By josh.eboch on Aug 11, 2009
Back in June, the Washington Times reported on what seemed then to be a straightforward exchange between Rep. Paul Ryan (R-WI) and Federal Reserve Chairman Ben Bernanke:
“The Treasury is issuing debt and the central bank is buying it,” Mr. Ryan said. “It gives the alarming impression that the U.S. one day might begin to meet its financial obligations by simply printing money.”
But Mr. Bernanke adamantly denied that would happen. “The Federal Reserve will not monetize the debt,” he said.
Maybe Mr. Bernanke misspoke. Perhaps he thought monetizing the debt meant actually paying it off. Which, as Treasury Secretary Timothy Geithner demonstrated last week, the federal government obviously has no intention of doing.
Because if he realized that he was promising, under oath, not to print money and devalue the dollar, how could Mr. Bernanke, barely two months later, do exactly what he said he was not going to do?
This is hardly the first time the credibility of the Fed and the motives of its chief have been called into serious question.
But in the context of current policy debates over dramatically expanding government control, now might be a good time to ask: At what point will Americans stop giving the benefit of the doubt (along with enormous wealth and power) to politicians who have consistently proven they cannot be trusted?
Never mind, forget I asked. Just go back to sleep and wait for the amazing free health care that Nancy Pelosi swears no one will ever have to pay for.
The currency is fiat. It is numbers on a piece of paper.
ReplyDeleteThe joke is on us.
How long now before the world switches currency, people we havent seen anything yet.
ReplyDeleteGood point about Pelosi and her statement that not a dime will need to be paid for any care. Imagine how the insured will react when they find out that they still have co-pays for doctor's visits and drugs. While they still pay out of each check for insurance and that insurance benefit will be taxed to pay for others to receive free health care. I'm sure many Americans will be happy to keep their current insurance and pay for others who may or may not work, to receive health care without it costing them one dime. Read the op-ed she wrote with Steny Hoyer for USA Today if you don't believe it.
ReplyDeleteThe printing of money and our incredible debt will lead to ultra inflation in the next few years. Taxes will need to raised extremely high in order to cover this debt. You know the politicians don't have the guts to cut spending in order to pay off the debt.
To 10:38,
ReplyDeleteYou are absolutely correct.
For all you people who have retired or are anticipating retirement in the next few years, consider this: Let's say you get $3,500/month in retirement income. After the government gets through monetizing the debt, your $3,500 will be able to buy a single basket of groceries, maybe. A few years after that it might get you a loaf of bread. Think post-WWI Germany.