Tuesday, January 13, 2009

Bernanke Hearts Stimulus

From Yahoo's Finance section comes the headline, Bernanke: Obama Stimulus Would Lift Economy.

If the "stimulus" program were financed by sale of equity rather than debt or money-printing, why do I doubt that Gentle Ben would be so positive on matters? Under the Obama scheme, Dr. Bernanke's power increases. If the Government financed this scheme by selling shares in a fictional "USGov Inc." or by sale of publicly-owned lands, or by direct first-lien claims on future tax receipts, then this "stimulus" would actually be funded and would not need the tender ministrations of the Fed. At some point if this unthinkably rational change of financing occurred, the Fed might actually have to admit that it has the time to monitor banks so that they are in fact safe and sound, so that the FDIC does not have to spend uncountable billions rescuing depositors of failed institutions.

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