On Thursday, the Commerce Department revised downward its estimate of GDP growth in the first three months of the year. New data reveals the economy shrank by 1.0% in the first quarter, a sharp reversal from the agency’s initial estimate of 0.1% growth. The new estimate is the first drop in GDP since the first quarter in 2011. Mostly unreported, however, is the fact that the Federal Reserve has pumped almost $2 trillion into the economy since that economic contraction three years ago.
At the end of 2010, just ahead of the economic contraction at the beginning of 2011, the Federal Reserve announced QE2, its second round of “quantitative easing.” In that round of pumping liquidity (read, cash) into the market, the Fed would buy $600 billion worth of US debt. That buying took place in the first 2 quarters of 2011.
Towards the end of 2012, just ahead of the presidential election, the Fed announced QE3, a new round of flooding the market with money. Initially pegged at around $40 billion a month, the Fed soon increased its purchases of securities to $85 billion a month throughout 2013.
In the past couple months, the Fed has begun “tapering,” i.e. scaling back, its securities purchasing. Currently, the Fed is injecting around $45 billion a month into the market.
Totally up all of this stimulus, the Fed has pumped somewhere around $1.7 — $2 trillion into the economy over the last three years. At the end of 2010, current-dollar GDP was $14.6 trillion. The Commerce Department reported Thursday that current-dollar GDP is now $17.1 trillion.
In other words, the Fed stimulus program accounts for almost all growth in economic output for the last three years. Keep in mind, those figures are in “current-dollars,” which don’t account for inflation since 2010.
Absent the Fed’s money-printing machine, there has been no real growth in the economy for the past three years.
Source: Breitbart Feed