Monday, February 6, 2012

Paul Ryan & Ben Bernanke on the Federal Reserve's Mission

House Budget Commitee Chairman Paul Ryan's and Federal Reserve Chairman Ben Bernanke at a hearing on 2/2/12:

"A lot of us believe that the Federal Reserve was too loose for too long in the 2003-2005 period - and that is what, in part, led to the asset bubble and the mal-investment that occurred, and the problems we have today. I know you don't agree with this. But because you don't agree with that, our fear is that you're just going to repeat these same mistakes again - but by orders of magnitude that we can't even comprehend right now.

"And that the Federal Reserve, who's primary goal is to manage our money, is involving itself in fiscal policy. It's sort of bailout out fiscal policy, because the branch of government in charge of fiscal policy -- this branch - is not doing its job. And a budget hasn't passed a budget in two years. We're going to pass a budget -- we did one last year -- but it's not passing -- there's nothing in the Senate, so: fiscal policy isn't being done the way it needs to be done.

"But that's not an excuse for the Federal Reserve to step in and try and bail us out, because that could be done at the expense of the priority, which is unique to the Fed Reserve, of maintaining out currency as a reliable store of value. And we fear that these exercises and these new ambiguous statements will compromise that."

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