Sunday, November 21, 2010
The Fed Did Its Job, Now Washington Needs To Come Through With Fiscal Policy
The tone of this article is fairly optimistic about the current direction of the United States. The author suggests that Bernanke's monetary policy has been exactly what the current state of the economy needed, and now it is up to U.S. fiscal policy to further the economy's recovery. Bernanke has limited the short-term effects of a slow economy, while not sacrificing the long-term economic growth potential. However, the author is pessimistic about the U.S. implementing an appropriate fiscal policy given Obama's track record in recent history; he goes onto suggest that the future fiscal policy should promote investing and business growth.
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I like that this author promotes fiscal policy that targets investing and business growth. Many other articles are saying stop increasing the money supply and start raising taxes. We know from the great depression that it is bad to raise taxes during a contraction and good to grow the money supply and increase expected inflation. I like reading a new angle to fiscal policy. I think this one has more merit than the "raise taxes" argument.
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