By Steven K. Beckn er
SAN FRANCISCO (MNI) – Don’t look to the Federal Reserve to save the
U.S. economy from fiscal “misfeasance,” Dallas Federal Reserve Bank
President Richard Fisher said Thursday.
Fisher, who is not a voting member of the Fed’s policymaking
Federal Open Market Committee this year, said “our Congress — past and
present — has behaved disgracefully in discharging its fiscal duty.”
“The jig is up,” he said. “Our fiscal authorities have mortgaged
the material assets of our grandchildren to the nth degree. We are at
risk of losing our political heritage of reaching across the aisle to
work for the common good.”
“In the minds of many, our government’s fiscal misfeasance
threatens the world’s respect for America as the beacon of democracy,”
he added.
But the monetary policy is not the answer, he said.
“Only the Congress of the United States can now save us from fiscal
perdition,” said Fisher. “The Federal Reserve cannot.”
Fisher said “the Federal Reserve has been carrying the ball for the
fiscal authorities by holding down interest rates in an attempt to stoke
the recovery while the fiscal authorities wrestle themselves off the
mat.”
But he said “there are limits to what a monetary authority can do.
For the central bank also plays a fiduciary role for the American people
and, given our franchise as the globe’s premier reserve currency, the
world.”
“We dare not become the central bank counterpart to Congress by
adopting a Buzz Lightyear approach of ‘To infinity and beyond!’ by
endlessly purchasing U.S. Treasuries and agency debt so as to encumber
future generations of central bankers with Hobson’s choices when it
comes to undoing what seems contemporarily appropriate,” Fisher said.
** MNI **
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