward in this period hinted at the true weakness of the economy of that period, however.
We’re now just six months into the current period of target rates at 0.25 percent, and its now more implausible than ever to claim the economy is doing well. There are still more than 12 million Americans currently collecting unemployment checks, and as of last week, nearly eight hundred thousand workers filed new unemployment claims. As of late August, 30 to 40 million Americans were estimated to be at risk of eviction in coming months.
Not surprisingly, then, the fed expects it to be a while before “full employment” is again achieved, and as Powell notes: “We expect to maintain an accommodative stance of monetary policy until these outcomes, including maximum employment, are achieved.”
The Balance Sheet and Other Tools
But beyond forcing down interest rates for 6 or more years —as happened during the last cycle—what else can the Fed do?
Powell seems to believe there’s plenty:
First of all, we do have lots of tools, we’ve got the lending tools, we’ve got the balance sheet, we’ve got forward guidance. There’s still plenty more that we can do. We think that our rate policy stance is an appropriate to support the economy. We think its powerful....But again we have the other margins [that] we can still use. So no, certainty we’re not out of ammo.
Certainly, there’s no lack of lending tools available, and the Fed continues to be in the business of picking winners and losers using newly minted money. In many cases, these lending programs are simply bailout instruments, although these are officially regarded as “loans. ” They are essentially tools used to bailout zombie companies and other institutions that can’t cash flow in a normal market due to mismanagement, but which have been deemed too big to fail.
And then, of course, Powell is sure to mention the balance sheet.
This is certainly one of the areas where some of the most dramatic change can be seen, and the Fed’s balance sheet has again surged to over $7 trillion in recent days, reaching to 7.01 trillion as of September 9.
As we can see in the second graph, total Fed assets were under one trillion until late 2008 when the Fed began buying up assets no one wanted anymore in order to keep too-big-to-fail institutions afloat. It also bought assets such as US treasury debt to keep interest rates low. It made these purchases for its balance sheet primarily by creating new money out of thin air and spending it.
In the decade following 2008, the Fed vowed it would reverse course and sell its assets, and pull those trillions of new dollars back out of the economy.
It’s obvious at this point that’s never going to happen, and the Fed is now in the business of monetizing the US government’s debt while creating artificial market demand for poorly performing or nonperforming assets held by the nation’s financial institutions.
Turning toward Fiscal Policy
That’s where we are now, and its difficult to imagine the Fed diverging from this course under anything even resembling current conditions. Given the current fragility of the market—fragility created by the Fed’s long-term commitment to financialization and propping up financial institutions that made bad bets—the Fed can’t abandon its current policy of “easy money forever.” To do so would expose the sheer number of overleveraged borrowers that absolutely rely on ultralow interest rates to make their next debt payment and thus avoid default. Moreover, the Fed can’t allow interest rates to increase because this would lead to massive cuts to the Federal budget as Congress is forced to find ways to pay debt service on its rapidly growing $26 trillion debt.
But even with all this in place, there are fears in DC that it won’t be enough. Thus, the Fed is now being asked about how much “fiscal support” will be necessary from Congress. By “fiscal support,” we mean more unemployment checks, more direct bailouts and “forgivable loans” from Congress. We mean more US government spending in general, perhaps on infrastructure, military projects, wars, and other programs.
When Powell was asked about this yesterday, he replied:
My sense is that more fiscal support is likely to be needed. Of course, the details of that are for Congress, not for the Fed. But I would just say there are roughly 11 million people still out of work due to the pandemic and good part of those people were working in industries that are likely to struggle. Those people may need additional support as they try to find their way through what will be a difficult time for them.
Economists, especially Fed-enamored economists, have long pooh-poohed fiscal policy as inferior to monetary policy and as too slow. So the fact we’re now asking how Congress can support the Fed with fiscal policy suggests the Fed really is running out of options.
But is fiscal policy really all that distinguishable from monetary policy at this point?
After all, it’s not like Congress—should it wish to spend another trillion dollars—can come up with another trillion in tax revenues. Nearly all of the new stimulus spending being pushed by Congress in recent months has been paid for with deficit spending. This requires selling a lot of government bonds. And that should also mean rising interest rates for US debt as new debt floods the market. But why isn’t that happening? It’s because the Fed is buying up a lot of new debt to keep interest rates low.
Thus the line between monetary and fiscal policy becomes blurry. If new fiscal spending is mostly deficit spending—and a lot of that new debt is bought up by the Fed—fiscal policy just becomes another extension of monetary policy.
This may be where we're headed, but it is perhaps one of those taboos topics we’re not supposed to mentions on Capitol hill.
In this specific predicament, U.S. officials have to choose a strategy to deliver the aid without the perception of benefiting Hamas, a group the U.S. and Israel both classify as a terrorist organization.
Logistics
When aiding people in war zones, you can’t just send money, a development strategy called “cash transfers” that has become increasingly popular due to its efficiency. Sending money can boost the supply of locally produced goods and services and help people on the ground pay for what they need most. But injecting cash into an economy so completely cut off from the world would only stoke inflation.
