- Obama military strategy too weak for future security, panel reports
- Sen. Tom Coburn vows to slow down budget-busting bills ahead of recess
- Obama fantasizes about more executive power, signs new order on federal contractors
- Clintons call Klein, Halper, Kessler ‘a Hat Trick of despicable actors’: report
- Boehner accuses Obama of ‘legacy of lawlessness’
- Pro-marijuana group claims responsibility for Brooklyn Bridge flag swap
- Young adults shun Obamacare mostly due to cost: survey
- Stabbing attack on transgender girl, 15, was ‘bias motivated,’ police say
- LGBT adults still lean overwhelmingly toward Democratic Party
- Lawmakers rattled by Syria genocide horrors, call on Obama to act
LETTER TO THE EDITOR: Dangers of Fed’s low-interest-rate policy
Question of the Day
In addition to diluting the value of the dollar, the Federal Reserve’s policy of keeping interest rates at historic lows means capital that otherwise would generate a decent, safe return of around 5 percent from Treasuries or bank certificates of deposit is incentivized to flow to riskier investments, such as the stock market. Thus we are artificially increasing demand and driving equity prices up even further.
This irresponsible policy suppresses the wholesome discipline of the market, penalizes retirees who have historically relied on income from Treasuries to supplement their pension and Social Security income, drives them to seek riskier alternatives or to draw down their 401(k)s, gives private investors in the market a false sense of wealth, overstates the funded level of defined benefit pensions, and obscures the ultimate cost of servicing the $16.5 trillion national debt.
When this bubble created by Fed policy bursts, it could well result in our calling the great recession of 2008-09 “the good old days.” Alternatively, the air might slowly be let out of the balloon and we’ll experience 20 years of economic retreat, just like Japan. Either way, the U.S. economic future looks so bleak that the next president will have even more blame to heap on President Obama than Mr. Obama had to heap on his.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
TWT Video Picks
By Mackubin Thomas Owens
Americans suffer from damage to the fossil-fuel-dependent U.S. economy
Get Breaking Alerts
- Inside the Ring: Israel surprised by Hamas tunnel network
- Army's 3-D printed bombs to create 'a whole new universe' of lethal capabilities
- Chicken pox outbreak puts illegal immigrant facility on lockdown
- GOP leaders delay border bill, leave Obama in control
- Report: 40% of weapons sent to Afghanistan are unaccounted for
- CRUZ: A tale of two hospitals: One in Israel, one in Gaza
- Bill Clinton audio surfaces from Sept. 10, 2001: 'I could have killed' Osama bin Laden
- CIA admits improperly hacking Senate computers in search of Bush-era information
- Israel surprised by Hamas tunnel network
- Colorado poll shows women tuning out Democrats' 'war on women' strategy