I think we're going to need a bigger printing press:
Federal Reserve Chairman Ben Bernanke is defending the Fed's decision to borrow $600 billion to help stimulate the struggling economy, saying it's possible the Fed might spend even more.
In an interview aired Sunday on CBS-TV's "60 Minutes," Bernanke rejected criticism, some it coming from Republican congressional leaders, that the $600 billion second round of "quantitative easing" or QE2, risked triggering inflation.
"Is keeping inflation in check less of a priority for the Federal Reserve now?" asked reporter Scott Pelley.
"No, absolutely not," said Bernanke "What we're trying to do is achieve a balance. We've been very, very clear that we will not allow inflation to rise above 2 percent."
In the weeks before Election Day, the Republican leaders of the House and Senate directly challenged Bernanke's QE2 move, the first time in decades that top political leaders have so pointedly opposed the Fed's monetary policy decisions. Bernanke did not comment on the Republican criticism, but he said it was crucial for the Fed to ignore political pressure.
"Well, the Fed's independence is critical. The central bank needs to be able to make policy without short-term political concerns. In order to do what's best for the economy. We do all of our analysis; we do all of our policy decisions based on what we think the economy needs. Not based on when the election is or what political conditions are."
And if inflation goes above 2%? No worries! The Fed will simply jack up interest rates, thus adding to the interest we have to pay on our debt and exacerbating the deficit crisis, not to mention slowing economic growth even more than it is today.
But don't worry. Everything is under control. Our economy is being steered by a wizard who can command into being hundreds of billions of dollars simply by waving his magic pen.
What could go wrong?