So the aid must consist of goods that have to be brought into Gaza, and services provided by people working as part of an aid mission. Humanitarian aid can include food and water; health, sanitation and hygiene supplies and services; and tents and other materials for shelter and settlement.
Due to the closure of the border with Israel, aid can arrive in Gaza only via the Rafah crossing on the Egyptian border.
The U.S. Agency for International Development, or USAID, will likely turn to its longtime partner on the ground, the United Nations Relief and Works Agency, or UNRWA, to serve as supply depots and distribute goods. That agency, originally founded in 1949 as a temporary measure until a two-state solution could be found, serves in effect as a parallel yet unelected government for Palestinian refugees.
USAID will likely want to tap into UNRWA’s network of 284 schools – many of which are now transformed into humanitarian shelters housing two-thirds of the estimated 1 million people displaced by Israeli airstrikes – and 22 hospitals to expedite distribution.
Gaza is a self-governing Palestinian territory. The narrow piece of land is located on the coast of the Mediterranean Sea, bordered by Israel and Egypt.PeterHermesFurian/iStock via Getty Images Plus
Since Biden took office, total yearly U.S. assistance for the Palestinian territories has totaled around $150 million, restored from just $8 million in 2020 under the Trump administration. During the Obama administration, however, the U.S. was providing more aid to the territories than it is now, with $1 billion disbursed in the 2013 fiscal year.
But the White House needs Congress to approve this assistance – a process that requires the House of Representatives to elect a new speaker and then for lawmakers to approve aid to Gaza once that happens.
Ethics
The United Nations Relief and Works Agency is a U.N. organization. It’s not run by Hamas, unlike, for instance, the Gaza Ministry of Health. However, Hamas has frequently undermined UNRWA’s efforts and diverted international aid for military purposes.
Humanitarian aid professionals regularly have to contend with these trade-offs when deciding to what extent they can work with governments and local authorities that commit violent acts. They need to do so in exchange for the access required to help civilians under their control.
Similarly, Biden has had to make concessions to Israel while brokering for the freedom to send humanitarian aid to Gaza. For example, he has assured Israel that if any of the aid is diverted by Hamas, the operation will cease.
This promise may have been politically necessary. But if Biden already believes Hamas to be uncaring about civilian welfare, he may not expect the group to refrain from taking what they can.
Security best practices
What can be done to protect the security of humanitarian aid operations that take place in the midst of dangerous conflicts?
Under International Humanitarian Law, local authorities have the primary responsibility for ensuring the delivery of aid – even when they aren’t carrying out that task. To increase the chances that the local authorities will not attack them, aid groups can give “humanitarian notification” and voluntarily alert the local government as to where they will be operating.
Hamas has repeatedly flouted international norms and laws. So the question of if and how the aid convoy will be protected looms large.
Under the current agreement between the U.S., Israel and Egypt, the convoy will raise the U.N. flag. International inspectors will make sure no weapons are on board the vehicles before crossing over from Arish, Egypt, to Rafah, a city located on the Gaza Strip’s border with Egypt.
The aid convoy will likely cross without militarized security. This puts it at some danger of diversion once inside Gaza. But whether the aid convoy is attacked, seized or left alone, the Biden administration will have demonstrated its willingness to attempt a humanitarian relief operation. In this sense, a relatively small first convoy bearing water, medical supplies and food, among other items, serves as a test balloon for a sustained operation to follow soon after.
In that case, the presence of U.S. armed forces might provoke attacks on Gaza-bound aid convoys by Hamas and Islamic jihad fighters that otherwise would not have occurred. Combined with the mobilization of two U.S. Navy carrier groups in the eastern Mediterranean Sea, I’d be concerned that such a move might also stoke regional anger. It would undermine the Biden administration’s attempts to cool the situation.
On U.N.-approved missions, aid delivery may be secured by third-party peacekeepers – meaning, in this case, personnel who are neither Israeli nor Palestinian – with the U.N. Security Council’s blessing. In this case, tragically, it’s unlikely that such a resolution could conceivably pass such a vote, much less quickly enough to make a difference.
Topher L. McDougal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Diagnosis and management of postoperative wound infections in the head and neck region
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]” Credit: 2023 Barbarewicz…
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
Credit: 2023 Barbarewicz et al.
“The majority of wound infections often manifest themselves immediately postoperatively, so close followup should take place […]”
BUFFALO, NY- October 20, 2023 – A new research perspective was published in Oncoscience (Volume 10) on October 4, 2023, entitled, “Diagnosis and management of postoperative wound infections in the head and neck region.”
In everyday clinical practice at a department for oral and maxillofacial surgery, a large number of surgical procedures in the head and neck region take place under both outpatient and inpatient conditions. The basis of every surgical intervention is the patient’s consent to the respective procedure. Particular attention is drawn to the general and operation-specific risks.
