The View From 1776
Sunday, December 15, 2013
The Road Ahead
The Federal Reserve’s unprecedented loose-money policy, based on Keynesian, socialistic economic theory, failed to jump-start the economy by inflating asset values in the stock and bond markets.
Indeed, so far as I know, Keynesian loose-money policy has never worked as expected anywhere, at any time. Any activation of Keynes’s “animal spirits” translating into business revival has always petered out, or has led to destructive price inflation, rising public and private indebtedness, and gross misallocation of investment.
Because the Fed’s Keynesian policy has not worked, the Fed and Congress are now faced with very unpleasant alternatives.