Quantitative Easing: Hypocritical and Destructive
QE3 started this week — $40 billion a month for an unlimited amount of time.
According to Bloomberg, Bernanke said, “We’re looking for ongoing, sustained improvement in the labor market,”. “There’s not a specific number we have in mind. What we’ve seen in the last six months isn’t it.”
So here we have a Fed who is supposed to be independent. It’s clear instead that the Fed is just doing the bidding of Obama — whose policies have failed to produce the results that the Fed is now trying to now create (right before the election) with another round of quantitative easing.
But support for quantitative easing is just another blatant example of political hypocrisy. The rationale behind quantitative easing – that it spurs investment – is vilified by the Democrat leadership when the same strategy is applied to “tax cuts for the wealthy”.
Bernanke, Geitner, the Fed, and the liberal members of Congress all supported and pushed QE2. They argued that purchasing huge amounts of Treasury securities would reduce long term interest rates. The effect would be stimulative because this action forces the other potential buyers to do something else with their money – invest in higher risk and more economically stimulative activity.
Yet aren’t these the same people who are against tax cuts for the highest-income earners? Their argument is that those higher income earners would not put their tax savings for economic stimulative use. This is simply untrue.
The supporters of quantitative easing praise lower interest rates but not lower tax margins? They laud investment as a key strategy for economic recovery – but only when it is artifically and unconventionally controlled by the government? ”The rich” should not be able to invest their own money, but have to give the government more (for them to invest it)? This patent double standard is both calculated and conniving — and it ultimately endangers the economic future of this country.
QE3 just makes the economic situation worse, especially because of its open-endedness. We now face the growing threat of inflation and the fall of the value of the dollar, a cut in our credit rating, and increased federal debt (as if we don’t already have enough). Couple that with our looming tax increases for 2013, and we have both consumers and investors who are uncertain about what to do with their money anymore. Plain and simple. That hurts, not helps.
More government interference is not the solution to our economic problems.
crossposted at alanjoelny.com