The View From 1776
Friday, August 05, 2011
Reacting From The Wrong Premise
Public opinion polls show that Congress - both parties - is held in the lowest regard on record. The public blast Congress for “doing nothing” to revive our miserable economy and for wrangling over many weeks about the debt-ceiling increase.
In this, the public are reacting from the false premise that Congress can, and should, control the economy and put the nation back onto the path toward prosperity.
Nothing in the Constitution confers such power on Congress. And, in the real world, dong so is entirely beyond the power or abilities of any Congress. Nor is it within the power of the executive branch or Federal agencies such as the Federal Reserve System.
Federal intervention can only harm the economy’s performance by distorting demand for products and services that hundreds of millions of individuals would choose in a free market. The best that can be hoped for is that Congress or the president do as little harm as possible.