My friend, Alex Pollock, Senior Fellow of the Mises Institute, published a disturbing but important article in the New York Sun on Friday. It shows graphically how destructive our fiscal and monetary policies have been over the past two decades. These policies began with massive deficit spending by Congress, approved by the last four Presidents. The Federal Reserve (which is expected to maintain a stable currency) has supported these fiscal policies by printing excessive amounts of dollars and going heavily into debt to purchase and hold very large amounts mortgages and bonds to artificially support the markets. This cannot continue. Congress and the Administration need to begin immediately to start reducing an unsustainable Federal deficit, primarily by reducing Federal spending and increasing Federal revenues by all means available.
We have been here before (1965 through to 1992) and we were able to turn things around through incredible efforts by Presidents Carter, Reagan, Bush and Clinton and strong leadership from Federal Reserve Chairman Paul Volcker, House leader Newt Gingrich, and many others. We can and must get ourselves turned around again with strong bi-partisan or, better yet, non-partisan leadership.
Read Alex Pollock’s article here.