Did you see Fed Chairman Ben Bernanke's testimony on Capitol Hill yesterday?
An editorial in today's Wall Street Journal characterized it as Ben's application for another term as Fed Chair.
I'm referring, of course, to his fawning and eager agreement that Congress should pass another multi-hundred billion dollar 'stimulus' package.
Surely Bernanke doesn't think we saw any lasting effects of the last stimulus, does he? Other than increasing a deficit with which Congressional Democrats have tarred President Bush for years, it didn't make any difference.
Am I the only person left who believes that only permanent tax rate cuts have a quick and lasting effect on economic behavior?
Or, having passed a $700B 'urgent' TARP bill that has been dwarfed by the Treasury buying equity in our nation's banks, has Congress simply decided it no longer matters what deficits we create by paying citizens to spend now?
This just makes no sense whatsoever. It seems that any sense of self-reliance in our country has vanished.
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Foreign ownership of the national debt is as of July 2008 $2.7 trillion. The balance is held by Intragovernmental Holdings and Debt Held by the Public. Where does the money for all these bailouts and stimulus program come from? http://nomedals.blogspot.com
It comes from the confidence of holders of US dollars. And the ability of the US economy, over time, to be capable of repaying and/or rolling over those debts.
Remember, as a store of long term, stable value, relative to other countries' currencies and political instability, the dollar is viewed as preferrable.
-CN
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