FrankRep
01-18-2008, 10:17 AM
Bernanke Advocates Quick Fix to Aid Economy
The John Birch Society (http://www.JBS.org/)
Jan 18, 2008
ARTICLE SYNOPSIS:
Federal Reserve chairman Ben S. Bernanke, speaking to the House Budget Committee on January 18, gave his opinion that a recession is probably not imminent. Nevertheless, Bernanke advocated aggressive action by the Federal Reserve to bolster an economy he admitted is "growing at a relatively slow pace."
Follow this link to the original source: "Fed Chief Backs Quick Action to Aid Economy (http://www.nytimes.com/2008/01/17/business/17cnd-fed.html?hp)"
COMMENTARY:
"We currently see the economy as continuing to grow, but growing at a relatively slow pace, particularly in the first half of this year," Mr. Bernanke told the House Budget Committee on January 17. In exchanges with members of the committee, the Federal Reserve chief tried to convey optimism about the struggling economy, using such phrases as "extraordinarily resilient" to assess its state. He spoke of a "liquid financial market that is in the process of trying to repair itself."
As the White House and Congress considered "an economic stimulus package" (which House minority leader, John A Boehner (R.-Ohio) said could cost upwards of $100 billion to $150 billion), Bernanke said any such package should be "explicitly temporary." He said that "Stimulus that comes too late will not help support economic activity in the near term, and it could be economically destabilizing if it comes at a time when growth is already improving."
Tony Fratto, deputy White House press secretary, articulated the Bush administration's goals as follows: "The president does believe that over the short term in the economy that some boost is necessary. That's where his inclination is."
It is expected that President Bush will make an economic stimulus package the centerpiece of his State of the Union address.
If all of this discussion by our nation's monetary and political leaders does not exactly inspire confidence in you, you are not alone. On the day all of this was being discussed, the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9, down from a revised reading of negative 1.6 in December. The Dow responded by falling 307 points.
Almost no one with enough influence to be quoted in the national media seems willing to ask the tough, yet fundamental, questions, however. Such as:
• When most of our economic problems are attributable to too much government spending, how can anyone believe that spending an additional $100 billion to $150 billion (probably more) will help our economy?
• When much of the instability in our housing markets can be traced to economic "bubbles" created several years ago when the Fed held interest rates artificially low, why does anyone think the Fed can come to our rescue? ("We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," Mr. Bernanke offered, alluding to interest-rate cuts.)
• And when Americans already have a low rate of personal savings and a correspondingly high rate of personal debt (http://www.cbsnews.com/stories/2006/02/07/business/main1293943.shtml), why would anyone think that enticing American to "spend more" will be the best way to strengthen our economy?
The answers to these and similar questions can only be determined if Americans abandon the false concept that was promoted in the early 1930s that it is somehow government's responsibility to manage the economy. During the Great Depression, Presidents Herbert Hoover and Franklin D. Roosevelt (with greater "success" than his predecessor) advanced the idea that when the economy was broken it was government's responsibility to fix it.
Although most Americans' knowledge of economics may be a little more sophisticated than it was back then — particularly in realizing that the Federal Reserve has as much, or more, impact on the economy than does our federal government, of which the Fed is a partner, but not a part — most Americans look to some entity in Washington to do more. Sadly, the large numbers of Americans whose debts exceed their savings do not expect more responsible behavior from the entities in Washington that manage the taxes deducted from their payrolls each week. But the solution is not the "explicitly temporary" one proposed by Chairman Bernanke.
Since the creation of the Federal Reserve System in 1913, the Fed has become the "enabler," of big, fiscally irresposible government — buying government securities with unbacked paper currency and diminishing the value of the dollar by increasing the money supply (inflation).
The long-tern answer to our economic woes is to heed the advice of the Austrian (http://en.wikipedia.org/wiki/Austrian_School) school of economics (represented by Ludwig von Mises and Friedrich von Hayek) and abolish the Federal Reserve. Accompanied by a return to a monetary system that is backed by precious metals, a vast reduction in government spending, and a balanced budget, economic stability would be restored.
Many skeptics shun such advice, however, because such an economic system would not support the many unconstitutional government programs that depend on deficit spending, an inflated currency, and central management of our banking system to survive.
In view of our current economic problems, however, there is another commodity whose survival is even more threatened — the U.S. taxpayer.
