Charles Evans, President of the Federal of Chicago has recently demanded “increased amounts of policy accommodation” in order to be proactive in reducing the current national unemployment rate which has hovered around and refused to drop below nine percent since 2009. In Caroline Salas Gage’s November 15th article on Bloomberg, Fed Chariman Ben S. Bernanke discusses the very real possibility that the current unemployment rate may not budge more than one percentage point in a positive direction within the next two years. For Evans, as well as many other national officials, this projection is unacceptable.
While current efforts to improve the economic climate and the current unemployment rate are seemingly ineffective, a few suggestions, all built around the idea of economic stimulus, have been brought to the table. Don’t worry, we’re not talking about free handouts. The latest suggestions include: a commitment to keeping interest rates as low as possible until the unemployment rate falls consistently below seven percent; increased purchasing of mortgage bonds; new communication methods to inform the public of the Fed’s policies and goals; and, additional asset purchases. While the suggestions are innovative and certainly proactive, the question still looms from the public voice, “Is it enough and will it work?” While the Fed declares that the economy is headed in the right direction, reports the national GDP will increase from 2.5 to 3 percent by the end of the fourth quarter are not the clean cut figures that the public wants to hear. Are we doing enough to get Americans back to work? Are our current efforts the most efficient ways to meet the nation’s needs? And, most importantly, are unemployed Americans going to have the patience to wait two years or more before we see any substantial improvements?