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A $600 Billion Failure

The opinions expressed by columnists are their own and do not necessarily represent the views of

Last November, the Federal Reserve Bank announced that it was ramping up the printing presses one more time in an effort to "stimulate" the economy.  

The plan was called Quantitative Easing-2, QE2 – a high-falutin name that suggested most of us commoners couldn't possibly understand it, nor should we even ask questions.  

QE2 was the $600 billion sequel to the first big run that the Fed had taken at jolting the economy back to life.  When added to QE1, $2.3 trillion was pumped into the economy; a completely unprecedented effort.  

The flood of newly printed cash from QE2 was supposed to stem fears of deflation, keep interest rates low, and give a shot in the arm to the stocks and bonds market.  

Job growth, the fed said would follow.  

The QE2 spending spree ended in June much as did the first effort at "monetary easing" with nearly nothing to show for the trillions spent other that a bunch of befuddled big shots in Washington.  

Even Fed Chairman Ben Bernanke admits he can't explain why nothing seems to work.  Like unapologetic addicts some so-called economic experts are calling for a QE3. 

The editors at the Wall Street Journal offered the following succinct summation of the Fed's quantitative easing efforts: 

"They succeeded in putting deflation worries to rest. But economic growth is slower now than it was when the program was enacted, the job market has sputtered after a spurt, and the financial-market impact has been a mix of good and bad. Stock prices are higher and corporate-bond yields lower, which helped growth. But prices for oil, grains, and other commodities have surged, pinching consumers…In all, the economy looks to have grown at a 2% annual rate in the first half of the year, the slowest six-month stretch of the recovery." 

Government has an obsession to "do something" whenever a problem arises.  

But, as Ronald Reagan was fond of saying, when government intervenes they usually "fix it until it's broken."  

Whether it's the politicians on Capitol Hill, in the White House, or the bankers at the Fed, it's time they accept that what they've been doing didn't work.  

You simply can't borrow and spend yourself wealthy, and it doesn't work for nations and governments either.  

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