Thomas Hoenig on the Potential Diaster of Excessive Gov't Spending
Thomas Hoenig is the President of the Kansas City Fed. He has been very vocal about the need to break up the large banks and to balance the budget. If I had my way, we'd oust that worthless slime, Timothy Geithner, from the Treasury and replace him with Hoenig.
Hoenig wrote an article that appeared today in the NY Post on the US debt problem:
"The Feds on Course of Doom"
[I would've pasted the whole article, but TMF might've simply taken it down.]
Hoenig is absolutely right and I'd much rather have him manning the Treasury Dept than Geithner. We're going to have to have more people pressuring the government to balance the budget to get it done, because the politicians from both parties never want to cut spending. We need to start cutting military spending. We need to find a way to reform Medicare/Medicaid payments. And most importantly, we need to phase out Social Security, which was always a terribly designed program and will drain the lifeblood out of this country if we don't eliminate it.
While we're on the subject of the Fed, however, this goes back to why the Federal Reserve Bank is such a valuable entity to us. Conspiracy theorists on this site will have you believe that it's the cause of all evil. In reality, the Federal Reserve is about the only roadblock to hyperinflation. The Fed's mission is to maintain price stability, keep inflation in check, and maximize economic potential. It is manned by a handful of very respected economists.
Congress, on the other hand, has no mission except the ambitions of its individual members, which normally means pleasing lobbyists, getting as much money for their own districts as possible, and occasionally handing out tax breaks. If there's any body in our country more worthless than Congress, than I'm not sure what it is.
If we did as the central bank haters wished and "abolished the Fed", the end result would be that Congress would have complete control of our monetary policy. That's right --- Congress --- the entity most responsible for creating the current mess and for racking up a national debt of over $12 trillion!!! If you want a recipe for hyperinflation, then by all means, abolish the Fed. The Fed is the only roadblock to hyperinflation, because their agenda (price stability) is directly at odds with that of Congress (spend, spend, spend).