Particularly in the case of soft tissue procedures in the facial region, bleeding, secondary bleeding, scarring and infection of the surgical area are among the most common complications/risks, depending on the respective procedure. In their new perspective, researchers Filip Barbarewicz, Kai-Olaf Henkel and Florian Dudde from Army Hospital Hamburg in Germany discuss the diagnosis and management of postoperative infections in the head and neck region.
“In order to minimize the wound infections/surgical site infections, aseptic operating conditions with maximum sterility are required.”
Furthermore, depending on the extent of the surgical procedure and the patient‘s previous illnesses, peri- and/or postoperative antibiotics should be considered in order to avoid postoperative surgical site infection. Abscesses, cellulitis, phlegmone and (depending on the location of the procedure) empyema are among the most common postoperative infections in the respective surgical area. The main pathogens of these infections are staphylococci, although mixed (germ) patterns are also possible.
“Risk factors for the development of a postoperative surgical site infection include, in particular, increased age, smoking, multiple comorbidities and/or systemic diseases (e.g., diabetes mellitus type II) as well as congenital and/ or acquired immune deficiency [10, 11].”
Continue reading the paper: DOI:https://doi.org/10.18632/oncoscience.589
Correspondence to: Florian Dudde
Email: floriandudde@gmx.de
Keywords: surgical site infection, head and neck surgery
AboutOncoscience:
Oncoscience is a peer-reviewed, open-access, traditional journal covering the rapidly growing field of cancer research, especially emergent topics not currently covered by other journals. This journal has a special mission: Freeing oncology from publication cost. It is free for the readers and the authors.
To learn more about Oncoscience, visit Oncoscience.us and connect with us on social media:
A year after the Supreme Court struck down President Biden’s student loan forgiveness plan, he presented a new scheme to the Department of Education on Tuesday. While it is less aggressive than the prior plan, this proposal would cost hundreds of billions of taxpayer dollars, doing more harm than good.
As the legendary economist Milton Friedman noted, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
Higher education in America is costly, and this “forgiveness” would make it worse.
Signing up for potentially life-long student loans at a young age is too normalized. At the same time, not enough borrowers can secure jobs that offer adequate financial support to pay off these massive loans upon graduation or leaving college. These issues demand serious attention. But “erasing” student loans, as well-intentioned as it may be, is not the panacea Americans have been led to believe.
Upon closer examination, the President’s forgiveness plan creates winners and losers, ultimately benefiting higher-income earners the most. In reality, this plan amounts to wealth redistribution. To quote another top economist, Thomas Sowell described this clearly: “There are no solutions, only trade-offs.”
Forgiving student loans is not the end of the road but the beginning of a trade-off for a rising federal fiscal crisis and soaring college tuition.
When the federal government uses taxpayer funds to give student loans, it charges an interest rate to account for the cost of the loan. To say that all borrowers no longer have to pay would mean taxpayers lose along with those who pay for it and those who have been paying or have paid off their student loans.
Let’s consider that there will be 168 million tax returns filed this year. A simple calculation suggests that student loan forgiveness could add around $2,000 yearly in taxes per taxpayer, based on the CRFB’s central estimate.
Clearly, nothing is free, and the burden of student loan forgiveness will be shifted to taxpayers.
One notable feature of this plan is that forgiveness is unavailable to individuals earning over $125,000 annually. In practice, this means that six-figure earners could have their debts partially paid off by lower-income tax filers who might not have even pursued higher education. This skewed allocation of resources is a sharp departure from progressive policy.
Data show that half of Americans are already frustrated with “Bidenomics.”
Inflation remains high, affordable housing is a distant dream, and wages fail to keep up with soaring inflation. Introducing the potential of an additional $2,000 annual tax burden at least for those already struggling, mainly to subsidize high-income earners, adds insult to injury.
Furthermore, it’s vital to recognize that the burden of unpaid student loans should not fall on low-income earners or Americans who did not attend college. Incentives play a crucial role in influencing markets.
By removing the incentive for student loan borrowers to repay their debts, we may encourage more individuals to pursue higher education and accumulate debt without the intention of paying it back. After all, why would they when it can be written off through higher taxes for everyone?
The ripple effect of this plan could be far-reaching.
It may make college more accessible for some, opening the floodgates for students and the need for universities to expand and hire more staff, leading to even higher college tuition. This perverse incentive will set a precedent that will create a cycle of soaring tuition, which would counteract the original goal of making higher education more affordable.
While the intention behind President Biden’s student loan forgiveness may appear noble (in likelihood, it is a rent-seeking move), the results may prove detrimental to our nation’s economic stability and fairness. And if the debt is monetized, more inflation will result.
Forgiving student loans will exacerbate existing problems, with the brunt of the burden falling on lower-income Americans. Instead of improving the situation, it will likely create an intricate web of financial consequences, indirectly affecting the very people it aims to help. But that is the result of most government programs with good intentions.
Vance Ginn, Ph.D., is president of Ginn Economic Consulting, chief economist or senior fellow at multiple state thinks across the country, host of the Let People Prosper Show, and previously the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20. Follow him on X.com @VanceGinn.
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