A few weeks ago we noted that, through its various “quantitative easing” programs, the Federal Reserve had become that largest contributor to President Obama’s reelection effort.
Between the two “quantitative easing” or QE1 and QE2 programs, Federal Reserve Chairman Ben Bernanke put something close to $2 trillion into Obama’s reelection effort by purchasing mortgage backed securities (MBS’s) and longer term Treasury securities.
Now with the June 20 announcement that the Fed is extending until December the “Operation Twist” program to swap $267 billion in short-term securities with longer-term debt, taxpayers are on the hook for another quarter of a trillion dollars.
Taxpayers have now made over two trillion dollars in forced contributions to what is, in essence, a Super PAC the Federal Reserve is operating to help reelect Barack Obama.
Americans who aren’t as committed to the wisdom of Adam Smith as we are might be forgiven for going along with these inflationary policies if they were actually working, but they aren’t.
And here’s the kicker – even the Fed doesn’t believe they will.
According to reporting by Bloomberg, Fed policy makers this week cut their expectations for growth in 2012 to a range of 1.9 percent to 2.4 percent, down from an April prediction of 2.4 percent to 2.9 percent. The forecasts have been lowered in five of the six economic projections since January 2011, when most central bankers predicted the economy would grow 3.5 percent to 4.4 percent in 2012.
As Bloomberg noted, the latest estimate is in line with those of private forecasters, who project 2012 growth of 2.2 percent, according to a survey they conducted. The Fed’s Open Market Committee has cut its projections for 2013 six times since January 2011.
Continuing policies that aren’t working and aren’t even projected to work by those who propose them is the height of cynicism. Obama and Bernanke have had almost four years to prove that inflation, spending, deficits and debt are the paths to prosperity; it is long past time for both of them to go.