Ben Bernanke says that the economy needs more expansionary policies by other branches of the government to boost employment and production. He does not say that the economy is right-side up as far as aggregate demand is concerned. He does not say that he will respond to any expansionary fiscal policy moves by offsetting them with more contractionary monetary policy:
Ben Bernanke:
Bernanke news conference on Fed policy: With respect to the current economy we are currently continuing our accommodative monetary policy. We are trying to do our best to support economic growth and job creation. It would be helpful if we could get assistance from some other parts of the government to work with us to help create more jobs. But certainly we are doing our part to create more jobs, more opportunities in America…
If Ponnuru has any reason to believe that Bernanke is lying, I would like to see the evidence. If not, he should not claim that Federal Reserve policy is different from what Bernanke says it is.
My interpretation: playing for Team Republican simply rots your brain, and leaves you with no ability to think coherently at all.
That would be funny if Obama got some fiscal stimulus through and the FOMC statement from the following meeting read "Psyche! The committee decided to move to restrictive policy measures in light of the inflationary policies pursued by other branches of government. We understand we asked for help but didn't think they would go through with it."
If MMTers are right and the Fed can't do anything else they should say so, because that would put more pressure on Congress to do something.
Also contingency plans should be made in case the economy suffers a shock and the economy double-dips with the Fed out of bullets. The should be debated out in the open.
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