Ben Bernanke is definitely trying hard to overtake Arthur Burns and G. William Miller (those wonderful guys who helped give us the 1970s) as the worst Fed Chairman of the modern era. But unlike Burns and Miller, who “earned” their poor reputations with bad monetary policy, Bernanke is trying to cement his place in history by being a stooge for the big-government policies of the Washington establishment (he also is getting lots of criticism for QE2 and other monetary policy actions, but let’s give Bernanke the benefit of the doubt and assume all those decisions will somehow work out for the best).
Bernanke frequently pontificates about the supposed horrors of deficits and debt (I write “supposed” because the real problem is spending, with red ink being a symptom of a government that is far too large). Yet he endorsed Obama’s failed stimulus. He’s also asserted that reducing the burden of government spending would hurt the economy. And he was an avid supporter of the TARP bailout.
Now he’s trying to discourage GOPers from seeking budgetary savings as part of a proposed increase in the debt limit. Here’s a blurb from the AP report.
Federal Reserve Chairman Ben Bernanke on Tuesday urged Republicans to support raising the nation’s borrowing limit. He said threatening to block the increase to gain deeper federal spending cuts could backfire and worsen the economy. Even a short delay in making payments on the nation’s debt would cause severe disruptions in financial markets, damage the dollar and raise serious doubts about the nation’s creditworthiness, Bernanke said.
By the way, I’ve previously debunked Bernanke’s demagoguery about disrupted financial markets. The federal government this year will collect 10 times as much revenue as needed to service the national debt.
Let’s close with a thought experiment. What do you think Bernanke would say if Senate Republicans got suckered into a tax increase and that tax hike was attached to a debt limit, but House GOPers were refusing to go along? It’s just a guess, of course, but I’m quite confident that Bernanke would completely reverse his position about the debt limit and suddenly say something like “it is critical to include such a measure to demonstrate seriousness about fixing the fiscal mess in DC.”
What it would actually demonstrate, though, is that Bernanke is a tool for big government.
