Thoughts On Quantitative Easing
Something about Bernanke’s speech today at the National Press Club regarding QE2 struck me.
Administrative support for quantitative easing is just another blatant example of political hypocrisy. The rationale behind quantitative easing – that it would spur investment – was vilified by the Democrat leadership when the same strategy was applied to “tax cuts for the wealthy”.
Bernanke, Geitner, the Fed, and the liberal members of Congress all support and push QE2. They argue that purchasing huge amounts of Treasury securities will reduce long term interest rates. The effect will 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 were against tax cuts for the highest-income earners? Their argument then was that those higher income earners would not put their tax savings for economic stimulative use. Though this is not correct (as a CPA financial and tax advisor to that very segment of the population, I can assure you that large portions of tax savings are invested), the hypocrisy here is quite staggering.
The supporters of QE2 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? This dichotomy is both calculated and conniving and ultimately endangers the economic future of this country.
UPDATE: THE WASHINGTON TIMES PRINTED MY LETTER TO THE EDITOR ON THIS VERY TOPIC