Is the Fed helping or hurting the U.S. economy and recovery?
*Texas Straight Talk, by Congressman Ron Paul, January 31, 2011:
''Unemployment continues to plague our economy. In spite of
constant claims that we have just turned the corner into recovery, the
jobs reports remain grim with no real signs of improvement. While
Keynesian economists and big government apologists scratch their heads
about persistent unemployment in spite of unprecedented government
'investment' in the economy, free market economists understand the
problem perfectly well. In short, they understand that we are
looking to the Federal Reserve to solve an unemployment crisis that the
Fed itself largely created.
For example, the Fed is supposed to maintain full employment as half of
its 'dual mandate.' But the Fed simply has the wrong tools to do
this. In fact, its credit expansion and manipulation of interest
rates cause harm when they are applied to 'help' the economy. As
we saw with the housing boom and bust, Fed-created inflation cannot be
sustained without harmful consequences. The Fed's artificial boom
led to the unemployment we're suffering today. The Fed is not a
small business or a manufacturer that creates value or increases
productivity to sustain real job growth. It literally destroys
value by printing more money, and distributing it through sweetheart
deals to well connected banks and corporations (including foreign
banks!). The only success the Fed has had in maintaining full
employment has been on Wall Street where it props up crony banks and
investment houses to prevent them from going bankrupt as they
should. Instead, they survive to malinvest another day while
their executives enjoy jackpot bonuses.''
''Until those in power understand the harm they do with central
economic planning, we will continue to slide backwards and lose
jobs. The Fed needs to stay out of the job creating business
altogether and the federal government needs to focus on its
constitutional duties. Just when we need government to back off,
we hear about more government intervention in the economy in the form
of more spending, only they call it 'investment.' It is more
properly called 'malinvestment,' and the resources that are funneled
into industries by government policies will only hurt employment more
in the long run.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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