Note: This article was written before the October 3, 2012 Presidential debate in Denver, but my belief that it will remain unasked in the next two debates persists, and the subject, still relevant.
This is only one of the questions (I’m fudging…it’s two) I, as a voter would like to have answered in either tonight’s or the other two Presidential debates. If I were a wagering person, I’d place a significant bet on the fact that it will NOT be asked.
So…if I were the moderator…
“A two part question.
On September 13, Federal Reserve Chairman Ben Bernanke announced a new round of open-ended “policy accommodation”, which is commonly referred to as “quantitative easing”. The September 13 announcement marks the third round, referred to as “QE3”, which the Federal Reserve explains is aimed at helping “to support the economy”.
There are a lot of people, including a number of economists, voicing concerns about these rounds of “quantitative easing”. There even appears to be some dissent within the Federal Reserve system itself, including a statement of dissent from Richmond Fed President Richard Lacker on September 15. People are concerned about the more than tripling of the Adjusted Monetary Base since 2008, which is unprecedented. Specifically, critics are concerned about a high risk for inflation, some fear runaway inflation.
Question 1. Should the American people be concerned about that tripling of the Adjusted Monetary Base?
Question 2. If economic recovery is one of the stated reasons for this policy, including encouraging banks to lend more money, which reportedly has not increased since credit markets froze four years ago, then why is the Federal Reserve paying the banks interest on the historically high levels of bank reserves they continue to hold?
President Obama, although the Federal Reserve began engaging in these policies before you were inaugurated, most of them occurred at the end of 2008 and have increased since, so there is some presumption you agree with these policies. Obviously, the second question will be slightly different when it is Governor Romney’s turn to answer in that he will have to answer based on whether or not he agrees with that policy, what he might do differently, and why.
President Obama, we’ll turn to your answer first…”
A couple of visuals I’d put up on a screen at the debate to facilitate the discussion…
VELOCITY OF MONEY = Number of times a dollar turns over in the economy
National Debt not specifically relevant, but interesting, no?…
I’d give these guys FIVE minutes to answer at least…and that wouldn’t be close to enough.
So, what are YOUR thoughts on these two questions?
What OTHER questions do you think SHOULD be asked but won’t be?
Be sure to use the comment box, below.