Study by economists at the nonpartisan; American Institute for Economic Research concludes that Federal Reserve actions of keeping interest rates low have cost -the economy $256 billion to $587 billion in consumption

Study by economists at the nonpartisan Ford and Vlasenko; American Institute for Economic Research concludes that Federal Reserve actions of keeping interest rates low have cost

-the economy $256 billion to $587 billion in consumption

-2.4 million to 4.6 million jobs

-and shaved 1.75 and 3.32 percentage points to gross-domestic-product growth.

-borrowers and speculators have benefited from low costs of capital, while savers the average person have suffered

The Fed argues that its policies of easy money and huge asset purchases have prevented catastrophe, deflation and three million jobs to the economy in by 2012.  Without the Fed there would have been 1.8 million few jobs.

By its own reports, it has created these jobs by boosting stock prices, those who own businesses who borrow, own homes and own cars.  Shutting out the poor. 

The Fed says it has created a "wealth effect" by encouraging savers to move from less risky deposits such as bank accounts and CDs to riskier assets such as equities, venture capital and private equity.  But they fail to count the net interest that savers would have  gained from their current actions and fails to factor in added risk to their portfolio.

Ford and Vlasenko , one of the researches that put together this research noted that each point in lost yield cost $52 billion in consumption.  They assume

$9.9T in interest rate sensitive assets, minus taxes gives them about $74 billion of which 70% would have been used for consumption.  If life-insurance and pension funs are added the interest sensitive assets balloon to 18.8 trillion and the losses rise to $587 billion.

Adding more problems to the Feds argument is that the behavior of investors have not changed and more people are keeping on to savings accounts and bonds.  This has yet a chilling effect on pensioners, savers and insurance companies.

Savings account deposits have grown in the last year in a half and money still flows out of mutual funds.  Research is now showing that the lower rates themselves are having a disastrous effect on consumption.