Two topics this week, starting with stuff related to our discussion last night of the Federal Reserve and financial sector reform. Also, more on health care.
The Fed and Financial Reform
As the economy recovers in the next few years, the Fed will have to decide how fast to reverse its huge monetary stimulus of the last two years so that it doesn’t end up causing a lot of inflation. Reverse course too soon and they’ll choke off recovery; wait too long and inflation might come back. The people I read say the biggest worry is that the Fed will act too soon. The NYT just reported that the Fed is about to start tightening up, even though the recovery is still fragile.
Also, a lot of people are worried that now is too soon to start obsessing over reducing the budget deficit. That’s a long-term problem that needs a long term fix, not a sudden panic to slash entitlement programs. Ain’t it funny how fear-mongering over the deficit always seems to crest when Democrats are in power and want to expand social programs, not when Republicans are in control and want to blow holes in the deficit by slashing taxes and increasing defense spending. (And, no, it’s not because Democrats cause bigger deficits. Since 1980, it’s been Republicans that balloon the national debt and their Democratic successors that have had to clean up the mess.)
I promised to link to somethngi that explains the Obama/Democrat plans to reregulate the financial sector. Still looking. But, a suggestion: “Off with Their Heads.”
Republican ideas have not been ignored. One expert actually looked at the GOP “Solutions for America” website and found all six ideas in the bills, including tort reform, selling insurance across state lines, and risk pools. Democrats inserted these months ago to try to get a single GOP vote. And, this was before they killed the public option AND Medicare expansion. They got squat and they never will.