SOURCE:
http://www.jbs.org/node/6872
...
The John Birch Society (http://www.JBS.org/)
Jan 18, 2008
ARTICLE SYNOPSIS:
Federal Reserve chairman Ben S. Bernanke, speaking to the House Budget Committee on January 18, gave his opinion that a recession is probably not imminent. Nevertheless, Bernanke advocated aggressive action by the Federal Reserve to bolster an economy he admitted is "growing at a relatively slow pace."
Follow this link to the original source: "Fed Chief Backs Quick Action to Aid Economy (http://www.nytimes.com/2008/01/17/business/17cnd-fed.html?hp)"
COMMENTARY:
"We currently see the economy as continuing to grow, but growing at a relatively slow pace, particularly in the first half of this year," Mr. Bernanke told the House Budget Committee on January 17. In exchanges with members of the committee, the Federal Reserve chief tried to convey optimism about the struggling economy, using such phrases as "extraordinarily resilient" to assess its state. He spoke of a "liquid financial market that is in the process of trying to repair itself."
As the White House and Congress considered "an economic stimulus package" (which House minority leader, John A Boehner (R.-Ohio) said could cost upwards of $100 billion to $150 billion), Bernanke said any such package should be "explicitly temporary." He said that "Stimulus that comes too late will not help support economic activity in the near term, and it could be economically destabilizing if it comes at a time when growth is already improving."
Tony Fratto, deputy White House press secretary, articulated the Bush administration's goals as follows: "The president does believe that over the short term in the economy that some boost is necessary. That's where his inclination is."
It is expected that President Bush will make an economic stimulus package the centerpiece of his State of the Union address.
If all of this discussion by our nation's monetary and political leaders does not exactly inspire confidence in you, you are not alone. On the day all of this was being discussed, the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9, down from a revised reading of negative 1.6 in December. The Dow responded by falling 307 points.
Almost no one with enough influence to be quoted in the national media seems willing to ask the tough, yet fundamental, questions, however. Such as:
• When most of our economic problems are attributable to too much government spending, how can anyone believe that spending an additional $100 billion to $150 billion (probably more) will help our economy?
• When much of the instability in our housing markets can be traced to economic "bubbles" created several years ago when the Fed held interest rates artificially low, why does anyone think the Fed can come to our rescue? ("We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," Mr. Bernanke offered, alluding to interest-rate cuts.)
• And when Americans already have a low rate of personal savings and a correspondingly high rate of personal debt (http://www.cbsnews.com/stories/2006/02/07/business/main1293943.shtml), why would anyone think that enticing American to "spend more" will be the best way to strengthen our economy?
The answers to these and similar questions can only be determined if Americans abandon the false concept that was promoted in the early 1930s that it is somehow government's responsibility to manage the economy. During the Great Depression, Presidents Herbert Hoover and Franklin D. Roosevelt (with greater "success" than his predecessor) advanced the idea that when the economy was broken it was government's responsibility to fix it.
Although most Americans' knowledge of economics may be a little more sophisticated than it was back then — particularly in realizing that the Federal Reserve has as much, or more, impact on the economy than does our federal government, of which the Fed is a partner, but not a part — most Americans look to some entity in Washington to do more. Sadly, the large numbers of Americans whose debts exceed their savings do not expect more responsible behavior from the entities in Washington that manage the taxes deducted from their payrolls each week. But the solution is not the "explicitly temporary" one proposed by Chairman Bernanke.
Since the creation of the Federal Reserve System in 1913, the Fed has become the "enabler," of big, fiscally irresposible government — buying government securities with unbacked paper currency and diminishing the value of the dollar by increasing the money supply (inflation).
The long-tern answer to our economic woes is to heed the advice of the Austrian (http://en.wikipedia.org/wiki/Austrian_School) school of economics (represented by Ludwig von Mises and Friedrich von Hayek) and abolish the Federal Reserve. Accompanied by a return to a monetary system that is backed by precious metals, a vast reduction in government spending, and a balanced budget, economic stability would be restored.
Many skeptics shun such advice, however, because such an economic system would not support the many unconstitutional government programs that depend on deficit spending, an inflated currency, and central management of our banking system to survive.
In view of our current economic problems, however, there is another commodity whose survival is even more threatened — the U.S. taxpayer.
SOURCE:
http://www.jbs.org/node/6872
...