Letter: Ending quantitative easing is a bad idea

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To the editor: 

Stock prices plunge as Ben Bernanke, chairman of the Federal Reserve, hints at phasing out quantitative easing, the process of buying bonds to the tune of $85 billion per month, thus adding purchasing power to our still-struggling economy.

Investors know very well what works.  Obviously, those on the political right demanding that the Fed stop in effect printing so much money either are economically obtuse or would like nothing better than to see our economy tank and President Obama’s presidency with it, not to mention a landslide victory for Republicans in the next congressional election.

Quantitative easing is vital to combating the negative impact that sequestration has on our economy. 

Furloughs to government employees, cutbacks to government agencies and programs – mostly affecting our poorest citizens – reduces consumption and demand for products and services, forcing many businesses to cut back and lay off workers. Without quantitative easing we could have a severe economic slowdown.

So if the Fed does reduce or eliminate bond purchases, our leaders had better end sequestration too, increase government spending, or else the fears of investors would likely be realized.

Our president and congressional Democrats need to stop vacillating; they need to let the public know in no uncertain terms what is happening, what must be done to strengthen our economy, avoid a double-dip recession.

It’s all about purchasing power.  It’s all about creating decent-paying jobs.  If the private sector is not up to the task, the public sector must take over.

Lawrence Uniglicht

Galloway

 

 


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