Bernanke Passes The Buck

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Given that economic cycles are largely driven by monetary policy, it's always a bit sick-making to hear a chairman of the Federal Reserve calling for a fiscal solution to avoid a recession. Federal Reserve Chairman Ben Bernanke just endorsed a fiscal stimulus package, just as long as it would be implemented "quickly." He said a stimulus package would give the Fed more tools as it works to avoid an economic downturn. At certain times he seemed to be talking from another planet, noting that it was important that a stimulus package not lead to a loss of "fiscal discipline." Has he even listened to the spending plans of our leading presidential candidates? Fiscal discipline is long gone, baby, and it's not likely to make a comeback any time soon.
It's hard not to look at this as Bernanke trying a little CYA in advance. Later, when the stimulus package becomes a spending boondoggle, he can say: "Look, I warned you people. This isn't what I called for. So this isn't my fault at all." He's clearly been reading Alan Greenspan's memoirs.

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