Kudlow quotes George Mason University professor Russell Roberts who reports that only $36 billion of the stimulus has been spent through May, out of a total $787 billion.
Thus, there is still time to stop the madness. Writes Kudlow:
Testifying before the House Budget Committee this week, Ben Bernanke said that when the time comes, the Fed will raise interest rates in order to stop inflation from building in the next recovery. He also asked for “fiscal balance” to sustain financial stability. On the surface -- in terms of keeping prices stable and restoring value to the softening U.S. dollar -- this is positive. Surely Mr. Bernanke wants to do right for America, and he’s giving it his best shot.If it is true that Bernanke is not independent of the Obama Administration, this is an even greater disconcerting sign. No Fed chairman is ever completely independent of the man in the White House, but some are more docile than others. All indications I get from within the Fed is that Bernanke is a docile man. Not good. And he may be attempting to stave off a rear guard attack by Larry Summers.
But when you talk to traders and economists, the whisper story is that Bernanke and the Fed are no longer truly independent of the Obama White House and Treasury. As a result, Bernanke will not be able to slow down the printing presses and gradually lift the near-zero target rate in a timely and effective manner. Already the Fed has created more than $1 trillion in new cash, and the M2 money supply is growing at its fastest pace in 25 years.
This monetary explosion explains what’s really driving the dollar down and Treasury rates up (alongside rising gold and oil prices). It’s not huge budget deficits, but the growing fear that a less-than-independent Fed will keep pushing new money into the financial system in order to fund Obama’s liberal spending policies.
We are on the brink of a major inflation and there doesn't appear to be a strong willed inflation fighter anywhere in the Administration or the Fed. Kudlow's rollback suggestion is, unfortunately just wishful thinking. We are taking this economy right through a major storm.
Wow.
ReplyDelete"...only $36 billion of the stimulus has been spent through May, out of a total $787 billion."
Wow!!
There is something going on here other than a 'rescue'.
My guess? A small but politically well connected group of companies got themselves in trouble and wanted their political friends to bail them out. But the only way to get the bucks to the favourites was to declare an emergency and throw money at everyone, whether the needed it or not, wanted it or not.
This is a bit like the kid who triggers the school fire alarms so he can get out of school.
The trouble here in the real world is the school principal and class clown are in cahoots.