The British government has rejected calls for an easing of its austerity policy in favor of a new fiscal stimulus for the economy. The IMF cut its growth forecasts for Britain on Wednesday — warning that the country was in danger of slipping into recession.
The Federal Reserve has announced a plan to drive long-term interest rates even lower. But with borrowers still too cautious to take on additional debt, will the move have a positive effect? Some experts say they're not holding their breath. "The Fed can only do so much," one analyst says.
Under President Reagan, capital gains were taxed at a higher rate than earned income. Since then, the situation has reversed, and unearned income, the province of the very rich, is taxed at a significantly lower rate than most workers' wages. Polls show the public supports changing this. Will Congress?
Federal Reserve Chairman Ben Bernanke has been criticized recently by Republican presidential candidates who called for his firing and an audit of the central bank. Low opinions of the Fed come from a long history of criticism of its power and secrecy, extending back to Thomas Jefferson.
The Federal Reserve announced Wednesday it will indeed be "twisting" its portfolio in a bid to drive down long-term interest rates. Fed policymakers also announced steps to support the mortgage market.
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