Rick Perry says printing money akin to treason
The presidential candidate says the Federal Reserve would be playing politics if it printed more money before the election.
Texas Gov. Rick Perry, campaigning for president this week, said the Federal Reserve's printing more money between now and November 2012 would be like an act of treason.
"If this guy (Bernanke) prints more money between now and the election," Perry said, "I don't know what y'all would do to him in Iowa, but we -- we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous in my opinion."
Post continues below:
Yikes. Perry was responding to a question in Iowa about what he would do with the Federal Reserve. Later, he said that if the Federal Reserve prints more money between now and the election, it would be playing politics to help President Barack Obama, according to ABC News.
He also said this: “We've already tried this. All it’s going to be doing is devaluing the dollar in your pocket and we cannot afford that."
His comments drew some pretty quick responses. Tony Fratto, a Republican who worked in the Bush White House and the Treasury Department, described Perry's words as "inappropriate and unpresidential." Former Bush adviser Karl Rove said, "You don't accuse the chairman of the Federal Reserve of being a traitor to his country. Of being guilty of treason."
Obama's spokesman responded as well, saying, "When you are president or running for president, you have to think about your words. The Fed's independence is important."
The New York Times described the comments as the latest in a "long string of salty remarks" from the Texas governor. And some Republicans worry that Perry is too brash, too much of a Southern hard-liner to win votes in swing states, Politico reports.
"From his first statewide race for agriculture commissioner to his bruising reelection campaign last year, Perry has always made sure to be more conservative, more confrontational and, above all, more ostentatiously Texan than his chief opponents," Politico notes.
But putting aside talk of treason and treachery -- ironic from someone who suggested in 2009 that Texans may want to secede from the union -- let's take a look at this issue of printing money.
Really, it's Ben Bernanke's job to print money, The Washington Post reports. "To accuse any Fed chairman who would 'print money' of treason is like criticizing the transportation secretary for building roads," writes Neil Irwin. "It is the job of the Fed, or any central bank, to print money."
But the actual practice of printing currency isn't the real issue here. In fact, printing money is only one of several powerful tools the Fed has at hand to influence the economy. Here are its biggest weapons:
--Raising and lowering short-term interest rates. Cutting rates helps improve the economy.
--Changing the requirements for how much money banks are required to hold on to. Raising the reserves generally makes it harder for people to get loans.
--Buying or selling bonds. The Fed adds money to the economy by buying U.S. Treasuries, and it takes money out of the system by selling them. Buying bonds is essentially the same thing as printing money, but it doesn't actually increase wealth. (Read "There's Nothing Wrong with the Fed 'Printing Money,'" by the former president of the Federal Reserve bank of Dallas.)
The bigger issue is how tight or loose the Fed should play with these tools. For most of the Fed's history, politicians from both parties have pushed the Fed to play loose, The Post notes. But now, Republicans are pressuring the Fed for tight money policies even at a time of 9% unemployment.
"The question is whether they follow up these demands with their actual appointments to the Fed board," writes Neil Irwin. "Would a President Perry appoint Fed governors who share his hawkish views? Or would he, after taking office, see some of the advantages of loose monetary policy in a time of high joblessness and low inflation?"
Perry's comment shows a complete lack of understanding of what money is and how it works.
What does he want us to do, go back to a gold standard? How far back must we go to satisfy these ultra-conservatives? To the 1950's? The Roaring 20's? Maybe the 1860's, we can all ride horses and wear six shooters like Texas Rangers.
Stop dreaming about the past, it is gone... sure, the 1950's were great - unless you were black or gay or poor. Get over it, stop preaching our limitations, we are much better than that. Start planning our future greatness through investments in infrastructure, innovation and energy independence,
A recession under Obama would be a depression under any Republican clown!
Google an image of "money printing chart", and it's absolutely insane.
Treason is definately inaccurate. It's called counterfeiting. We can't do it, but the government can apparently print as much as it wants, and get away with.
This article describes printing money without addressing the shear amount of money being printed now. Yes, when the Fed prints money at a linear rate, it is "normal." That "normal" rate of printing that has caused inflation and devalued our dollar, which most Americans are oblivious to.
But when the Fed is printing money at an EXPONENTIAL rate, it is not normal. It is criminal, and the crime is counterfeiting. Printing money you should NEVER be allowed to print under any circumstances is counterfeiting. Just Google that image of "money printing chart", and it'll be revealed to you how insane our monetary policy has recently become.
The full devaluation of our dollar hasn't even hit us yet. It's delayed.
In a perfect world, we would have a couple $1T in reserves for an economic 'rainy day'. Unfortunately, two unfunded wars and horrific criminal activity on Wall Street drained our resources at a very bad time... what to do?
We can hunker down and slip into Depression, spiraling in with an explosion of unemployment... or we can borrow more, keep teachers, firefighters and police employed, keep cities and counties from declaring bankruptcy, get industry back on track and basically spread out the pain. We have a history of inflating our way out of economic crises. We will pay everyone back with weaker dollars and our exports will be more competitive. Not fun but consider the alternative.
Opponents of borrowing more to grow our way out of this mess are basically saying "$1T to get Saddam, $1T to bail out the banks, but not one more cent for our own recovery." That is an irrational, political and ultimately defeatist attitude.
We are the only country that prints more money when it's in a bind due to U.S. currency being the world standard. Keep printing and the value of the dollar will drop to the world's second or third preffered currency or worse. When that happens America, as we've all grown to know it, will change drastically. It will happen.
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