Posted on 11/16/2010 4:45:37 PM PST by JohnRLott
The current inflation rate of 2 percent is "too low." That is at least if you believe Federal Reserve Chairman Ben Bernanke. With the economy growing "too slowly to bring down unemployment," Mr. Bernanke's solution is to increase inflation.
The Federal Reserve last week started printing up $600 billion to buy U.S. Treasury Bonds and another almost $300 billion to buy mortgages. The printing more dollars will reduce the value of the dollar just as doubling the number of apples will reduce the price of apples.
A falling value of the dollar is what is called “inflation.” The problem is that this "stimulus" will only temporarily reduce unemployment and get the economy growing by tricking people into making mistakes that they will later regret, mistakes that will cost the country much more in the long run than will be gained by these temporary improvements. With unemployment stuck at least at 9.5 percent for a record 15 months, the desire "to do something" is understandable, but the only people who this policy will help are the politicians currently in office.
You would think that all economists would have learned the lessons of the 1960s and 1970s: higher inflation rates only temporarily reduce unemployment. . . . .
(Excerpt) Read more at foxnews.com ...
Thanks unkus. I think we both recommend term limits (not the book, the real thing), am I right? :’)
No comment :)
;’)
bookmark for later
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