I’m not convinced. I’m not persuaded by Federal Reserve Chairman Ben Bernanke’s recent comments about how we must start trimming the nose hairs of the federal government’s runaway deficit spending.
Bernanke has been a great enabler of economic disaster. By pumping so much easy credit into the economy after the Great Internet Bubble popped early in the decade, Bernanke and his predecessor made it easy as pie to pile up all the bad housing loans that produced the Great Housing Bubble late in the decade.
His new solution? Massive new multi-billion bailouts of bad economic actors. More and faster pumping of the money supply. More and faster enabling of bad investments and bad debt by working to keep federal-fund interest rates vanishingly low.
Now Bernanke wants America to reduce its sky-high deficits — $1.42 trillion for fiscal year 2009. He says we need a “clear commitment to reduce federal deficits over time.” Sure Ben, sure. I don’t disagree. But talk is cheap. Especially vague, general talk that your own actions persistently belie.
Bernanke seems to have some inkling that the fantasy economy can’t persist forever. He has, alas, no real idea of how to return to reality. He’s the guy who blows up a dam and then wants to lay down some twigs to stop the flood.
Stop blowing up the economy, Ben.
This is Common Sense. I’m Paul Jacob.