We all agree that we need to create jobs in this country. The U.S. economy has been stalled for years. While coming down from its highs of over 10 %, unemployment still hasn’t improved much, hovering between 8.1% to 8.3%, with no signs of enough job growth to stimulate our economy and get people back to work.
So what do we do, especially in an election year? We print money!
Federal Reserve Chairman Ben Bernanke contend that he is trying to help our economy by doing something that President Obama can’t, nor can Congress can do and which Mitt Romney opposes. He is electronically creating money! The Fed says that it will “buy” $40 billion a month in mortgage bonds until the high unemployment eases significantly. The Fed’s move is on top of its $85 billion-a-month purchases of Treasury securities under the existing program.
How can the U.S. economy afford this? We can’t and what Bernanke is doing could lead us into a Depression. His thinking is that by creating money and pumping it into our economy it will hold down long-term interest rates long enough to stimulate private-sector borrowing and hiring. What is ludicrous about this thinking is that it hasn’t worked yet, so why now?
I guess he felt compelled to do something, but at what cost to the U.S. economy? The Fed has kept a key short-term rate on loans between banks near zero for over three years and has pumped hundreds of billions of dollars into our financial system. Again, who is paying for this? Of course the tax payers who will be hit with such high inflation in the next three to five years they won’t know what hit them.
I am not an economist, but I did take economics and what Bernanke is doing will not stimulate lending; it will just make the banks richer. They will still only give out loans to people with high credit ratings. So, what’s the point of funding the banks when they don’t lend money? How does that exactly create jobs?
Really, what is happening in our country? Is Ben Bernanke our silent President?